OECD Skills Outlook 2017

Skills and Global Value Chains

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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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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.

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