Gv cs final_project
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All countries participate in global value chains, but not equally. While GVCs can boost growth, create jobs, and reduce poverty, participation is uneven across and within countries. There are threats to the continued growth of GVCs from trade conflicts, emerging technologies, and policy uncertainty that are slowing economic growth and investment. If trade conflicts worsen and undermine investor confidence, over 30 million people could be pushed into poverty according to the World Bank. Digitalization and new technologies like 3D printing also threaten GVCs by enabling more localized production. The future of GVCs is uncertain as participation may become more regional and concentrated in local hubs close to end markets.
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Introduction to AI for Nonprofits with Tapp Network
Gv cs final_project
- 1. COUNTRIES PARTICIPATION TO GVCS All countries participate in GVCs – but not in the same way. This is triggered mainly by the fact that GVCs can boost growth, create better jobs, reduce poverty. The flip side of this participation is the fact that participation is not distributed equally across and within countries.
- 2. THREATS TO GVCs • Growth of global value chains has stalled amid trade conflicts and emerging new technologies. • Because of slower economic growth and a maturing of manufacturing in dynamic regions such as China, trade conflicts among large economies have contributed to the decline and could lead to a retrenchment or a segmentation of GVCs. • “If the trade conflict worsens and causes a slump in investor confidence, the effects on global growth and poverty could be significant - more than 30 million people could be pushed into poverty,” the World Bank said in the report. “And global income could fall by as much as $1.4 trillion.”
- 3. THREATS TO GVCs (cont’d) • Increased protection was likely to induce the reshoring of global value chains or shift them to new locations unless policy predictability is restored, and uncertainty was delaying investment plans. • The stalling of global value chains is bad news for emerging market countries that participate in global value chains, because those that do have seen the steepest declines in poverty, including China, Vietnam, and Bangladesh. • New technologies such as 3-D printing that could draw production closer to the consumer is another threat to GVCs.
- 4. THE FUTURE OF GVCs • Given the threats on GVCs, any discussion on their future in the context of globalisation may seem overlooked. • Digitalisation of production may become the biggest game changer. Reshoring of activities will become increasingly attractive if automated. • The overall employment impact of reshoring will be limited. • If 3D printing spread widely, the effects of digitalisation on GVC trade will be larger.
- 5. THE FUTURE OF GVCs (CONT’D) • Wage costs will rise especially in emerging economies, but not very certain of the magnitude so to influence decision on investment. • Transport cost may also rise but again, not certain of the magnitude. • International trade of goods and services, diversification, the hidden and extra costs of offshoring will certainly be impacted. • In addition to global hubs in GVCs, production may become increasingly concentrated in regional/local hubs closer to end markets both in developed and emerging economies. • Obviously, the future of GVCs may look quite different from the past.