Project Title

SMEs' Integration into Global Value Chains in Services Industries: Software Services 

Project Year

2017   

Project Number

CTI 22 2017A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

CTI 22 2017A 

Project Title

SMEs' Integration into Global Value Chains in Services Industries: Software Services 

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: Free Trade Area of the Asia-Pacific and Global Value Chains (FTAAP and GVCs) 

Project Year

2017 

Project Session

Session 2 

APEC Funding

88,500 

Co-funding Amount

41,500 

Total Project Value

130,000 

Sponsoring Forum

Committee on Trade and Investment (CTI) 

Topics

Trade Facilitation 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Korea 

Co-Sponsoring Economies

Hong Kong, China; Peru; Viet Nam 

Expected Start Date

01/12/2017 

Expected Completion Date

31/12/2018 

Project Proponent Name 1

Yang Ghiwuk 

Job Title 1

Director, Multilateral Trade Cooperation Division 

Organization 1

Ministry of Trade, Industry and Energy 

Postal Address 1

610, 16-1 402 Hannuri-daero, Sejong-si, Korea 339-012 

Telephone 1

82-44 2035643 

Fax 1

Not Applicable 

Email 1

mtrade@korea.kr; junglim@motie.go.kr 

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Yang Ghiwuk 

Project Summary

In 2016, APEC agreed on a new initiative to assist SMEs to benefit from GVCs - SMEs’ Integration into Global Value Chains in Services Industries, as a key initiative for MSME Internationalization. This project seeks to implement the initiative with particular focus on promoting SMEs’ integration into GVC in software service industry. 

Activities include to:

1) conduct research and analysis on software service GVCs software service GVCs and SMEs software GVCs participation status;

2) identify the opportunities and challenges for SMEs’ integrationshare best practices through case studies and present policy recommendations to address the challenges and support SMEs’ GVCs participation; and

3) hold a workshop to help policy makers’ understanding of software service GVCs, to share best practices, and to understand the challenges that SMEs are facing in software services sector. 

By disseminating best practices and policy recommendations, this project seeks to contribute to benefiting business and public sector in the region. The study outcomes and GVC workshop can be used by both SMEs and MNCs as useful resources to enhance their competitiveness and expand business opportunities in the fast growing software services GVCs focused on smart factory cases.

Relevance

In 2014, APEC Leaders recognized that “Global Value Chains have become a dominant feature of the global economy and offer new prospects for growth, competitiveness and job creation for APEC economies at all levels of development”. In that sense, Leaders endorsed the APEC Strategic Blueprint for Promoting Global Value Chain Development and Cooperation. Under the Blueprint, APEC economies developed a multi-year initiative (2015-2016) on Promoting SMEs’ Integration into GVCs in Major Industries, to facilitate SMEs’ integration into GVCs within five manufacturing industries. In 2015, APEC Ministers welcomed the outcomes achieved and instructed officials to continue works to develop practical initiatives that will integrate SMEs in GVCs.

On the other hand, within the context of GVCs, the importance of services has been highlighted to be an ‘enabler of GVC’ as the entire value chain of manufacturing industry is developed and operated around a wide range of service industries. Some services also play a crucial role in the transformation of international trade and investment patterns by creating their own value chain.

In this context, Korea proposes, as agreed by the CTI in 2016, a new initiative which aims to complement economies’ efforts by directly focusing on GVCs in software service industry. The development of GVCs in software services will lead to new competitive opportunities for SMEs and developing economies to specialize and thus better participate in GVCs, particularly in a way to better adjust and maximize the impact of the so-called new industrial revolution.   

Under the APEC Funding Criteria 2017, This project directly relates to several Rank 1 criteria as following:

-  Strengthening innovation and competitiveness and insertion of MSMEs in GVCs: the project seeks to support this MSMEs by supporting their capability with software services;

-  The implementation of APEC Services Competitiveness Roadmap (ASCR): the ASCR included this project as one of the key APEC-wide actions to implement the roadmap; and

-  Activities outlined in the Global Value Chains Blueprint : the project was endorsed in the CTI as the key initiative for the committee’s continued work on GVC Blueprint.

