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February 2016

Picture Trade: To Understand GVCs, Connect the Dots

Gianluca Santoni's picture
The increasing salience of global value chains and their analysis has created tremendous demand for “mapping” these chains. How can we quantify the ‘value’ along a chain? How can we visualize the connections between each link?

These are questions we’ve been seeking to answer at the World Bank Group. And we’ve developed a new visualization tool, accessible through our World Integrated Trade Solution database, which allows the public to explore the quantifiable reality of GVCs.

To give you an example of how it works, let’s look at the automotive sector—a very prominent and commonly discussed GVC.

Sturgeon and Memedovic developed a methodology to break down the automotive production chain into final goods—those purchased by the consumer—and intermediate goods—those purchased by other manufacturers as inputs to be used in their own production. They identify three main GVC ‘nodes’: Automotive components (made by suppliers); engines, transmissions, and body assemblies (made by automakers); and finished motor vehicles. Table 1 shows the main exporting country within each of these nodes and its relative market share within that node.
 
Table 1: Main exporter by automotive GVC node, 2014
Main exporter by automotive GVC node, 2014

Table 2 goes one step further. By digging into the trade data, we can identify the most important products for each GVC node, in terms of their relative weight on world trade. This also helps us, in part, to identify which products or activities along the production chain are most significant or add the most value.
 
Table 2: Most traded product by automotive GVC node, 2014
Most traded product by automotive GVC node, 2014

Perhaps not surprisingly, the most exchanged automotive input ‘made by suppliers’ in 2014 falls under the classification HS870899—‘parts and accessories.’ Now, to better understand exactly how these parts and accessories move along the GVC, we can use our Global Trade Network tool on WITS to map all of the bilateral trade flows for HS870899. [1]
 
Figure 1: Global Trade Network visualization for HS870899 - Supplier perspective, 2014
Global Trade Network visualization for HS870899 - Supplier perspective, 2014

What’s your strategy for innovation labs?

Adarsh Desai's picture
Innovation is a hot topic these days. Not just in the private sector, but also increasingly in the public sector. When the World Bank created its Innovation Labs about five years ago, we were one of the few development institutions to do so. Since then innovation units within other international development institutions, foundations, and aid agencies have slowly emerged. This is a welcome trend, as it indicates the acceptance by development institutions that innovation is important to meet many of the new Sustainable Development Goals.

Conflict of interest: Global internet privacy trends

Roxanne Bauer's picture
The internet, and mobile internet in particular, continue to expand across the developed and developing world – on a scale which is too large and diffuse to control. While this brings greater connectivity to large masses of people, it also has serious implications for the security and privacy of personal data.
 
Companies increasingly use cloud based services and operate across national boundaries, with servers in multiple national jurisdictions. This is because users want to be able to access their data from any device, which effectively requires data and applications to be housed on a cloud-based server. The rise of mobile devices has further exacerbated consumer demand for cloud connectivity.  Moreover, privacy laws vary significantly across different national jurisdictions; global companies often receive information in one country and then process it in a different country with a different regulatory framework. Thus, in a globalized world it becomes ever more challenging to ensure standards of privacy are upheld.
 
Concurrently, national governments seek to obtain and exploit the personal information stored on servers and personal devices for purposes of national security. At times, they compel companies to release personal data. It’s also interesting—and perhaps frightening— that open source intelligence statistical techniques are able to collect, correlate and triangulate data to identify previously anonymous information.

Claire Connelly, a journalist specialising in privacy and technology, from Sydney, Australia outlines some of the key global trends she sees unfolding around the world.
 
Conflict of interest: Global Internet Privacy Trends

Solving payments interoperability for universal financial access

Massimo Cirasino's picture


Interoperability was a trending topic at this week’s Mobile World Congress (MWC) 2016.

Payments are often the first and most used financial service.

Getting payment products to “understand” each other, or to be “interoperable,” is a big challenge to solve if we want to expand overall digital services and financially include the 2 billion people worldwide who are currently excluded from the formal financial system.

Making it easy for people to access transaction accounts and payment services matters.

We see interoperability as a means for people worldwide to make electronic payments in a convenient, affordable, fast, seamless and secure way through a transaction account.

When payment systems are interoperable, they allow two or more proprietary platforms or even different products to interact seamlessly.  Interoperability can promote competition, reduce fixed costs and enable economies of scale that help ensure the financial viability of the service and make payment services more convenient.  

