Global Value Chain Analyses

May 16, 2016

A global value chain (GVC) describes production processes that have become increasingly fragmented and geographically dispersed. The rise of the GVC can be attributed to a number of factors, one being the exponential pace at which technology advanced in the twenty-first century. Sophisticated practices in Information and Communication Technology (ICT) have made it possible to dismember the value chain and perform activities in any location where costs are low. Because value chains are increasingly characterised by closely integrated activities of firms and daily routine management, it means that workers and firms located across different regions affect each other more intensely (GVC Initiative).

The global value chain analysis is a particularly useful way of examining processes of interconnection as it seeks to understand the full range of activities undertaken by firms/workers to produce saleable goods. Each activity is examined in its entirety in the value chain; from the products formation to its end use. Marketing, design, production and distribution are just some of the activities undertaken and considered in the value chain.

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