Understanding Global Value Chains – G20/OECD/WB Initiative

Understanding Global Value Chains – G20/OECD/WB Initiative

 

There is lot of opacity in understanding of GVCs.  Efforts are underway since last few years to get better analytical and statistical tools to understand International Trade and Global Value Chains.

Globalization in Trade and Finance encouraged by International organizations such as IMF/WB/OECD/WTO/UNCTAD/UNIDO and others has changed the landscape of Trade.

There is still a long way to go to make better sense of issues and concerns for policy makers.

OECD/WB/WTO along with G20 Trade Ministers have initiated efforts since 2012.

 

From Global Value Chains 

Introduction to GVCs

International production, trade and investments are increasingly organised within so-called global value chains (GVCs) where the different stages of the production process are located across different countries. Globalisation motivates companies to restructure their operations internationally through outsourcing and offshoring of activities.

Firms try to optimise their production processes by locating the various stages across different sites. The past decades have witnessed a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc.

This emergence of GVCs challenges conventional wisdom on how we look at economic globalisation and in particular, the policies that we develop around it.

 

Trade in Value Added

The goods and services we buy are composed of inputs from various countries around the world. However, the flows of goods and services within these global production chains are not always reflected in conventional measures of international trade. The joint OECD – WTO Trade in Value-Added (TiVA) initiative addresses this issue by considering the value added by each country in the production of goods and services that are consumed worldwide. TiVA indicators are designed to better inform policy makers by providing new insights into the commercial relations between nations.

 

GVCs and Trade Policy

Global value chains (GVCs) have become a dominant feature of world trade, encompassing developing, emerging, and developed economies. The whole process of producing goods, from raw materials to finished products, is increasingly carried out wherever the necessary skills and materials are available at competitive cost and quality. Similarly, trade in services is essential for the efficient functioning of GVCs, not only because services link activities across countries but also because they help companies to increase the value of their products. This fragmentation highlights the importance of an ambitious complementary policy agenda to leverage engagement in GVCs into more inclusive growth and employment and the OECD is currently undertaking comprehensive statistical and analytical work that aims to shed light on the scale, nature and consequences of international production sharing.

 

From Global Value Chains/Global Production Networks: Organizing the Global Economy

The key organizational feature of the global economy?

  • “Global Value Chains are defined by fragmented supply chains, with internationally dispersed tasks and activities coordinated by a lead firm (a TNC)” (UNCTAD, 2013, p.125; original italics).
  • Data gathering exercises:UNCTAD,OECD,WTO,JETRO…
  • Now firmly on the agenda among leading international economic organizations
  • The international division of labour:imperial/colonialsystems and exchanges of raw materials and finished goods
  • The new international division of labour(NIDL):establishment of overseas production bases of core country TNCs
  • The global division of labour:much more complex global networks lying behind the production of different goods and services

The phenomenon

  • About 60% of global trade, which today amounts to more than $20 trillion, consists of trade in intermediate goods and services that are incorporated at various stages in the production process of goods and services for final consumption” (UNCTAD, 2013, p. 122)
  • Not new, but since 2000 trade and FDI have increased exponentially, and ahead of GDP growth, highlighting a growth in TNC coordinated global value chains
  • Double counting – approx. 25-30% of value of world trade, e.g. the iPhone example. Not just trade from China to US, but incorporates high value components from Japan, South Korea etc.
  • Beyond national economies and basic trade data, and beyond TNCs and FDI, to more complex organizational structures involving intra-firm trade, arm’s length trade and non-equity modes e.g. subcontracting

 

 

From GLOBAL VALUE CHAIN ANALYSIS: A PRIMER

gvc5

 

From Global Capitalism and Commodity Chains: Looking Back, Going Forward

gvc4

 

From Global Value Chains/Global Production Networks: Organizing the Global Economy

gvc1gvc-2gvc3

 

