Making sense of global production chains

“Global retailers, brands and manufacturers who have outsourced their production have turned economics on its head”, says Professor Gary Gereffi, one of the experts that will gather in Geneva on 7-9 July for a meeting on Measuring Global Production hosted by UNECE . Leading statistical experts from all over the world will meet with economists and researchers to unravel the increasingly complex forms of global production to better measure economic development.

Economic globalization keeps taking new forms – firms are becoming more and more agile: some only provide the intellectual property, like software, blue prints and design, while production is carried out by contracted producers. Firms may undertake R&D, while components and raw materials may arrive from various other countries to be assembled in yet another country. Finally, products may be sold to customers all over the world. Even more complex arrangements are emerging in the area of services. The complexity is amplified by the search for tax optimization and complicated ownership arrangements which are key features in globalization.

Understanding the impacts of globalization requires good data, which are becoming increasingly difficult to produce. According to Professor Paul Dembinski, another invited speaker for the Expert Meeting: “Globalization is a planetary process - yet most statistics are domestic. Any proper frame for globalization must move beyond the purely domestic viewpoint and see things at least in regional, if not global, terms.” Therefore, allocating global activities into national statistics can no longer be done country by country in isolation. Instead, statisticians need to agree internationally on how to treat the different aspects of globalisation in order to arrive at national measures that make sense and are internationally comparable.

For many years UNECE Statistics Division has been trying to facilitate this process and help countries in measuring complex globalization aspects.  A Guide to Measuring Global Production was just endorsed by the Conference of European Statisticians on 16 June 2015 and will be published soon. Now the guidance needs to be put in practice, and at the same time new challenges emerge, which require further conceptual work. A step forward will be to put in practice this guidance as well as to tackle the new emerging challenges. This is the key goal of the Expert Meeting that UNECE organizes together with Eurostat and OECD: we invite statistical experts to talk to data users, policy makers, business associations, and researchers and agree on future steps.