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2.  Global Value Chains(GVCs) of Multi National Companies
 Overcoming Issues
 International Trade

3.  “Perfect globalization” would mean “perfect and free
movement” of input factors (that is, land, labor,
capital/investment, technology and entrepreneurship) and
output (that is, trade) between countries.
 Technological advancements due to the onset of the ICT
revolution.

4.  A complex integration strategy is a globally spread value
chain of a MNC
 The overall rationale behind the adoption of a complex
integration strategy is enhancing efficiency through cost
reduction

5.  Global value chain (GVC) refer to the people, roles and
activities involved in the production of goods and services
and their supply, distribution, and post-sales activities when
those activities must be coordinated across geographies.
 This concept of a value chain has been used to analyze
international trade in global value chains.
 GVCs are network of production and trade across countries.

6.  GVCs are of various kinds and dimensions
 GVCs are dynamic in nature
 Due to better socio economic and digital infrastructure and
human development leads to upgradation of skills
 Another significant feature of GVCs is that each part of
them would indulge in trade with local firms in the
domestic market or regional markets.

7.  SMEs in India constituted 633.9 crore enterprises.
 11.1 crore people are employed in SMEs.
 SME is accounted for 45% of total industrial production of
the country.
 SMEs contributed to about 40% of total exports in 2017–18,
which went up further to 48.10% in 2018–19 .

8.  This lead to the question, are on small and medium scale
enterprise adequately integrated into the GVCs of MNCs
 Indian SMEs are very low ranking in the Global Innovation
Index
 Innovation does not occur in soils, and therefore SMEs
operating in silos are unlikely to be innovative.

9.  We define a regional cluster on a geographically proximate
group of interconnected companies, suppliers, service
providers and associated institutions in a particular field,
linked by externalities of various types.
 The Concept of the innovation system stresses that the flow of
technology and information is key to an innovative process.

10.  Bengaluru was considered one of the 46 “Global hubs of
technological innovation” in 2001.
 They interacted with research expertise to overcome
technical problems encountered in their day-to-day
operations.
 Almost 40% of the internationalized SMEs from Bengaluru
could initially enter the global market with the help of their
local MNC customers

11.  Support to SMEs has to be provided not just at the startup
phase, but in subsequent stages of its life cycle as well,
including the internationalization stage.
 It aims to provide a wide variety of support services to
SMEs, similar to those found in developed countries.
 International trade will increasingly be influenced by the
rapidly expanding GVCs of MNCs.