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    Preface

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    Con Nadie
    The document discusses how global value chains have evolved beyond traditional production processes to encompass services and intangible assets. It notes that pre-production and post-production tasks like R&D, branding, marketing and distribution add more value than production tasks. Firms that specialize in these beyond production tasks have control over the geographic allocation of tasks and capture the largest shares of value.

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    Preface

    Uploaded by

    Con Nadie
    6 views1 page
    The document discusses how global value chains have evolved beyond traditional production processes to encompass services and intangible assets. It notes that pre-production and post-production tasks like R&D, branding, marketing and distribution add more value than production tasks. Firms that specialize in these beyond production tasks have control over the geographic allocation of tasks and capture the largest shares of value.

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    The document discusses how global value chains have evolved beyond traditional production processes to encompass services and intangible assets. It notes that pre-production and post-production tasks like R&D, branding, marketing and distribution add more value than production tasks. Firms that specialize in these beyond production tasks have control over the geographic allocation of tasks and capture the largest shares of value.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views1 page

    Preface

    Uploaded by

    Con Nadie
    The document discusses how global value chains have evolved beyond traditional production processes to encompass services and intangible assets. It notes that pre-production and post-production tasks like R&D, branding, marketing and distribution add more value than production tasks. Firms that specialize in these beyond production tasks have control over the geographic allocation of tasks and capture the largest shares of value.

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    © All Rights Reserved
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    xi

    Global Value Chains


    Preface

    Global value chains (GVCs) have brought about revolutionary changes in international
    trade, industrialization, and economic development. The GVC story is still rapidly
    unfolding, as vividly demonstrated by the supply chain crisis, particularly for
    semiconductors and other components, that broke out during the COVID-19 pandemic,
    causing further anxiety. But beyond what is hoped will be a short-term tremor, a radical
    shift in these chains is underway as more of them move beyond traditional production
    processes to encompass services and other intangible assets. In recognition of this,
    Beyond Production is the theme of the Global Value Chain Development Report 2021,
    the third report in this biennial series. The most significant feature of this “second
    unbundling” associated with the proliferation of GVCs in the world economy is the
    separation between production and nonproduction tasks. So, looking at GVCs not just
    in terms of manufacturing production but also from the perspective of their beyond-
    production components, such as intangible assets, digital platforms, and intellectual
    property, can deepen our understanding of the critical role of GVCs in the global economy.

    GVC tasks range from preproduction (research and development, product design, and
    branding) to production to postproduction (marketing, distribution, and retailing). It
    is the firms specializing in pre- and postproduction tasks that organize, manage, and
    operate GVCs. In general, pre- and postproduction tasks add much more value than
    production tasks to a product manufactured and traded along a value chain. More
    importantly, the firms specializing in tasks beyond production have control over the
    geographic allocation of tasks. Taking the iPhone X as an example, it is Apple Inc.
    that organizes, operates, and expands the iPhone value chain. As a result, Apple alone
    captures the largest share of the iPhone X’s value added: 59%.

    In a value chain, intangible assets, such as brands, unique designs, patented technologies,
    and supply chain management know-how, rather than tangible assets are increasingly
    determining the ability of firms to lead GVCs and benefit from them. The concept of
    “trade in tasks” largely means trade between manufacturing services and the services
    of intangible assets. Studying the tasks beyond production can reveal the crucial role of
    intangibles and how multinational corporations and developed economies have been
    benefiting from unprecedented globalization.

    The 2017 and 2019 Global Value Chain Development Reports focused on the value
    chains of manufacturing products, and this, too, has largely been the case in the
    economic literature on GVCs. But the GVCs of service industries have become much
    more developed since then and play a significant role in economic development and
    globalization. The impressive achievement of India’s information technology industry in
    exporting business process management services has been largely due to its participation
    in the value chains of information services. And in a similarly impressive achievement,
    the Philippines has positioned itself as a global leader in business process outsourcing.

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