Participating and Upgrading in Global Value Chains: The Case of Small and Medium Enterprises in Vietnam

Abstract

This chapter defines small and medium-sized enterprises and global value chains in a Vietnamese context. It provides some historical perspectives and outlines its position and performance in this area relative to other Southeast Asian countries. The critical factors for participating and upgrading of small and medium-sized enterprises in global value chains are addressed, outlining the role of lead firms, small and medium-sized enterprises competitive advantages and institutional factors. There is a discussion on challenges for Vietnamese participation and upgrading in global value chains and also this includes an account of a medium size group missing in small and medium enterprises, corporate governance, innovation capability, the macroeconomic environment, access to formal credit, and logistics infrastructure. The chapter concludes with outlining some of the obstacles faced and recommendations for government in developing absorptive capacity, assimilating and exploiting the knowledge and information from lead firms, comments on national logistics capacities, and future sustainable development.