Redoubling Business Actors Participation In the Global Supply Chain
Description
The share of exports from developing countries contributes to 41,6% in global trade. Despite the growing portion, it is still dominated by several higher-income countries. The variety of exports from developing countries remains low. This lack of diversification is further evidenced by data from the WTO. In 2021, developing countries on average exported only 461 different products compared to 1467 for developed countries. Additionally, the Export Concentration Index (higher values indicate concentration) shows developing economies (0.1) and LDCs (0.19) are more reliant on a few key exports compared to developed economies (0.06). Compounding this, WTO data indicates lower and middle-income countries (mostly developing) have fewer companies (average of 22,884 and 17,085) compared to high-income countries (mostly developed) with an average of 26,955 companies.
Due to the high concentration of products and companies, development in developing countries remains uneven. Hence, there is an urgent need to break the cycle of dependency on primary commodities and foster inclusive growth, and governments must create an enabling environment to foster the emergence of new types of products or industries in alignment with the country's resources and competitive advantages.
Business actors, particularly Micro, Small, and Medium Enterprises (MSMEs), continue to encounter challenges in meeting export standards and certifications. The complex administrative and bureaucratic systems also pose constraints on expanding the number of export-oriented businesses. Initiatives such as business incubators or accelerators have been introduced in several countries to develop seed programs and startups. Furthermore, e-commerce has contributed to broader participation by business actors.
To fully optimize the potential and participation of diverse business actors, comprehensive support is required from all stakeholders, including funding, legal frameworks, as well as mentorship and consultations.
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