Key Terms

  • Global Commodities Chains (GCCs)
  • Global Production Networks (GPNs)
  • Global Value Chains (GVCs)
  • Strategic Coupling
  • Economic Deepening
  • Trans National Corporation (TNC)
  • Multi National Corporation (MNC)
  • Multi National Enterprises (MNE)
  • SMILE curve
  • Economic Clusters
  • UNIDO (United Nations Industrial Development Organization)
  • OECD (Organization for Economic Cooperation and Development)
  • WTO (World Trade Organization)
  • WB (World Bank)
  • UNESCAP (Economic and Social Commission for Asia and Pacific)
  • UNCTAD ( United Nations Commission for Trade and Development)
  • ILO ( International Labor Organization)
  • G20 ( Group of 20 Nations)
  • TIVA ( Trade in Value Added)
  • On shoring
  • Off shoring
  • Outsourcing

 

 

Key People

  • Gary Gereffi
  • Neil M Coe
  • Jennifer Bair
  • Henry Wai-chung Yeung
  • Timothy Sturgeon

 

 

Key Sources of Research:

 

Measuring Trade in Value Added: An OECD-WTO joint initiative

https://www.oecd.org/tad/measuringtradeinvalue-addedanoecd-wtojointinitiative.htm

 

 

Global Value Chains

https://www.oecd.org/about/g20-oecd-global-value-chains.htm

https://www.oecd.org/sti/ind/global-value-chains.htm

 

 

OECD Stocktaking Seminar on Global Value Chains 2014

https://www.oecd.org/g20/topics/trade-and-investment/g20-oecd-global-value-chains-2014.htm

 

 

IMPLICATIONS OF GLOBAL VALUE CHAINS
FOR TRADE, INVESTMENT, DEVELOPMENT AND JOBS

OECD, WTO, UNCTAD 6 August 2013

Prepared for the
G-20 Leaders Summit
Saint Petersburg (Russian Federation) September 2013

 

Click to access G20-Global-Value-Chains-2013.pdf

 

 

Inclusive Global Value Chains

Policy options in trade and complementary areas for GVC Integration by small and medium enterprises and low-income developing countries

OECD and World Bank Group

Report prepared for submission to G20 Trade Ministers Meeting Istanbul, Turkey, 6 October 2015

 

Click to access Participation-Developing-Countries-GVCs-Summary-Paper-April-2015.pdf

 

 

GLOBAL VALUE CHAINS: CHALLENGES, OPPORTUNITIES, AND IMPLICATIONS FOR POLICY

OECD, WTO and World Bank Group

Report prepared for submission to the G20 Trade Ministers Meeting Sydney, Australia, 19 July 2014

 

Click to access gvc_report_g20_july_2014.pdf

 

 

Making Global Value Chains (GVCs) Accessible to All

Progress Report
Meeting of the Council at Ministerial Level

6-7 May 2014

 

Click to access MCM-GVC-Progress-Report-May-2014.pdf

 

 

Inclusive Global Value Chains

Policy Options for Small and Medium Enterprises and Low-Income Countries

Ana Paula Cusolito, Raed Safadi, and Daria Taglioni

2016

Click to access 9781464808425.pdf

 

 

Global value chains in a changing world

Edited by Deborah K. Elms and Patrick Low

2013

 

Click to access aid4tradeglobalvalue13_e.pdf

 

 

The rise of global value chains

WORLD TRADE REPORT 2014

 

Click to access wtr14-2c_e.pdf

 

 

Who Captures the Value in the Global Value Chain? High Level Implications for the World Trade Organization

Peter Draper and Andreas Freytag

July 2014

 

Click to access E15-Global-Value-Chains-DraperFreytag-FINAL.pdf

 

 

Joining, Upgrading and Being Competitive in Global Value Chains: 

A Strategic Framework

 

O. Cattaneo G. Gereffi S. Miroudot D. Taglioni

 

Click to access 2013-04_WorldBank_wps6406_Cattaneo_Gereffi_Miroudot_Taglioni_Competitiveness_GVCs.pdf

