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Perspectives on the Future of Globalisation: How can official statistics keep up with changing global value chains? | The Global Foresight Group

Perspectives on the Future of Globalisation: How can official statistics keep up with changing global value chains?

By Ricardo Borges de Castro and Kristel Van der Elst

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This article was published on the Huffington Post website. Click here to view it.

The tide of popular opinion seems to be turning against globalisation, as many in Europe and the United States perceive that gains from trade and investment in recent decades have not been fairly distributed. Ignoring these concerns is at our peril: on the road to inclusive growth and social empowerment, there is still a long way left to travel.

We know that the global circulation of goods, services, money, people and ideas is making the world wealthier, healthier and more educated than ever before. So how can we address concerns about globalisation while continuing to harness its benefits?

We need evidence-based policy making, which relies on credible, timely and comprehensive data. Providing such data to inform policy development will require official statistics agencies to stay abreast of the changing nature of global value chains, with a particular focus on future evolutions in seven areas.

1. More localised production

In the future, production is likely to occur closer to consumption. This is driven by factors such as automation making production less labour-intensive and advances in techniques such as additive manufacturing. Demand will grow for products that are more individualised or customised, as well as for faster delivery.

2. Geo-political and economic uncertainty

The rise of protectionism and economic nationalism will further impact this. The future configuration of global value chains is sure to be affected by trends in insecurity and conflict, the use of economic tools to settle geopolitical disputes, the growing importance of state capitalism in some corners of the world, and eroding strategic trust among world powers.

3. SMEs vs big business

The future evolution of technology could plausibly lead to a business ecosystem heavily populated by SMEs, start-ups and self-employed workers. Alternatively, we could see greater consolidation and even monopolisation of business activities: large organisations can invest more in technology infrastructure; they have greater access to data, which they can use to optimise production systems and improve products and services; and, as their value chains become more networked, they may be reluctant to transmit ‘business secrets’ to outsiders. We will need better official statistics on smaller economic structures to understand how the structure of our economies is evolving.

4. New products and services

New categories of products and services will emerge along existing global value chains, and statistical offices will need to keep abreast of them and understand how to accommodate them in their measurements and analysis of value creation. Significant examples are likely to include more trade in ‘digital product templates’ for local 3D-printing, as opposed to physical products themselves; and Uber-like sharing models reaching more parts of the economy, such as manufacturers leasing time in factories rather than owning them outright.

5. E-commerce will keep increasing

E-commerce is here to stay, and will only become more generalised as consumers use mobile devices more frequently to buy online. But there is surprisingly little evidence about its global implications. Official statistics will need to find better ways to collect data about the buying and selling of goods and services, and the transmission of funds and data, over electronic networks.

6. Availability of more real-time data

As they become more highly networked, global value chains will produce massive amounts of data, creating more transparency and flexibility for the actors involved. This opens potential opportunities for official statistics agencies to collect more data, in a more timely way.

7. Decreasing trust in governments

However, given decreasing levels of trust in governments, any proposals to make more business data accessible to national and European statistical offices could be controversial. With different governmental agencies increasingly connecting their data systems, companies and individuals will worry that data provided for statistical purposes might end up being used for other purposes, such as taxation. Collecting more data to inform better policy development will require safeguards about how that data will be used.

[1] Note on the authors: Ricardo Borges de Castro is Adviser on Strategic Foresight at the European Political Strategy Centre / European Commission

[2] Note: This contribution aims to underpin forward-looking policy-making by highlighting trends that impact the development of the evidence base on the nature and geography of value chains, as discussed in the “Power from Statistics – Round Table on Globalisation” meeting organized by Eurostat. It is not the outcome of a specific analysis, or intended to be a comprehensive study on all plausible future evolutions in globalisation and trends impacting global value chain assessment. The views expressed are those of the authors and do not necessarily correspond to those of the European Commission.


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