The value wedge: developing countries’ share of world production and world GDP
Where does value lie in the production chain?
Business strategies: developing country firms Emergence of new niches ‘Upstream’: innovation ‘Downstream’: variety, distinctive characteristics Partnerships between SMEs
MNC strategies: Choice of routes to globalised production
Ways to add value: typical progression
Is China gaining value upstream through R&D?
Garments case study
The China syndrome… Productive, relatively low cost workforce High volume production - domestic market Vertical integration Full package service Speed to market
Other strategies for adding value Fabric innovation/design eg Star Knitwear, Mauritius - access to Worth Global Style Network (fashion intelligence website) Handcrafting eg major UK retailer sourcing from homeworkers in India - digital cameras, , mobile phone texts Market niches eg Phenix Logistics, Uganda selling organic cotton t-shirts in Europe - no ICT but 50% price premium!
Star’s Kate Moss success
Policy framework: focus on competitiveness What are the opportunities? What are the country’s capabilities? Existing ICT and other infrastructure Human skills Institutional strengths/weaknesses: government, business, consumers What policies most effectively match capabilities and opportunities? Taking account of interactions in the economy - non-obvious policy choices!