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. 14-21.
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.
Innovation in the electronics industry is driving major changes in manufacturing around the world. The electronics hardware global value chain, coupled with the broader information and communication technology (ICT) services industry, are perhaps the most dynamic and important industries to consider when discussing the future of global value chains and industry 4.0. We explore this dynamic through a GVC lens.
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.
This report uses the Global Value Chains (GVC) framework to analyze Korea’s participation and leadership in the electronics global value chain. As one of the most highly traded industries, it provides significant insight into how countries engage in global chains. As Korea’s major export industry, the country’s performance in the electronics GVC can provide important lessons for how Korea may be able to leverage its leadership, using Industry 4.0 trends to drive industrial transformation of its economy.
The electronics industry has been the backbone of Philippine manufacturing exports over the past decade. This report uses the global value chain framework to support the country’s efforts to expand beyond its role in semiconductor assembly and testing towards higher value products and market niches. In addition, it examines potential to leverage synergies with other manufacturing sectors in the country.
This report has six main sections. First, is an overview of the electronics and electrical (E&E) components GVC including a discussion of the key segments of the chain, the governance structure, upgrading trajectories, and workforce development. Understanding the manner in which the industry operates at a global level is essential to be able to determine how Costa Rica may be able to grow in the future. This is followed by an overview of relevant experiences from Malaysia, Israel, and Singapore to provide potential lessons for Costa Rica. The next section is an analysis of Costa Rica’s position in the E&E value chain including key challenges. The final section provides upgrading and policy recommendations.