LAUSR

The purpose of our research is to identify key factors and government policies supporting small and medium enterprises’ (SMEs) successful integration into global value chains (GVCs). Our main research questions are: How are economies involved in GVCs and does integration depend on the size of a country? What role do governments play in fostering upgrading the position in order to best derive benefits from GVCs? How is Slovenia seizing the opportunities of GVC integration? Our research shows increased engagement by all the selected countries in international production linkages in the period from 1995 to 2011, with participation index correlated with the size of a country (small economies being more integrated). A key finding is that a ‘whole of the chain’ approach is needed, and governments should implement policies and targeted support programmes linked to innovation, knowledge-based assets, etc. in order to best respond to the reality of more interconnected economies and draw the greatest benefits from engagement in gvcs. A case study of Slovenia shows the economy has been rapidly integrating into gvcs; however, we submit recommendations to policymakers on the subject of policies as a means to further promote the integration of smes and upgrade into gvcs.