Summary of Global Value Chains

Looking for the report?
We have the summary! Get the key insights in just 5 minutes.

Global Value Chains summary
Start getting smarter:
or see our plans

Rating

7

Qualities

  • Comprehensive
  • Analytical
  • Innovative

Recommendation

In a joint report, the OECD, the World Trade Organization and the World Bank Group explain that global value chains (GVCs) have made dramatic changes in the nature of international trade. Yet for GVCs to function effectively, the commercial environment – which includes government – must provide a whole range of supportive elements, including infrastructure and jobs training. Therefore, policy makers must consider GVCs’ linked functions as a whole process, not as fragments. getAbstract recommends this comprehensive report to those who deal with international trade, including government officials, corporate managers and research analysts.

About the Authors

The OECD promotes global economic advancement. The World Trade Organization seeks to ensure free trade among nations. The World Bank provides financial and technical assistance to developing countries.

 

Summary

Transforming Trade and Production

New production patterns have boosted the growth of global value chains (GVCs), which coordinate the spread of capital and knowledge through manufacturing and distributing goods and services. Technological changes in communication and transportation have dramatically reduced costs, allowing businesses to divide different functions among various countries. As a result, the composition of international trade has changed: Now more than 70% of global trade is in “intermediate goods and services and in capital goods.”

Global value chains require governments to adjust their mind-sets and expand their trade policies to account for interconnectivity, which constitutes “a new ‘trade-investment-services-know-how nexus’.” To maintain healthy GVCs, governments must not overemphasize exports to the detriment of imports, which are vital to companies’ production: Firms bring in raw materials or intermediate goods, add value in some way and then export them. Some parts and materials go through this process several times as they move through a GVC to become finished goods.

Trade in intermediate goods has increased in nearly all G20 countries, ...


More on this topic

By the same authors

Making Trade an Engine of Growth for All
7
Japan: Boosting Growth and Well-Being in an Ageing Society
7
China Economic Update
7
Economic Policy Reforms 2015
7
How Was Life?
7
Entrepreneurship at a Glance 2014
7
PISA 2012 Results: Creative Problem Solving
7
World Development Indicators 2014
8
Public and Private Schools
7
OECD Economic Surveys: United States
7
OECD Economic Outlook
7
Fragile States 2014
8
Global Economic Prospects (Vol. 8)
8
World Development Report 2014
7
Doing Business 2014
8

Customers who read this summary also read

Why Renegotiating NAFTA Could Disrupt Supply Chains
8
World Economic Outlook April 2017
7
Straight Talk on Trade
8
Doing Business in Africa?
8
Cause for Concern?
9
Creative Disruption
8

Related Channels

Comment on this summary