Objectives

1) Facilitate better understanding of how GVCs in software services is structured and where the opportunities and challenges are for SMEs’ participation including smart factory cases;

2) Provide APEC Ministers and Leaders with a set of policy recommendations on how to promote SMEs’ integration in software services GVCs addressing challenges and achieving sustainable growth and trade in the industry;

3) Help SMEs build capacity and develop strategy for effective integration into GVCs of the software services industry;

4)  Identify business opportunities and difficulties for SMEs in the software services industry and help policy makers to reflect the difficulties.

Alignment

This project is in line with the instructions of APEC Economic Leaders of 2016. They encouraged officials to implement further efforts to enable better participation, greater value added and upward mobility of developing economies and MSMEs in GVCs. In accordance, this project will help understand and share the best practices on SMEs’ integration into GVCs in software industry and provide decision-makers with a set of policy recommendations to effectively integrate SMEs into GVCs in software industry in the Asia Pacific. These works will be conducted by holding a workshop to share the best practices, and views on the opportunities and challenges for SMEs’ integration into GVCs in software services industries.  Furthermore, in 2016, APEC Ministers supported the initiative on SMEs’ Integration into Global Value Chains in Services Industries and they welcomed the sectors selected, including software industry.

This project also addresses the 2016 APEC Ministerial Declaration where Ministers endorsed the APEC Services Competitiveness Roadmap 2016-2025, recognizing services as a growing and dynamic component of GVCs. Besides, this project consistently contributes with the current work of CTI on GVC Cooperation and Development on Services, considering that facilitating MSMEs services trade is among CTI’s key priorities for 2017. 

This proposal will furthermore provide a framework for relevant sub-fora to contribute to the CTI priorities, since it will be developed in close collaboration with the SMEWG and GOS, as well as pursuing the involvement of ABAC. 

Aligned with APEC’s primary goals, the project will provide for a platform for open information flow among SMEs, SMEs associations, policy makers and for discussions on various issues and challenges that software MSMEs might encounter in the process of accessing GVCs.

TILF/ASF Justification

In alignment with the APEC Strategic Plan on Capacity Building to Promote Trade and Investment, the project will share best practices among APEC economies and other related agencies, to effectively build capacity and contribute to APEC’s core trade and investment agenda. By drawing the best practice cases related to SMEs integration, and its subsequent benefit, into GVCs from diverse backgrounds of the software industry, the project seeks to support the capacity building needs of APEC developing economies as well. 

By sharing best practices and knowledge about SMEs’ entering GVCs in developed economies, APEC developing economies will meet their capacity building needs by improving the process of integration to GVCs to ultimately achieve their economic growth goals. In addition, this project will support the development of human capital and/or entrepreneurial capacity among MSMEs in developing APEC economies. This project will help SMEs in developing economies to learn about successful cases related to smart factory and to strengthen their capacity to participate in the software industry GVCs.

Beneficiaries and Outputs

Outputs: First, main output will be a report on cases studies where SMEs in the software industry of some APEC member economies have successfully participated in GVCs and policy recommendations to support SMEs’ integration into software GVCs. For example, we can study the case of smart factory which is a representative example of manufacture-related services creating high added value within the GVCs by advancing the existing manufacturing industry by applying information and communication technology(ICT) and embeded software to the entire production process such as design, development, manufacturing, distribution and logistics. In this regard, software services are one of the key part in various industries including manufacturing and sometimes they create a pure services GVCs. Case studies will be conducted by experts from KIEP (Korea Institute for International Economic Policy) and software related institutes targeting at least 3 economies. Topics will be including not limited to the success stories of SME’s GVC participation, government polices. Of course, this report will include the understanding software services GVCs and current status of SMEs’ participation in GVCs in software industries. The report will also include the policy recommendations to support SMEs’ integration into GVCs in software services sector.

Second, there will be a workshop with government, ABAC, industry, and software experts to share best practices or successful stories and introduce related government polices. They identify the opportunities and challenges for SMEs’ integration. Based on this, participants  will give some recommendations. These will be basis of policy recommendations which will be included in the report. The Workshop Summary Report will be also included in the Final Project Report.

