From the Foreword and Executive Summary, the 2019 edition of the Global Value Chain Development Report captures the underlying technological and economic forces that are transforming the patterns of global interconnectedness. The report notes that there are two megatrends in process. One is the growth of developing countries, the expansion of the middle classes in them, and the shift in the share of global purchasing power toward the developing economies. The second megatrend is the digitization of the underpinnings of entire economies and, by implication, global value chains (GVCs), and the global economy.
More than two-thirds of world trade occurs through GVCs, in which production crosses at least one border, and typically many borders, before final assembly. The phenomenal growth in GVC-related trade has translated into significant economic growth in many countries across the globe over the last two decades, fueled by reductions in transportation and communication costs and declining trade barriers. But, at the same time, it has contributed to distributional effects that mean that the benefits of trade have not always accrued to all, which has, at least in part, been a driver in the backlash against globalization and the rise of protectionism and threats to global and regional trade agreements. In addition, new technological developments such as robotics, big data, and the Internet of Things (IoT) are beginning to reshape and further transform GVCs. This second GVC development report takes stock of the recent evolution of GVC trade in light of these developments. Read more.