OECD Skills Outlook 2017

OECD Skills Outlook 2017

Skills and Global Value Chains You do not have access to this content

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Author(s):
OECD
04 May 2017
Pages:
164
ISBN:
9789264273351 (PDF) ; 9789264274723 (EPUB) ;9789264273177(print)
DOI: 
10.1787/9789264273351-en

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Since the 1990s, the world has entered a new phase of globalisation. Information and communication technology, trade liberalisation and lower transport costs have enabled firms and countries to fragment the production process into global value chains (GVCs). Many products are now designed in one country and assembled in another country from parts manufactured in several countries. Thirty percent of the value of exports of OECD countries comes from abroad. In this new context, GVCs and skills are more closely interrelated than ever. Skills play a key role in determining countries’ comparative advantages in GVCs. A lot of the opportunities and challenges brought about by GVCs are being affected by countries’ skills.

The OECD Skills Outlook 2017 shows how countries can make the most of global value chains, socially and economically, by investing in the skills of their populations. Applying a “whole of government” approach is crucial. Countries need to develop a consistent set of skills-related policies such as education, employment protection legislation, and migration policies, in coordination with trade and innovation policies. This report presents new analyses based on the Survey of Adult Skills and the Trade in Value Added Database. It also explains what countries would need to do to specialise in technologically advanced industries.

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  • Foreword

    “Global value chains (GVCs)” have immensely increased the potential for individuals and nations to benefit from globalisation. Workers in different parts of the world can now contribute to the production of a single product, giving even small companies and countries unprecedented opportunities to reach global markets and create new jobs, and generating new gains in productivity that benefit consumers. But they can also leave people behind. While many jobs depend on GVCs, GVCs have meant that some workers have lost their jobs and many of them have not seen their income growing over the past decade.

  • Executive summary

    The world has entered a new phase of globalisation over the past two decades that presents countries and workers with new challenges and opportunities. Helped by the rise of information technology and transportation innovations, production has become globalised and fragmented along so‐called global value chains: workers across different countries now contribute to the design, production, marketing and sales of the same product. On average in OECD countries, one-third of jobs in the business sector depend on demand in foreign countries. Thirty percent of the value of exports of OECD countries now originates from abroad.

  • Glossary

    Automation of production: The use of machines and automatic devices to perform part of the production process. It is generally used to reduce human intervention and is therefore considered to replace human labour by machines.

  • Overview: Skills to seize the benefits of global value chains

    Over the last two decades, international patterns of production and trade have changed, leading to a new phase of globalisation. Each country’s ability to make the most of this new era, socially and economically, depends heavily on how it invests in the skills of its citizens. This chapter develops a scoreboard that measures the extent to which countries have been able to make the most of global value chains through the skills of their populations. It assesses jointly how countries have performed in recent years in terms of skills, global value chain development, and economic and social outcomes. This chapter offers an overview of the whole report. It examines how countries can ensure their performance within global value chains translates into better economic and social outcomes through effective, well-co-ordinated skills policies.

  • Skills and global value chains: What are the stakes?

    This chapter explores how investing in skills and knowledge can increase country’s ability to make the most of global value chains (GVCs), socially and economically. It shows how GVCs have developed and the extent to which countries vary in their participation in these chains; examines the benefits that participation in GVCs can have for productivity growth, especially when it goes hand in hand with investment in skills; shows how participation in GVCs can affect employment and inequalities; outlines the characteristics that expose jobs to the risk of offshoring and the implications for workers’ skills; and investigates how participation in GVCs affects job quality and how stronger skills and better education can translate participation in GVCs into better jobs.

  • What kinds of skills give countries a global advantage?

    The chapter analyses how different types of skills relate to export performance and participation in global value chains (GVCs) and investigates how skills characteristics shape countries’ comparative advantages in GVCs. To investigate the links between skills and GVCs, this chapter uses a new set of empirical analyses based on the Survey of Adult Skills and the Trade in Value Added (TiVA) database. It puts forward two major skills characteristics that shape countries’ comparative advantages in GVCs: the skills mix of the population and the role of pools of workers performing at the expected level. The chapter also indicates which industries countries could specialise in, given their skills sets, and what countries would need to do to specialise in technologically advanced industries.

  • How skills policies can make the most of global value chains

    This chapter discusses how countries can make the most of global value chains through effective and well-co-ordinated skills policies. These policies have to develop the skills countries need to participate and specialise in global value chains; use their skills pools effectively and anticipate changing skills needs; enhance international co‐operation in education, training and innovation; and deal with the risks and implications of offshoring. A “whole of government” approach is needed to co-ordinate education and training policies with policies such as employment protection legislation, non-compete clauses and migration policies.

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