Glo-Outsourcing

Topics: Value added, Gross domestic product, Value Pages: 41 (12894 words) Published: January 25, 2013
Direct Measurement of Global Value Chains: Collecting Product- and Firm-Level Statistics on Value Added and Business Function Outsourcing and Offshoring Timothy J. Sturgeon, MIT* Peter Bøegh Nielsen, Statistics Denmark Greg Linden, UC Berkeley Gary Gereffi, Duke University Clair Brown, UC Berkeley Final Draft: April 2, 2012 Forthcoming as Chapter 9 in the World Bank volume: The Fragmentation of Global Production and Trade in Value-Added - Developing New Measures of Cross Border Trade, based om a Trade Workshop held at World Bank Headquarters, June 9-10, 2011 INTRODUCTION:

 WHY
 NEW
 FIRM-­‐LEVEL
 STATISTICS
 ON
 VALUE
 ADDED
 AND
 INTERNATIONAL
 SOURCING
 ARE
 NEEDED
 NOW
 ....
 1
  PRODUCT-­‐LEVEL
 GVC
 STUDIES
 ..........................................................................................................................  3
  BUSINESS
 FUNCTION
 SURVEYS
 ...........................................................................................................................  8
  Business
 function
 lists
 .............................................................................................................................................  9
  The
 Eurostat
 International
 Sourcing
 Survey
 ..........................................................................................................  11
  The
 relationship
 between
 international
 sourcing
 and
 employment
 .....................................................................  13
  The
 2011
 National
 Organizations
 Survey
 ..............................................................................................................  15
  CONCLUSIONS
 ..............................................................................................................................................  22
  REFERENCES
 ................................................................................................................................................  23
 

 

 

Abstract: Global value chains (GVCs) have changed the assumptions behind current data regimes and statistical systems are struggling to catch up. In this chapter, we confront the obvious. It will be exceedingly difficult to fill the data gaps caused by global economic integration without new data. While collecting new data on a globally harmonized basis – for this is what’s needed – is a daunting task, we need to begin. The solution will inevitably include new “bottom-up” business surveys to complement the “top down” efforts of international input-output surveys. This chapter outlines two such efforts: product-level GVC studies and business function surveys. The most direct way to measure the geography of value added is to decompose individual goods and services into their component parts and trace the value added of each stage of production to its source. The procedure yields product-level estimates that identify the largest beneficiaries in terms of value added, value capture (i.e., profits), and employment. However, value added cannot be fully determined by tallying up the physical inputs to products listed as outputs. A range of largely intangible “support” functions (e.g., R&D, sales, marketing, IT systems, etc.) also add value, and like production, these support functions are available from suppliers and service providers outside the firm and in a variety of locations around the world. We argue that these trends require a new statistical unit of analysis to supplement the main activity/industry of the firm – i.e., the business function – and new surveys to capture how and where they are sourced and to quantify their value. The results of two recent business function surveys are presented. * Corresponding author: sturgeon@mit.edu

Introduction: why new firm-level statistics on value added...

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