 

 

Global value chains, development and emerging economies

Gary Gereffi

2015

Click to access WP_18.pdf

 

 

GLOBAL VALUE CHAINS IN A POSTCRISIS WORLD A DEVELOPMENT PERSPECTIVE

Olivier Cattaneo, Gary Gereffi, and Cornelia Staritz

2010

Click to access Gereffi_GVCs_in_the_Postcrisis_World_Book.pdf

 

 

 

Global value chains and global production networks in the changing international political economy: An introduction

Jeffrey Neilson1, Bill Pritchard1 and Henry Wai-chung Yeung

2014

http://www.tandfonline.com/doi/pdf/10.1080/09692290.2013.873369

 

 

Combining the Global Value Chain and global I-O approaches

 

 

 

Global value chains and world trade : Prospects and challenges for Latin America

René A. Hernández
Jorge Mario Martínez-Piva Nanno Mulder

 

http://repositorio.cepal.org/bitstream/handle/11362/37176/S2014061_en.pdf?sequence=1

 

 

 

Global value chains in a post-Washington Consensus world

Gary Gereffi

2014

 

https://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/10696/2014%20Feb_RIPE_Gereffi,%20Gary_GVCs%20in%20a%20post-Washington%20Consensus%20world.pdf?sequence=1

 

 

GLOBAL VALUE CHAINS AND DEVELOPMENT: Governance, Upgrading & Emerging Economies

Gary Gereffi

Director, Duke CGGC Duke University

2016

Click to access 697_10587.pdf

 

 

 

MaPPing gLoBaL VaLUe CHainS

Koen De Backer and Sébastien Miroudot

2014

Click to access ecbwp1677.pdf

 

 

 

Global Value Chains/Global Production Networks: Organizing the Global Economy

Neil M. Coe

2013

Click to access DrCoe.pdf

 

 

 

GLOBAL VALUE CHAIN ANALYSIS: A PRIMER

Gary Gereffi
Karina Fernandez-Stark

July 2016

 

http://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/12488/2016-07-28_GVC%20Primer%202016_2nd%20edition.pdf?sequence=1

 

 

 

WHY THE WORLD SUDDENLY CARES ABOUT GLOBAL SUPPLY CHAINS

GARY GEREFFI AND JOONKOO LEE

Duke University

http://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/10699/2012-07_JSCM_Gereffi%20&%20Lee_Why%20the%20world%20suddenly%20cares%20about%20global%20supply%20chains.pdf?sequence=1

 

 

 

The Economic Crisis: A Global Value Chain Perspective

 

Gary Gereffi

 

Click to access a-global-value-chain-perspective.pdf

 

 

The governance of global value chains

Gary Gereffi John Humphrey Timothy Sturgeon

2005

 

Click to access sturgeon2005.pdf

 

 

Global production networks and the analysis of economic development

Jeffrey Henderson, Peter Dicken, Martin Hess, Neil Coe and Henry Wai-Chung Yeung

2002

Click to access 2002_RIPE.pdf

 

 

GLOBAL VALUE CHAINS: INVESTMENT AND TRADE FOR DEVELOPMENT

UNCTAD 2013

Click to access wir2013_en.pdf

 

 

Asia and Global Production Networks

Implications for Trade, Incomes and Economic Vulnerability

Benno Ferrarini David Hummels

2014

Click to access asia-and-global-production-networks.pdf

 

 

 

Global Production Networks: Theorizing Economic Development in an Interconnected World

By Neil M. Coe, Henry Wai-Chung Yeung

2015

 

 

Toward a Dynamic Theory of Global Production Networks

Henry Wai-chung Yeung

Neil M. Coe

 

Click to access 2015_GPN_theory_paper_EG%20Vol91(1)_29-58.pdf

 

 

