One of the major changes in the current global business environment is thatthe global value chains (GVCs) of just a few multinational enterprises (MNEs)conduct most of the global business activities. These GVCs are structurallysubdivided and regionally dispersed as a result of these MNEs’ new strategies,which are influenced by the globalization, liberalization and deregulation ofnations and enterprises, the development of transportation and telecommunicationtechnologies, and the growth of emerging market economies. Theprocess of such globalization is further accelerated by the decreasing costs ofcoordinating international division of labor activities and simultaneously providesthreats and opportunities not only for multinational enterprises, but also for smalland medium enterprises (SMEs).Small and medium enterprises (SMEs) can secure financial stability, increaseproductivity and enter the global market by participating in GVCs of the MNEs.However, SMEs require higher levels of financial and managerial resources andface more global competition to successfully participate in GVCs. Due to themany opportunities and threats to SMEs that come with participating in GVCs,appropriate government policies providing protection and support are needed forSMEs in developing, emerging, as well as developed markets (OECD, 2007;UNCTAD, 2010).The purpose of this study is to examine the political and strategic implicationsof supporting the participation of Korean SMEs in GVCs through detailedanalyses of the current global competitiveness and industrial revealedcomparative advantages (RCAs) of Korean SMEs. While previous studies on thistopic exist, this study differentiates itself in three main ways. (1) This is thefirst time trade in value added(TiVA) is used to analyze Korean SMEs’ industrialcompetitiveness. (2) The methods of Korean SME participation in GVCs areclassified by domestic and foreign production, of which competitiveness ismeasured by domestic value added and foreign direct investment, respectively.