Global Value Chain Development Report 2019

Technological Innovation, Supply Chain Trade, and Workers in a Globalized World

image of Global Value Chain Development Report 2019

This report takes stock of the evolution of global value chains (GVCs) in light of technological developments, such as robotics, big data and the Internet of Things. It discusses how these technologies are reshaping GVCs and examines the effect of these changes on labor markets in developed and developing economies and on supply chain management. The report discusses how technological developments are creating new opportunities for the participation of small and medium-sized enterprises in global value chains and reviews issues related to GVC measurement. The report is a follow-up to the first Global Value Chain Development Report, which revealed the changing nature of international trade when analyzed in terms of value chains and value-added trade.



Understanding Supply Chain 4.0 and its potential impact on global value chains

The reorganization of supply chains using advanced technologies, such as the Internet of Things (IoT), big data analytics, and autonomous robotics, is transforming the model of supply chain management from a linear one, in which instructions flow from supplier to producer to distributor to consumer, and back, to a more integrated model in which information flows in an omnidirectional manner to the supply chain. While e-commerce is uniquely suited to many of these techniques, they also hold the promise of improving efficiency in brick-and-mortar stores. These technologies are generating enormous benefits through reducing costs, making production more responsive to consumer demand, boosting employment (employment in supply chain sectors where such technologies are most likely to be applied has grown much more rapidly than in other supply chain sectors and in the economy as a whole) and saving consumers’ time. The impact of these technologies on the length of supply chains is uncertain: they may reduce the length of supply chains by encouraging the reshoring of manufacturing production to high-income economies, thus reducing opportunities for developing countries to participate in GVCs, or they may strengthen GVCs by reducing coordination and matching costs.


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