Global Value Chains and deVelopment

unido’s support towards inclusive and sustainable industrial development

2015

Click to access GVC_REPORT_FINAL.PDF

 

 

Global Value Chains: The New Reality of International Trade

Sherry Stephenson

December 2013

Click to access E15_GVCs_BP_Stephenson_FINAL.pdf

 

 

GLOBAL VALUE CHAINS SURVEYING DRIVERS AND MEASURES

João Amador and Sónia Cabral

2014

Click to access ecbwp1739.en.pdf

 

 

GLOBAL VALUE CHAINS AND INTERCONNECTEDNESS OF ASIA-PACIFIC ECONOMIES

Asia Pacific Trade and Investment Report

2015

 

Click to access Chapter%207%20-%20GVCs%20in%20the%20Asia-Pacific.pdf

Click to access Full%20Report%20%20-%20APTIR%202015.pdf

 

 

Global Capitalism and Commodity Chains: Looking Back, Going Forward

JENNIFER BAIR

2005

COMPETITION & CHANGE, Vol. 9, No. 2, June 2005 153–180

 

 

Global Value Chains: Development Challenges and Policy Options

Proposals and Analysis

December 2013

Click to access E15-Global-Value-Chains-Compliation-Report-FINAL.pdf

 

 

Globalizing’ regional development: a global production networks perspective

Neil M Coe, Martin Hess, Henry Wai-chung Yeung, Peter Dicken and Jeffrey Henderson

Click to access 2004_TIBG.pdf

 

 

Multilateral approaches to Global Supply Chains

 

International Labour Office

2014

 

Click to access wcms_485351.pdf

Reflexivity, Recursion, and Self Reference

 Reflexivity, Recursion, and Self Reference

 

From Reflexivity and Eigenform The Shape of Process

 

“Reflexive” is a term that refers to the presence of a relationship between an entity and itself. One can be aware of one’s own thoughts. An organism produces itself through its own action and its own productions. A market or a system of finance is composed of actions and individuals, and the actions of those individuals influence the market just as the global information from the market influences the actions of the individuals. Here it is the self-relations of the market through its own structure and the structure of its individuals that moves its evolution forward. Nowhere is there a way to cut an individual participant from the market effectively and make him into an objective observer. His action in the market is concomitant to his being reflexively linked with that market. It is just so for theorists of the market, for their theories, if communicated, become part of the action and decisionmaking of the market. Social systems partake of this same reflexivity, and so does apparently objective science and mathematics. In order to see the reflexivity of the practice of physical science or mathematics, one must leave the idea of an objective domain of investigation in brackets and see the enterprise as a wide ranging conversation among a group of investigators. Then, at once, the process is seen to be a reflexive interaction among the members of this group. Mathematical results, like all technical inventions, have a certain stability over time that gives them an air of permanence, but the process that produces these novelties is every bit as fraught with circularity and mutual influence as any other conversation or social interaction.

 

In such a context, every object is inherently a process, and the structure of the domain as a whole comes from the relationships whose exploration constitutes the domain. There is no place to hide in a reflexive domain, no fundamental particle, no irreducible object or building block. Any given entity acquires its properties through its relationships with everything else. The sense of such a domain is not at all like the set theoretic notion of collections or unrelated things, or things related by an identifiable property. It is more like a conversation or an improvisation, held up and moving in its own momentum, creating and lifting sound and meaning in the process of its own exchange. Conversations create spaces and events, and these events create further conversations. The worlds appearing from reflexivity are worlds nevertheless, with those properties of partial longevity, emergence of patterns, and emergence of laws that we have come to associate with seemingly objective reality.

 

From The march of self-reference

 

One of the main characteristics of social systems as well as individual systems, distinguishing them from many other systems, is indeed their potential for self- referentiality in the latter sense. Concretely, this means not only that the self- knowledge accumulated by the individual in turn affects both his structure and modus operandi, but it also implies – as especially stressed by constructivism – that in self-referential systems like individuals and social systems, feedback loops exist between parts of external reality on the one hand, and models and theories about these parts of reality on the other hand. To a large extent, both individuals and collectivities indeed produce their own world.

