Globalization and the Small Firm: A Value Chain Approach to Economic Growth and Poverty Reduction

This microREPORT explores how micro and small enterprises (MSEs) and the industries they dominate can compete in globalized markets. The paper argues that linking the poor to growth opportunities is crucial to generating sustainable economic growth with poverty reduction. In light of intensified global competitive pressures, efforts must focus on the performance of the whole industry in which small firms participate. This paper translates recent research into practical approaches for designing interventions that foster economic growth to reduce poverty. The paper starts with the conceptual and moves toward the project cycle, offering practical guidance to the project designer in selecting industries for intervention, analyzing selected industries, developing a vision for competitiveness, and designing project interventions.