Staying Competitive In The Global Economy: Moving Up The Value Chain

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. 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.

Executive Summary Chapter 1. The Challenge of Globalisation -Introduction -The Globalisation of Value Chains -Outline of the Report Chapter 2. The Growth of Value Chains -Trade and Foreign Direct Investment Drive Present Globalisation -The Growth of Global Value Chains and Global Linkages -The Key Role of Multinational Enterprises -Small and Medium-Sized Enterprises and Global Value Chains -The Emergence of New Centres of Economic Growth -The Industry Dimension of Globalisation Chapter 3. The Costs and Benefits of Globalisation -A Complex Discussion -Employment Effects -Productivity Effects Chapter 4. Towards a Knowledge Economy: A Challenge for All Countries -Structural Change towards a Knowledge Economy -De-Industrialisation -Moving Up the Value Chain in OECD Countries -The Challenge from Non-OECD Countries -The Inernationalisation of R&D Chapter 5. Policy Implications of Globalisation -Adjusting to Globalisation -A Balanced Perspective on the Costs and Benefits of Globalisation -Accommodating Structural Change: Spreading the Benefits of Globalisation -Avoiding Policies that Distort the Process of Structural Change -Moving Up the Value Chain: Developing a Strategy for Innovation -New Approaches to Moving Up the Value Chainoe Annex A. R&D Intensity for Aggregate of 12 OECD Countries, 1991-1999