While constructivism, as an explanatory paradigm, is focused on individuals, it is certainly valid for social systems as well. Concretely, whenever social scientists systematically accumulate new knowledge about the structure and functions of their society, or about subgroups within that society, and when they subsequently make that knowledge known, through their publications or sometimes even through the mass media – in principle also to those to whom that knowledge pertains – the consequence often is that such knowledge will be invalidated, because the research subjects may react to this knowledge in such a way that the analyses or forecasts made by the social scientists are falsified. In this respect, social systems are different from many other systems, including (most?) biological ones. There is a clearly two-sided relationship between self-knowledge of the system on the one hand, and the behavior and structure of that system on the other hand.

Biological systems, like social systems, admittedly do show goal-oriented behavior of actors, self-organization, self-reproduction, adaptation and learning. But it is only psychological and social systems that arrive systematically, by means of experiment and reflection, at knowledge about their own structure and operating procedures, with the obvious aim to improve these. This holds true on the micro-level of the individual, as in psychoanalysis or other self-referential activities, and on the macro-level of world society, as in planning international trade or optimal distribution of available resources.

For social scientists, the consequences of self-referentiality are interesting not only for gaining an insight in the functioning of social systems, but also for the methodology and epistemology used to study them. There is a paradox here: as stated above, the accumulation of knowledge often leads to a utilization of that knowledge – both by the social scientists and the objects of their research – which may change or even invalidate the validity of that knowledge (Geyer and van der Zouwen, 1988; Henshel, 1990). It is maintained here that this paradox is interesting as well for psychologists, and exists also at the individual level where the individual not only constructs his world, but also continually reconstructs it. This can be seen in a normal life, but is especially visible in several forms of individual therapy, where old self- knowledge is invalidated by new – though not necessarily always better – self-knowledge.

The usual examples of self-referential behavior in social science consist of self-fulfilling and self-defeating prophecies. Henshel (1990) for example, has studied serial self-fulfilling prophecies, where the accuracy of earlier predictions, themselves influenced by the self-fulfilling mechanism, impacts upon the accuracy of the subsequent predictions. In much of empirical social science research. However, self-referential behavior does not loom large – which is rather amazing in view of its supposedly being an essential characteristic of individual human functioning. In this case the research methodology used may be an issue: survey research, where people are asked what they think or feel, offers little opportunity to bring out self-referential behavior, while depth interviews, which concentrate more on the awhyo than the awhato of people’s opinions have a better chance to elicit self-referential remarks in this respect.

 

Key People:

  • Francisco Varela
  • Lois Kauffman
  • Steven J Bartlett
  • Howard Pattee
  • Niklas Luhmann
  • Felix Geyer
  • George Soros
  • Eric D. Beinhocker
  • Stuart A. Umpleby
  • Heinz Von Foerster

 

Key Sources of Research:

 

Reflexivity. A Source-Book in Self-Reference

Steven Bartlett

http://www.willamette.edu/~sbartlet/reflexivity_and_theory%20of_reference.html

ub.eur.nl/pub/7870http://rep7

 

Self-reference: Reflections on Reflexivity

Steven J. Bartlett & Peter Suber (Eds.)

Dordrecht: Martinus Nijhoff, 1987. Now published by Springer Science.

