Strengthening linkages between foreign direct investment (FDI) and small and medium-sized enterprises (SMEs) is important to boost productivity and innovation across countries and regions in the OECD and beyond. This policy toolkit offers policy advice to national and subnational governments on how to increase knowledge and technology benefits from FDI on domestic SMEs and the local economy. It presents a conceptual framework for understanding the main enabling conditions and diffusion channels of FDI-SME linkages and spillovers, and a set of diagnostic tools to assess the spillover potential. It also provides an assessment tool for policy and institutional frameworks enabling FDI-SME linkages. This toolkit benefits from insights of a pilot mapping of policy initiatives across the 27 EU Member States, which are described in the second part of the report.