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Four policy approaches to support job creation through Global Value Chains

Ruchira Kumar's picture
 Maria Fleischmann / World Bank

Mexico created over 60,000 jobs between 1993 to 2000 upgrading the apparel value chain from assembly to direct distribution to customers.  (Photo: Maria Fleischmann / World Bank)

As we discussed in our previous post, Global Value Chains can lead to the creation of more, inclusive and better jobs. GVCs can be a win-win for firms that create better jobs while they enjoy greater efficiency, productivity, and profits. However, there is a potential trade-off between increasing competitiveness and job creation, and the exact nature of positive labor market outcomes depends on several parameters. Given the cross-border (and, therefore, multiple jurisdictive) nature of GVCs, national policy choices to strengthen positive labor outcomes are limited. However, national governments can make policy decisions to facilitate GVC participation that is commensurate with positive labor market outcomes.

Global Value Chains: a way to create more, better and inclusive jobs

Ruchira Kumar's picture
Photo by Jonathan Ernst / World Bank

Global Value Chains are a win-win for firms that enjoy greater efficiency, productivity, and profits while they create better jobs (Photo by Jonathan Ernst / World Bank)
 
Global Value Chains (GVC) are significant vehicles of job creation, employing around 17 million people worldwide and carrying a share of 60 percent of global trade. As globalization increases, GVCs are becoming more relevant in international production, trade, and investments. And Global Value Chains also have an important effect on job creation, and these jobs usually have higher wages and better working conditions. Global Value Chains can become a win-win for firms, which enjoy greater efficiency, productivity, and profits while they create better jobs. Here are some revealing facts about the potential of GVCs to create more and better jobs.

The care economy: A powerful entry point for increasing female employment

Eliana Carranza's picture
The burden of childcare and elderly care falls disproportionately on women

Access to affordable childcare is critical to increase female labor participation because the burden of childcare and elderly care falls disproportionately on women. Photo: Rama George-Alleyne / World Bank

Promoting female labor force participation and the quality of women’s employment was one of the main topics of the latest G20 Ministers of Labor meeting, as we explained in this blog. The solutions to reducing labor gender gaps across the world lie in many corners, but a well-functioning care economy is especially crucial. Nowadays, the burden of childcare and elderly care almost always falls disproportionately on women: Married women spend 14 to 42 percent of their non-leisure time on childcare, compared with 1 to 20 percent for married men. And changing demographics, aging societies, and declining fertility rates also make the burden of elderly care a growing challenge.

Three policies to promote a more inclusive future of work

Luc Christiaensen's picture
 Arne Hoel/World Bank
Even if the technologies are available, businesses and individuals often lack the necessary skills to use them. And these skill gaps exist at multiple levels. 
(Photo: Arne Hoel/World Bank)

As we explained in previous posts, digital technologies present both threats and opportunities for the employment agenda in developing countries. Yet many countries lack the means to take full advantage of these opportunities, because of limited access to technology, a lack of skills, and the absence of a broad enabling environment, the so-called “analog” complements.


The Future of Work: The number of jobs is not the only thing at stake

Siddhartha Raja's picture
Photo of computer lab. Technology is a great job-creating machine. But will these new jobs be better or worse?
Technology is a great job-creating machine. But will these new jobs be better or worse? (Photo: John Hogg / World Bank)

Most of the discussion about the future of work focuses on how many jobs robots will take from humans. But this is just a (small) part of the change to come. As we explained in our previous blog, technology is reshaping the world of work not only by automating production but also by facilitating connectivity and innovation. The changes that digital technology is introducing in the price of capital versus labor, the costs of transacting, the economies of scale, and the speed of innovation bring significant effects in three dimensions: the quantity, the quality, and the distribution of jobs. Let’s see them in detail.

Can technology reshape the world of work for developing countries?

Luc Christiaensen's picture
 
 Sarah Farhat / World Bank
Automation, connectivity, and innovation will together determine how world of work will look in both developed and developing countries.​ (Photo: Sarah Farhat / World Bank)

The Future of Work was not only the first topic of this year’s G20 Labor and Employment Ministerial Meeting, it's also white hot in today’s blogosphere. Yet most pieces portray a developed world perspective with an emphasis on robots, and how they are taking the jobs away, and skills development as the key policy response. But what does the rapid technological change mean for global poverty and inequality? How does it affect the world of work in developing countries?