The survey of economies participated will be conducted to monitor the process of this project. The survey will have some questionnaires including how helpful, effective and which should be improved. After the workshop, we will do the survey.

Outcomes: Publication of report and one of the main part will be  case studies and policy recommendations as an output. Draft report will be written by KIEP(Korea Institute for International Economic Policy) in cooperation with software experts. Case studies will include at least 3 economies’ cases including but not limited to Singapore, Chinese Taipei. This will be done through one of our contract with KIEP. It will also help business entrepreneurs and policy-advisors understand business opportunities and difficulties for MSMEs’ GVC participation as the involvement of software services in GVCs increases. Policy makers will reflect the challenges and the recommendations on their software services policies.

Workshop in the progress of the project are expected to provide policy-makers of APEC members a chance to explore a set of policy options that can improve MSME’s capacity and competitiveness to effectively integrate into GVCs through software services and to identify the opportunities and challenges for SMEs’ integration into software GVCs.

Beneficiaries:

Direct beneficiaries: Direct beneficiaries of this project consist of important GVC stakeholders: 

a)  Public Sector (Government bodies and agencies): On the public side, policy makers who is responsible for SME policies or software industries policies will be able to formulate reasonable policies to satisfy SMEs interests and take into account the women’s factor. The project benefits directly policy makers, tourism and destination administrations and different authorities directly responsible for the development and implementation of software.

b) SMEs/MSMEs and related associations: Stakeholders in the services sector will have a better understanding of GVCs in the software industry, as well as MSMEs. SMEs either current or potential players in GVCs who are experiencing difficulties in their integration into GVCs, will be direct beneficiaries of the improved regulations and practices resulting from this project. The report as a main output will also include some analysis on women’s role in the creation and development of MSMEs and formulate recommendations that are inclusive of their particular conditions. 

Long-term beneficiaries: In the long-term, the extended beneficiaries will include Multinational Corporations (MNCs), Developing Economies, and other sectors. 

a)  MNCs: Even though the project is focused on SMEs participation in GVCs, as SMEs improve their role in software GVCs and MNCs will follow accordingly to become a beneficiary in the economic growth of developing GVCs. 

b)  Developing Economies: The developing economies are a part of direct beneficiaries in terms of capacity building on their Government bodies and agencies. Still, the economic growth resulting of the increased trade in services GVCs in the long-term will benefit APEC developing economies in the ways of job creation, GDP growth, etc.

c) Academia (academic institutions, public and/or private research institutions): Researchers and professors on related subjects will have a better perception on the concept of software GVCs and SMEs participation for further research and studies. The results of the project will contribute to the research of related international organizations (UNWTO, OECD, WTTC, WEF, ITC, WTO, etc.) 

d) Other Sectors: Other sectors that are conducting a project on SME integration into services GVCs, including fashion industry, software, logistics and distribution, will also benefit in the long-term from shared applicable case studies and policy recommendations of this project.

Dissemination

The Project lead will make available the report through the APEC official website and the results will be disseminated electronically to CTI and relevant sub-fora, particularly the SMEWG, GOS as well as pursuing involvement of ABAC for further collaboration. The project results will be accessible to all APEC economies as well as the target audience of this research, which will include SME policy development officials, management and decision makers of SMEs, industry associations, academic researchers in APEC economies and international organizations, through the APEC Publications website.

The final output of the project will be compiled with other lead services sectors(including fashion, logistics, tourism) research and will be made available for MRT and relevant APEC Ministerial Meetings. 

Korea will work towards sharing such information with industry associations like software associations and other international organizations such as OECD. Additionally, Korea will provide a summary of the project progress and results to CTI and SOM meetings as well as relevant sub-for a meetings (SMEWG, GOS etc.)

There are no intentions to sell the outputs from this project.

Gender

The project case studies will analyse if there are significant gender disparities to access SMEs and MSMEs in the software sector’s GVCs. Women as well, will be included in the development of the project recommendations and will be consulted during the study on their particular circumstances. Other APEC developing economies will be encouraged to constantly consider gender equality throughout the selection of their case studies for this project as well.

Also, one of the workshop session will be invited female expert speaker to address women’s issues or from women’s perspective.