 

Self Reference and Recursive Forms

Lois Kauffman

Click to access SelfRefRecurForm.pdf

 

The Complexity of Self-reference
A Critical Evaluation of Luhmann’s Theory of Social Systems

Roberto Poli

 

Click to access quad50.pdf

 

Reflexivity and Eigenform The Shape of Process

Louis H. Kauffman

 

Click to access ReflexPublished.pdf

 

The march of self-reference

Felix Geyer

 

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.202.9606&rep=rep1&type=pdf

 

Essays on Self-reference

By Niklas Luhmann

 

Evolving Self Reference

Howard Pattee

Click to access 09e4150577eb05a2cd000000.pdf

 

SELF-REFERENCE, PHENOMENOLOGY, AND PHILOSOPHY OF SCIENCE

Steven James Bartlett

Click to access Bartlett_Self-reference,%20Phenomenology,%20and%20Philosophy%20of%20Science.pdf

 

 

Recursivity and Self-Referentiality of Economic Theories and Their Implications for Bounded Rational Actors

 

Marco Lehmann-Waffenschmidt Serena Sandri

Click to access DDPE200703.pdf

 

A Calculus for Self Reference

F Varela

Click to access VarelaCSR.pdf

 

Ouroboros avatars:
A mathematical exploration of Self-reference and Metabolic Closure

Jorge Soto-Andrade, Sebastia ́n Jaramillo ,Claudio Gutie ́rrez and Juan-Carlos Letelier

Click to access 0262297140chap115.pdf

 

Self Reference and Autopoiesis

A Locker

Click to access metatheor-presupp-autopoiesis.pdf

 

Snakes all the Way Down: Varela’s Calculus for Self-Reference and the Praxis of Paradise

André Reichel

 

Click to access 09e4150d0287eebed2000000.pdf

 

Self-Reference and Time According to G. Spencer-Brown 

Andreas Kull

 

http://sfile-pull.f-static.com/image/users/112431/ftp/my_files/sbrown.pdf?id=11014655

 

Reflexivity in Economics: An Experimental Examination on the Self-Referentiality of Economic Theories

By Serena Sandri 2009

Springer

 

Operational Closure and Seif-Reference: On the Logic of Organizational Change

Markus Schwaninger1and Stefan N. Groesser

Click to access 235_Operational%20Closure%20and%20Self-Reference_SRBS%202012.pdf

 

Fallibility, reflexivity, and the human uncertainty principle

George Soros

http://www.tandfonline.com/doi/pdf/10.1080/1350178X.2013.859415

 

Reflexivity, complexity, and the nature of social science

Eric D. Beinhocker

http://www.tandfonline.com/doi/pdf/10.1080/1350178X.2013.859403

 

Reflexivity and Economics: George Soros’s Theory of Reflexivity and the Methodology of Economic Science

http://www.tandfonline.com/toc/rjec20/20/4

 

REFLEXIVITY IN SOCIAL SYSTEMS: THE THEORIES OF GEORGE SOROS

Stuart Umpleby

Click to access 0c9605187eecf06dff000000.pdf

 

Reflexivity, Expectations Feedback and Almost Self-fulfilling Equilibria: Economic Theory, Empirical Evidence and Laboratory Experiments

Cars Hommes

August 14, 2013

http://dare.uva.nl/document/2/156151

 

 Reflexivity, path dependence, and disequilibrium dynamics

Anwar Shaikh

Click to access 2-Reflexivity,%20path%20dependence,%20and%20disequilibrium%20dynamics.pdf

 

Second-Order Economics as an Example of Second-Order Cybernetics

Stuart A. Umpleby

 

Click to access 890.pdf

 

Reflexivity and Equilibria

Francesco Guala

 

Click to access DEMM-2013_16wp.pdf

 

Umpleby, Stuart A.

“Fundamentals and history of Cybernetics.”

World Multi-Conference on Systemics, Cybernetics, and Informatics. 2006.

Click to access videoSUfh-slides.pdf

 

Complexity to Reflexivity: Underlying Logics Used in Science

Stuart A. Umpleby

Click to access 55edc5ad08ae199d47be4b99.pdf

 

EigenForm

Louis H. Kauffman

 

Click to access Eigen.pdf

 

Laws of Form and the Logic of Non-Duality

Louis H. Kauffman

Click to access KauffSAND.pdf

 

EigenForm

Louis H. Kauffman

 

Click to access Eigenform.pdf