Global value chain (GVC) studies on the aerospace, automotive and auto parts, chemicals, electronics and electrical machinery, and paper industries will be presented to various stakeholders through a public forum on June 2, 2016 at the Makati Diamond Residences.
GVCs consist of the process of producing goods from raw materials to finished products, wherever in the world the necessary skills and materials are available at competitive cost and quality. For example, Macbooks, iPhones and iPads are designed in the United States, but are assembled in China, with some parts coming from Japan, Germany, France, and Korea, among others.
Conducted by the Duke University Center on Globalization, Governance, & Competitiveness (Duke CGGC), the five studies were commissioned under the Science, Technology, Research, and Innovation for Development (STRIDE) Program and the Advancing Philippine Competitiveness (COMPETE) Project of the United States Agency for International Development (USAID) for the Philippine Board of Invetments (BOI), the industry development and investments promotion arm of the Department of Trade & Industry (DTI). The GVC studies are intended to assist the BOI in its efforts to further develop its framework and strategies in promoting industries built on best practices.
“The findings of the studies carried out by the Duke CGGC are important in formulating policies and programs on how firms, SMEs in particular, can participate in GVCs and, for those that are already participating, how to upgrade and move up the value chain. The research studies provide evidence which serve as basis to improve our industry development strategies towards a more globally competitive Philippine manufacturing industry,” said DTI Assistant Secretary for Industry Development Rafaelita Aldaba.
The Philippine new industrial policy as contained in the Comprehensive National Industrial Strategy (CNIS), the country’s blueprint for linking the manufacturing, agriculture, and services sectors, aims to improve the country’s competitiveness by upgrading the productivity of its industries and removing the binding constraints to their development.
Under this policy, the government acts as enabler of the private sector, which is the proximate engine of growth, and serves as facilitator of initiatives that will create the proper environment for private sector development. The new industrial policy is cluster-based and GVC-focused and intends to build strong regional economies in the country and focus government efforts in integrating local industries into regional production networks and enabling SMEs to move up their GVCs.
The GVC studies particularly focus on how the mentioned industries can reinforce forward and backward linkages. The analyses cover the structure of each industry’s value chain—from inputs, technologies, processes through distribution and marketing—at the global level, and indicates where the Philippines currently fits within these GVCs. It explores the global competitive environment for these value chains, and how the Philippines compares relative to its competitors.
The GVC studies also analyze the most binding contraints preventing Philippine firms from moving up the industry GVCs, and recommend strategies for value chain upgrading and improving competitiveness, as well as the needed investments, human resource requirements, and the roles of government and industry stakeholders in implementing these.
Duke CGGC is a university-based research center that undertakes client-sponsored research that addresses economic and social development issues for governments and international organizations. This is principally done by utilizing the GVC framework, created by Founding Director Professor Gary Gereffi, to study the effects of globalization on industrial upgrading, international competitiveness, and innovation in the global knowledge economy.