The research process will also collect and use sex-disaggregated data to analyse the impact of the project on women. Overall, the project leads will also assure there are not gender differences in at all levels of this project from planning and development, through to implementation and dissemination of results.

Work Plan

Time

Activity

Implementation

Deliverable

Participants

December 2017 - January 2018

Launch the project and conduct internal discussions

Launch research on software service GVC and make more detailed work plan.

Because software services include far-reaching sectors, more specific sector will be selected like smart factories. 

Hold internal meetings with experts.

Detailed work plan

Secretariat, PO, experts including KIEP, software experts, and project executives.

February

2018

Prepare the detailed work plan

Based on the results of the meetings with experts, prepare the specific work plan and circulate the work plan to co-sponsors for comments.

This work plan will include not limited to when will the workshop be held, how it happens, and who will be invited.

Nomination of participants and experts.

Also, site visit or meeting schedules which will be basis of the case studies be presented.

RPF

Contract

Secretariat, PO and project executives.

Economies are invited to nominee themselves as case studies. A maximum of 5 is expected, one of each geographic region if possible (Latin America, North America, Oceania, East Asia)

March-May

2018

Prepare for the workshop

Research work carried out by consultant

Circulate the draft agenda of the workshop with suggested speakers.

For drafting the case studies and identifying the status of APEC economies software industry GVCs, nominate economies to be included in case studies.

After nomination economies, conduct site visit or arrange the bilateral meetings, teleconference etc.

The preparation of the report will involve all APEC economies and will engage their respective SMEs, industry organizations, policy makers, research institutions and academia, for collection of data, case studies and other relevant information.

May

2018

Hold Workshop

On the occasion of the SOM3, hold a workshop with APEC economies, ABAC, industry and experts to identify opportunities and challenges for SMEs’ integration and share best practices.

Outcomes of the workshop to report MRT

Draft of the policy recommendations

August 2018

Round of comments on the draft report.

Circulate draft of the study and recommendations for comments after SOM3 to relevant working groups such as  SMEWG, GOS, and ABAC.

Comments and inputs from economies and relevant organizations to the report.

PO and project executives.

Representatives of APEC economies from relevant fora

September-October

2018

Present final draft report for  additional comments and, if possible, endorsement at SOM 3

Project leads will make sure to integrate different perspectives and comments from APEC members.

Final Draft the report for endorsement

PO and project executives.

APEC economies

Senior Officials

November 2018

Publication of study

Final Report

Publication of research paper and recommendations on the APEC website.

Present final report of the project to the APEC Secretariat.

Publication of the report.

Final Report of the Project

Secretariat, PO and project executives.

Risks

Risk

Risk Management

-  Lack of interest from the economies to participate in the survey or propose case studies for the research paper.

-  Duplication of work with other APEC sub-fora or international organizations

-  Progress tracking of the project

-  Consultant’s delay in providing deliverables

- Contact every economy to gain their support and effective reply.

- Integration of practical issues and case studies and review of the existing literature to avoid redundancy

- Convergence of various methodology and theories in research and analysis to add value to the existing works

- Request the consultant to the related APEC fora, APEC economies, and experts for the use of plans and production of reports to help measure and monitor project progress and close monitoring of the project time plan

- Monitoring of the Logical Framework Matrix of the project

- If the project can not be completed by 2018, we will identify the cause of the failure and endeavour to finalize it.

Monitoring and Evaluation

Indicators: To ensure comprehensive evaluation of the progress and achievement of the project, a set of indicators will be used as following:

Indicator

Target

Number of economies to participate in the case studies.

At least 3 economies

Report of case studies

At least 3 case studies

Means: survey, data collection and analysis, desk study, etc.

Number of economies to participate in workshop

At least 10 economies.

Number of best practices which will be shared and addressed.

At least 5 best practices including 3 case studies.

Gender Indicators: To reflect sufficient level of gender considerations, indicators such as the number/ratio of women-led case studies, the number of gender-specific issues covered with regard to women led SMEs will be used.