10 tips for implementing a public to public partnership (P2P)

Malcolm Morley's picture

In my last post, I proposed that economic and social value from Public Private Partnerships (PPPs) can be improved significantly if the public sector can identify and exploit the potential to create Public to Public Partnerships (P2Ps). I believe that P2Ps can use their combined scale and power to challenge the private sector to deliver additionality over and above what the public sector can achieve within the timeline and resources available.  They can create an imperative for the private sector to innovate and to use their competencies, capabilities, and capacity to contribute to a PPP and in transforming the Economic and Social Value Equation.  Additionality in PPPs needs to be more than what the public sector alone can achieve.
 
Because many public sector organizations are still at the early stages of looking at P2Ps, I’ve compiled a series of suggestions based upon experience that interested individuals can use to explore P2P development.  Public sector managers need to assess if it’s the right approach for their organizations within the context of the aspirations to deliver enhancements to the Economic and Social Value Equation.

Fragility, conflict, and natural disasters – a ‘one-size fits all’ approach to resilience?

Francis Ghesquiere's picture
A partner from the EU assesses damage to an apartment building in Ukraine. Photo credit: EU

It’s a simple yet essential idea: war and disaster are linked, and these links must be examined to improve the lives of millions of people around the world.

Alarmingly, the total number of disaster events – and the economic losses associated with those events – keep increasing. This trend has been driven by population growth, urbanization, and climate change, leading to increasing economic losses of $150-$200 billion each year, up from $50 billion in the 1980s. But here is another piece of information: more than half of people impacted by natural hazards lived in fragile or conflict-affected states.

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

Redefining aid could undermine fragile nations, says UN development chief
The Guardian
The decision to redefine overseas aid to include some military spending in fragile countries will hinder international efforts to help the poorest nations and could even undermine their stability, the UN’s development chief has warned. Last week, the Organisation for Economic Co-Operation and Development (OECD) revised the rules on what can be counted as foreign aid – technically known as official development assistance (ODA) – following lobbying from the UK and other member countries. Although proponents of the new definition argue that supporting military or security forces in fragile or war-ravaged states should be seen as a development aim and paid for from the aid budget, the move has been criticised by charities who fear it will mean less money reaches the poorest countries.

Emerging, developing countries gain ground in the tech revolution
Pew Research
A new Pew Research Center survey shows that across 40 countries surveyed in 2015, a median of 67% use the internet and 43% report owning a smartphone. But one trend stands out: People in emerging and developing nations are quickly catching up to those in advanced nations in terms of access to technology. Here are five takeaways on technology use in the emerging and developing world:
 

Humanitarians working on cash transfer and remittance researchers need to work together

Kevin Savage's picture
I had the pleasure of attending a workshop organized by KNOMAD at which a cross-disciplinary group of researchers (economics, anthropology, law, health, finance) came together to consider how to strengthen the evidence base of understanding remittances to and from refugees and IDPs.

Access to finance is biggest challenge for firms in Namibia

Joshua Wimpey's picture

The private sector continues to be a critical driver of job creation and economic growth. However, several factors can undermine the private sector and, if left unaddressed, may impede development.  Through extensive face-to-face interviews with managers and owners of firms, the World Bank Group's Enterprise Surveys benchmark the business environment based on actual experiences of firms. A series of blogs, starting today, share the findings from recently analyzed surveys conducted in several countries.

The Namibia Enterprise Surveys consisted of 580 interviews with firms across three regions and three business sectors – manufacturing, retail, and other services. So what are some key highlights from the surveys?

Exports take on average 8 days to clear through customs but varies according to firm size
In 2013, it took a firm in Namibia about eight days to clear exports through customs, which is considerably more than the two days it took in 2006. Despite this increase, the average time to clear direct exports through customs is still about the same as in the upper middle income countries (8 days) and lower than the Sub-Saharan Africa regional average (10 days). Moreover, there is a wide variation across firm size. For a small firm, it takes about 17 days on average to clear exports through customs, compared to around six days for medium-sized firms and about two days for large firms.

Clearing imports, in contrast, through customs is considerably faster in Namibia (five days) than the average for upper middle income countries (11 days) and Sub-Saharan Africa average (17 days).


 


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