A perspective on jobs from the G20

Luc Christiaensen's picture
Factory workers in Ghana
When talking about the Future of Work, it is important to go beyond discussing robots and changes in employer-worker relationships; these might not be the primary labor market problem that low-income countries face. (Photo: Dominic Chavez/World Bank)

On May 18-19, the G20 Ministers of Labor met in Bad Neuenahr, Germany to discuss and adopt their annual Labor and Employment Ministerial Meeting (LEMM) Declaration advocating for "an integrated set of policies that places people and jobs at center stage." In this, the meeting did not shy away from some of the more thorny issues to reach the overarching goal of fostering "inclusive growth and a global economy that works for everyone." It focused on the much-feared future-of-work, the longstanding challenge of more and better employment for women, better integration of recognized migrants and refugees in domestic labor markets, and ensuring decent work in the international supply chains.  

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.

Digital News Report 2016
Reuters Institute for the Study of Journalism

This year we have evidence of the growth of distributed (offsite) news consumption, a sharpening move to mobile and we can reveal the full extent of ad-blocking worldwide. These three trends in combination are putting further severe pressure on the business models of both traditional publishers and new digital-born players – as well as changing the way in which news is packaged and distributed. Across our 26 countries, we see a common picture of job losses, cost-cutting, and missed targets as falling print revenues combine with the brutal economics of digital in a perfect storm. Almost everywhere we see the further adoption of online platforms and devices for news – largely as a supplement to broadcast but often at the expense of print.

Food Security and the Data Revolution: Mobile Monitoring on the Humanitarian Frontline
Advanced Training Program on Humanitarian Action, Harvard Humanitarian Initiative

Obtaining real-time and actionable information on the needs of affected populations has long been a priority for humanitarians; so keeping up with new technologies that could improve existing data collection systems is also a necessity. Innovations such as mobile phones and the Internet have already profoundly changed the nature of humanitarian work. They are proving to be faster and cheaper than legacy information systems, increasing the amount of information that decision makers have, and ultimately enabling them to save more lives. However, what is truly transformative is their potential to reach previously ‘invisible’ populations.
 

How can we build tax capacity in developing countries?

Jim Brumby's picture
Well-functioning tax systems allow countries to chart their own futures and pay for essential services such as education and healthcare.
(Photo: Curt Carnemark / World Bank)

This week, the World Bank, together with the International Monetary Fund, the Organisation for Co-Operation and Development, and the United Nations, submitted recommendations to the G20 on how we can best work to strengthen the capacity of our client countries to build fair, efficient tax systems. Responding to a request the G20 made in February, and working as the recently-formed Platform for Collaboration on Tax, we dug deep into our collective years of policy-setting, technical advice, and on-the-ground experience to arrive at guidance for providing assistance and suggestions for funding that work. In short, we looked at how best we could help.

The recommendations in our report, “Enhancing the Effectiveness of External Support in Building Tax Capacity in Developing Countries,” present an ambitious agenda for development partners to support developing nations to strengthen their tax systems and realize their development objectives, as well as strive for achievement of the Sustainable Development Goals.

How can we better help governments to help citizens? Seeking feedback on best practices in building tax capacity

Jim Brumby's picture

In April, the World Bank Group joined forces with the International Monetary Fund (IMF), the Organisation for Co-Operation and Development (OECD), and the United Nations (UN) to form the Platform for Collaboration on Tax with the aim of providing better coordination and support to developing countries on tax matters. Among the responsibilities of this new group are to formalize regular discussions among our organizations on standards for international tax issues, strengthen our capacity-building support, deliver joint guidance, and share information on our ongoing work.
 
To that end, we have produced a short guidance note that we expect to present to the G20 in July: “Report on Effective Capacity Building on Tax Matters in Developing Countries”. In preparing this note, our experts have compiled research, reached into their extensive experience on the ground, and incorporated comments from country-level practitioners at a number of meetings – in Tanzania, South Korea, and Washington, D.C. – that were designed to highlight the developing-country perspective. But we know there is more to learn, and before we finalize this note, we would like to hear from you, whether you are a representative from a civil society organization, a tax official, or a citizen who is interested in how your government sets and collects taxes.
 
Deadline: July 8
Where to send feedback: GlobalTaxPlatform@worldbank.org
Next steps: Keep your eye on this space. While we are setting a short deadline for this particular project, we hope to keep the conversation going, and will engage with you on many of the initiatives we have planned.


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