Staying Competitive in the Global Economy

Staying Competitive in the Global Economy

Moving Up the Value Chain You do not have access to this content

Click to Access:
  • PDF
  • READ
29 May 2007
9789264034259 (PDF) ;9789264033658(print)

Hide / Show Abstract

Global value chains are radically altering how goods and services are produced--parts made in one country, for instance, are increasingly assembled in another and sold in a third. The globalisation of production has changed the industrial structure within OECD countries, and in some sectors blunted their competitiveness. Another major consequence has been fears of job losses, due to outsourcing and offshoring—not only in manufacturing but also in services. The rapid integration of China and India, with their large pool of educated people, further reinforces these concerns.  How should OECD countries respond?

This report brings together OECD data on the globalisation of value chains, including the rise of outsourcing/offshoring.  It first examines how OECD countries are affected by the globalisation of production, on both the macroeconomic and sector-specific levels. The costs and benefits of globalisation are then discussed, with an emphasis on employment and productivity. Finally, this report analyses how globalisation impacts the competitiveness of OECD countries, highlighting the need for an effective innovation strategy.  The report discusses not only the moving up the value chain that takes place in OECD countries but also in China, as R&D is increasingly going  to emerging countries.

Also available in French
loader image

Expand / Collapse Hide / Show all Abstracts Table of Contents

  • Mark Click to Access
  • Executive Summary
    The pace and scale of today’s globalisation is without precedent and is associated with the rapid emergence of global value chains as production processes become more geographically fragmented. Globalisation also increasingly involves foreign direct investment (FDI) and trade in services, as many service activities become internationalised. Another distinctive feature is that the current phase of globalisation is not restricted to OECD countries, but also involves large emerging global players such as China, India, Brazil and Russia.
  • The Challenge of Globalisation
    This chapter discusses the driving forces behind economic integration and shows that, although the process of globalisation started decades ago, in its current form globalisation displays some distinctive features, in particular the emergence of global value chains, the key role of multinational enterprises, the increasing outsourcing/offshoring of services and the rapid integration of large countries such as China and India.
  • The Growth of Global Value Chains
    This chapter offers a broad range of empirical evidence which shows the increasingly global integration of OECD countries and discusses the economic importance of emerging countries. New evidence based on input-output tables is developed to demonstrate global linkages among countries. In an analysis of differences among industries, the increasing outsourcing/offshoring of services is discussed. The chapter also highlights the key role of multinational enterprises in the current globalisation.
  • The Costs and Benefits of Globalisation
    This chapter discusses the costs and benefits of economic globalisation for OECD countries. Because of the diversity of the effects of globalisation and the complexity of analysing them, the discussion centres on the employment and productivity effects of globalisation. Based on empirical evidence, short-term losses in employment are weighed against more long-term effects on productivity as well as employment. The chapter specifically discusses the impact multinational enterprises may have given their key role in the current phase of globalisation.
  • Towards a Knowledge Economy: A Challenge for All Countries
    This chapter discusses the impact of globalisation on the competitiveness of OECD countries by analysing the evolution of comparative advantages of individual countries as well as on de-industrialisation in developed countries. Empirical evidence is used to assess how rapidly OECD countries are moving up the value chain and shift to more knowledge-intensive activities. But this structural process seems to be taking place not only in OECD countries, as China is also moving up the value chain. The extent of the upgrading of the Chinese economy is examined, together with China’s importance in the increasing internationalisation of R&D.
  • Policy Implications of Globalisation
    This chapter identifies the most important policy challenges for OECD countries in today’s global economy. It discusses the need for a powerful innovation strategy in order to move up the value chain, as well as the accompanying measures that can soften the inevitable adjustment costs of globalisation.
  • Annex A. R&D Intensity for Aggregate of 12 OECD Countries, 1991-99
  • Add to Marked List
Visit the OECD web site