Forum on Globalization and Industrialization

The Future of Global Value Chains - How the Fourth Industrial Revolution is Changing Global Production Networks

19 Nov 2019

The expansion of global value chains (GVCs) in the past several decades has transformed the world economy. For many countries, especially in the developing world, integration into GVCs drove economic growth and job creation. Such potential is being challenged by technological transformations happening at the frontier, although it is early to claim that we are in a new revolution. Oft-cited arguments include the notion that robots will replace workers in the factories so that manufacturing may not any longer be the job creation engine it used to be. At the same time, skills and capabilities needed in newly emerging jobs connected to these productivity-enhancing new technologies are expected to be considerably more complex and scarce, particularly so in developing countries. Yet, the new technological advancements in the production do not necessarily spell doom for the developing countries which until now largely depended on the outsourcing of labour by multinational companies from advanced economies. In fact, in the age of smart factories, new technology-enabled business models are emerging that may present developing countries with opportunities for learning and leapfrogging. These issues are the core of future policymaking on GVCs and their contribution towards achieving inclusive and sustainable industrial development.

The 2019 Forum on Globalization and Industrialization (FGI) aims to bring together policymakers, representatives from international organizations, academia and business to discuss the challenges and opportunities of technological shifts for GVCs to drive inclusive and sustainable development. It is the fourth edition in a series of annual forums jointly organized by UNIDO and the Kiel Institute for the World Economy since 2016 to focus specifically on issues related to global production, trade and investment.

The 2019 FGI aims to support evidence-based policymaking at the international level and is expected to enrich discussions and exchange of ideas, leading to better policies, development practices and research in the subject area.

Session 1

The Future of GVCs: The Fourth Industrial Revolution and Its Implications for the International Division of Labour
The first plenary considers the possible impact of technological change (commonly referred to as Industry 4.0) on the configuration of global investment and trade flows in the context of GVCs. The introduction of advanced production technologies and increased digitalization may lead to a slowdown in ‘offshoring’ and possible increase in ‘backshoring’ of production towards industrialized economies. The session seeks to discuss broad implications for the extent and nature of GVCs.

Keynote: “The Future of Industrialization: IDR 2020 - Findings and Policy Implications"

Session 2

Should We Talk About a Revolution? Insights from Frontier Industries  
The second plenary provides industry-specific insights on the adoption and feasibility of new technologies, from the perspectives of business practitioners. The session examines how factors such as industry dynamics and production characteristics potentially explain the use and spread of new technologies for different types of GVCs at present and in the future.

Session 3

Is There a Need for an Industrial Policy 4.0? Examining the Future of Policymaking
The third plenary discusses the extent to which GVCs will continue to serve as a driver of industrial development in view of rapid technological shifts. In relation to this, the session will explore old and new industrial policy options that are required for countries to reap the benefits of GVCs.

Special Session

Infrastructure Development for GVC Integration: Looking Across and Looking Ahead  
This special session presents findings from a recent report published by the National Development and Reform Commission of China in cooperation with UNIDO, on the role of infrastructure development in facilitating international trade and production. The session also explores the extent to which infrastructure requirements may change in response to reconfigured GVCs as a result of technological shifts.

Vienna International Centre, Austria.