Professor Christopher Findlay
Executive Dean of the Faculty of the Professions at the University of Adelaide
Vice-Chair of AUSPECC
There is strong evidence that businesses are doing things differently. Production processes are being organized into a series of value adding steps in different locations, organized in what is being referred to as Global Value Chains. These chains offer new opportunities for developing economies to enter global markets, and provide options for adjustment to economies at later stages of developing undergoing structural change. They offer finer options for capturing the benefits of differences in competitiveness in production process and better growth prospects as a result.
Data from the ADB shows over the period 1995 to 2008 that, while the rate varies a lot, the participation in GVCs in nearly every Asian economy increased1. An exception was Hong Kong, whose position remained stable, having already developed a sophisticated system of production and distribution. Participation measures here refer to the extent to which imported inputs are used in local production and to which outputs are inputs into production elsewhere. The phenomenon is relevant to goods production but also applies in services.