Gender indicators

Target

The number of women-led SMEs or MSMEs in case studies of APEC economies

At least 2

The number of gender-specific issues

At least 2

Linkages

This project utilizes the information and knowledge about SMEs integration into GVCs from several international organizations such as UNWTO, OECD, WTTC, UNCTAD, ITC, World Bank, WTO, among others, as well as academic publications. Through the implementation of this project, detailed information will be disseminated to these stakeholders to ensure their inputs during the progress presentations of the project in the framework of APEC meetings.

Intra-APEC stakeholders that have potential engagement include CTI, GOS, SMEWG, PSU and private partners in ABAC, which the project leads will reach to develop an in-depth research. In addition, all materials developed and published for the purposes of this program will be made available via the APEC document database.

The software sector includes far-reaching issues and has not been analysed yet under a global value chain approach in APEC related to 4th industrial revolution, thus this proposal does not duplicate previous work, but add meaningful values building on the outcomes of previous PSU and CTI research such as the project proposed by Korea in 2016: “Promoting SMEs’ Integration into Global Value Chains – Phase 2”. 

As one way of enhancing linkages to other APEC works, this project will put efforts to identify cross-sectoral obstacles that affect to SMEs’ integration into GVCs regardless of services sectors and develop policy recommendations to address such obstacles. Such outcomes can be reviewed and utilized afterward in GVC work streams of other services sectors like tourism, fashion design, etc.

Sustainability

The results of the tourism sector will be incorporated into the final synthesizing report of the CTI’s Initiative SMEs’ Integration into Global Value Chains in Services Industries”. The final comprehensive report will incorporate all the outputs from 4 GVC sectors (tourism, software, fashion industry and logistics and distribution). This step will focus on how to effectively integrate progresses made in those key services sectors’ GVCs. While addressing key problems in each of the sectors GVC, this phase will also focus on cross-cutting issues to develop actionable policy recommendations with general applicability, and it also sum up different types of cases with diverse backgrounds that will benefit all the APEC economies including developing economies. Policy-makers can share the best practices and understand the software GVCs and SMEs’ difficulties so, they can reflect the policy recommendations to their policy making process. Beneficiaries can find out the final report including policy recommendations through APEC website and use when they make decisions relating to this project.

CTI and GOS and SMEWG’s agenda of work will act as a sustainable platform for continuous discussions and knowledge sharing in the boundary of tourism GVCs and SMEs’ participation in it. 

Measurement of progress for short-term outcomes and impacts will be taken care of during the project evaluation process, including criteria such as GVC awareness, SMEs-GVCs related policy implications, etc. These results will be measured through survey circulated during the project. For medium and long-term outcomes and impacts, statistics from national-level statistics agencies will be gathered to measure outcomes such as increase in a percentage of SMEs participating in GVC. 

In addition, the project results will be made available electronically at APEC publication page which may be used as a reference to possible options and approaches in addressing areas or gaps that may still be carried out by other economies to improve the needs of tourism MSMEs’ participation in GVCs.

Project Overseers

Mr. Ghiwuk Yang(Mr.)
Title: Director of Multilateral Trade Cooperation Division
Organization: Ministry of Trade, Industry and Energy of Korea

Mr. Ghiwuk Yang will manage the project. He worked in the Korean mission to the WTO for 3 years and has dealt with far-reaching trade issues including MSMEs. He is current Director of Multilateral Trade Cooperation Division and responsible for APEC Trade issues, WTO service sector, G20 Trade issues, and OECD trade issues etc. 

Project Executives: The management of the project will be supported by work of 1 executive and research center (tbd):

Ms Junglim Noh – Deputy Director of Multilateral Trade Cooperation Division
Ministry of Trade, Industry and Energy of Korea
Email: junglim@motie.go.kr, mtrade@korea.kr

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Research assistants’ scope of work is as follows:

- To assist with review and evaluation of comments and inputs made by economies in liaison with the consultant;

- Be involved in all phases of research in coordination with the consultant;

- Responsible for coordinating presentations of draft research paper at APEC meetings; and

-  Participate in and organize all Seminars/Workshops.

Waivers

Not Applicable.

Are there any supporting document attached?

No 
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Version HistoryVersion History

Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

Approval Status
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