Global value chains can be the world’s engine for development if they are shaped to be inclusive and sustainable, concluded participants of a conference organized by the United Nations Industrial Development Organization (UNIDO) and the Kiel Center for Globalization of the Kiel Institute for the World Economy.
Policymakers, academics and representatives of international organizations and the private sector gathered in Kiel, Germany, to explore the future of Global value chains (GVCs). In particular, the participants explored the measures and policies that need to be put in place to make them more inclusive and sustainable, as well as the opportunities and challenges brought by digitalization.
"With the digital age, the nature of GVCs changes and the distinction between goods and services is being blurred," said Kiel Institute’s President, Dennis J. Snower. “As machines take more and more routine work, one will expect a change in the allocation of production and of work along GVCs. The people who depend on GVCs will also be affected in all parts of the world.”
This is going to be the case in particular for developing countries, participants argued. They agreed on the importance of further integrating developing countries in GVCs in order for them to be able to benefit from technological change. A country’s technological level or its ability and willingness to introduce new technologies also impact its attractiveness to foreign direct investment (FDI). “Making GVCs and FDI work for development in different country contexts requires tailored strategies and policies,” said the World Bank’s Deborah Winkler.
The importance of UNIDO in helping develop, introduce and implement policies and standard across the globe was further discussed during the event. “Knowledge sharing, policy advice and technical support are key towards making GVCs more inclusive and sustainable,” said UNIDO’s Gerardo Patacconi. “UNIDO, with the mandate of promoting inclusive and sustainable industrial development, is well positioned to support countries in this transition and can foster partnerships that have the potential for fast-tracking the process.”
The participants expressed their appreciation of the format of the event that brought together key actors from the field – from research to policy development and implementation – to make real progress on the issue. Looking forward to next year’s event, they also pointed to the need for more intellectual debates on GVCs linking policy with evidence research.
Daniela Zehentner-Capell from Germany’s Federal Ministry for economic Development and Cooperation (BMZ) highlighted the uniqueness of the partnership between UNIDO and the Kiel Institute for making intellectual progress on how to make GVCs more inclusive and sustainable.
Check out the livestream from the Opening of the Conference, as well as the first two panels here.