Syndicate content

Slovenia

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.

Middle class jobs are thriving in Central and Eastern Europe

Roma Keister's picture
Photo: Tomislav Georgiev / World Bank

Exponential increases in automation, computerization and digitization is having a profound impact on many people’s jobs. Branko Milanovic’s recent work on global inequality has shown extent to which the lower-middle class jobs in developed countries are being replaced by technology. In particular, economists argue that middle-skilled, routine-intensive jobs are being hollowed-out. And indeed, in Western European countries and the US there has been a decrease in the intensity of routine tasks – both manual and cognitive. However, in Central and Eastern European (CEE) countries, the amount of routine cognitive work has been on the rise. And the pay for these workers has increased faster than for high skilled workers. Why is this happening, when in the most advanced economies the opposite is happening?