This report investigates the digital transformation occurring within GVCs and describes the implications those changes carry for APEC cooperation. The COVID-19 pandemic is expected to accelerate the digital transformation and bolster the digital economy as work is underway to overcome this unprecedented crisis. Under these circumstances, understanding digital transformation within GVCs is critical to surmounting the COVID-19 crisis and preparing for a post-pandemic era.
This article is related to research conducted as part of the collaboration between KIET and GVCC. The article was published in the March/April 2019 KIET Industrial Economic Review, Volume 24, Issue Number 2, p. 14-27.
Duke GVCC’s study into Pakistan’s medical devices industry was sponsored by the World Bank.
This Duke GVCC study on Pakistan’s apparel industry was sponsored by the World Bank in order to understand potential upgrading strategies to enhance the country’s competitiveness in the GVC. It begins by providing an overview of the apparel GVC to present a clear understanding of the scope of the industry, how markets are structured and how changing distribution of demand and supply destinations and lead firm organization alter structural dynamics in the chain. It then analyzes the industry within Pakistan, first detailing the country’s position in the chain by looking at its firm profile, backward linkages, product profile and end markets. The internal organization of the industry is then outlined as well as recent examples of upgrading and the factors that influence the labor environment. After assessing the country’s advantages and constraints, it provides short case studies on Vietnam and Sri Lanka’s experiences in the industry. The report concludes with potential upgrading strategies for the Pakistan in the industry.
This GVCC report first provides an overview of the offshore services GVC to present a clear understanding of the scope of the industry, how markets are structured and how changing distribution of demand and supply destinations alter structural dynamics in the chain. It then analyzes the industry within Pakistan, detailing the country’s position in the global market as well as the internal organization of the industry and the human capital status. After assessing the advantages and constraints observed in Pakistan, it looks to India and Uruguay for comparative case studies, detailing the lessons learned for Pakistan. The report concludes by outlining potential upgrading strategies to enhance the country’s competitiveness in the global market. Across the entire report, focus is placed on the opportunities than Pakistan can leverage in the export market, excluding the domestic market space.
This joint report by the GVC Center and KIET builds on recommendations from the first project to explore opportunities in technology-related services. This report: describes and defines the digital economy, provides a case study that illustrates how Industry 4.0 impacts the capital equipment GVC and provides analysis of the activities taking place in different countries including the US, China, India, Singapore and Korea. To identify entry and upgrading opportunities in this field, 28 company case studies of global information technology (IT) lead firms were completed to identify common strategies of existing global leaders.
Duke GVCC presented The Digital Economy & Global Value Chains: Implications for Korea in Seoul, Korea on December 4, 2018 at the KIET-Duke GVCC seminar on Upgrading Globalization for Innovation Growth: Expansion of Digital Companies in GVCs and its Implications. The presentation provides an overview of the results of our recent project KIET on the digital economy and GVCs.
The Duke GVC Center’s work provides decisionmakers in Asia with new language and tools to understand globalization and economic development.
The Korea Institute for Industrial Economics & Trade (KIET) commissioned the Duke University Global Value Chains Center (Duke GVCC) to analyze Korea’s participation in the global electronics and shipbuilding industries to identify broader lessons for Korea’s future ambitions for industrial transformation.
These two industries comprise 30% of exports, account for over half a million semi- and skilled jobs and a substantial share of the country’s R&D spending. They provide two distinct perspectives for Korea’s participation in GVCs. On one hand, electronics products are targeted to the consumer market, technologies are rapidly changing and profits are derived from bulk production for mass consumer markets, and control over marketing and branding. Shipbuilding, on the other hand, is very capital-intensive, ships have long life cycles, and production is highly concentrated in three countries. Korea has established a global leadership position in both industries in a select number of final product categories and key component products by continually investing in process and product upgrading coupled with strong R&D investments.
Having built its economy on a strong manufacturing base, Korea is now at a crossroads and must redefine its growth drivers for the future. Its strong commitment to process and product improvement have seen steady gains in productivity and output in the past. However, its manufacturing sector is coming under growing pressure on two fronts. In labor-intensive operations, Korea increasingly competes with lower cost countries which are building up their capabilities, particularly China and others from Asia, while, in capital- and knowledge-intensive stages of the chain, Korea is up against the world’s most advanced industrialized countries – the US, EU and Japan, which are all rapidly innovating, defining brand new industries, and ramping up new production technologies that will shape the future of manufacturing itself.
Traditional development paradigms would suggest that, to survive these challenges, Korea aim to move out of manufacturing and into services. With an underperforming services sector, this provides a somewhat pessimistic outlook for Korea’s future. It also presents policymakers with an overwhelming task as the “services” sector is broadly defined and covers a very wide range of activities, including everything from construction to finance and insurance and tourism, drawing on a wide range of skills and other capabilities and requiring a considerable transformation of the economy. The global value chain (GVC) paradigm, however, suggests that the country leverage its existing strengths in manufacturing to lead its upgrading into services, while at the same time, consolidating its leadership as a production technologies specialist. Korea has established a formidable leadership in its manufacturing chains to date based on strengths in science and technology, manufacturing and an emphasis on applied research and development (R&D). By identifying future sources of value in these manufacturing GVCs, Korea can pursue a much more targeted approach to drive the development of a stronger services sector while focusing on the highest value manufacturing segments.
This study analyzed Korea’s participation in two of its leading manufacturing sectors: electronics and shipbuilding.