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OECD (2007): Staying Competitive in the Global Economy
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Staying Competitive in the Global Economy
Moving up the Value Chain
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Globalisation raises many important challenges and is high on the policy agenda in many OECD countries. At the 2004 Ministerial Council Meeting, Ministers asked the OECD to shed light on issues related to the increased outsourcing and offshoring of production, since solid evidence to underpin policy discussion and formulation was scarce.

To help implement this mandate, the OECD Council decided at the end of 2004 on an allocation of the OECD′s Central Priority Fund for a study including a systematic empirical overview of trends and developments on the globalisation of value chains.

This volume brings together some of the evidence on the globalisation of value chains and identifies the most relevant policy issues in order to address concerns relating to globalisation. It has served as the basis for a report on main findings to the OECD 2007 Ministerial Council Meeting. A separate report, compiling the individual studies underlying this synthesis, will be finalised later this year.

Executive Summary 7
Chapter 1. The Challenge of Globalisation 13
Introduction . 14
The globalisation of value chains 16
Outline of the report 21

Chapter 2. The Growth of Global Value Chains 25
Trade and foreign direct investment drive present globalisation 26
The growth of global value chains and global linkages 31
The key role of multinational enterprises 37
Small and medium-sized enterprises and global value chains 39
The emergence of new centres of economic growth. 41
The industry dimension of globalisation. 47
Chapter 3. The Costs and Benefits of Globalisation. 59
A complex discussion 60
Employment effects. 63
Productivity effects . 74
Chapter 4. Towards a Knowledge Economy: A Challenge for All Countries 89
Structural change towards a knowledge economy 90
De-industrialisation . 92
Moving up the value chain in OECD countries 98
The challenge from non-OECD countries. 104
The internationalisation of R&D. 110
Chapter 5. Policy Implications of Globalisation . 117
Adjusting to globalisation . 118
A balanced perspective on the costs and benefits of globalisation 118
Accommodating structural change: spreading the benefits of globalisation. 119
Avoiding policies that distort the process of structural change. 119
Moving up the value chain: developing a strategy for innovation 120
New approaches to moving up the value chain? . . 123
Annex A . 125

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