Global Value Chains determine the dynamics of industrialization; countries trade

capabilities rather than merely trade products; and industrial development is about
creating, developing, and promoting linkages. It argued that together, these core
concepts encapsulate an industrial development path. Indeed, the emergence of GVCs
has changed the game of how countries can industrialize. Policies not informed by
GVCs will fail. Integration into the global economy provides potential for productivity
growth, learning, and sustained growth; but these benefits do not arise automatically.
Countries will need to engage in globalization in a way that they can capture,
appropriate, and protect rents – through continuous upgrading – whether be it in
vertically specialized value chains, such as in manufacturing, or in additive value chains,
as exemplified by the resources sector. There are two paths to industrialization. The first
path is the classic labor-based manufacturing, as exemplified by the apparel sector.
This sector has low entry barriers in terms of fixed costs, it is labor intensive and so
provides much needed employment, and it has spill-over benefits to other sectors.
Although highly competitive globally, Other countries can still optimize on preferential
access to large markets, create beneficial agreements with emerging markets, and
create regional blocs which will offer lower entry requirements, learning opportunities,
upgrading opportunities, and diversified markets. Policy needs to move with speed, in
the face of falling trade barriers and ever increasing competition. The resources sector
as a basis for industrialization is another path other countries must have on its agenda.
Despite the current low commodity prices. Other emerging economies will also need
resources during this coming deployment period. Perhaps right now it is not about
making the most of the commodity boom, but it certainly is about making the most of
GVCs, particularly developing linkages in the sector. Overall, GVCs carry enormous
implication not just for industrialization, but for wealth distribution globally. The shift of
activity to the South means that this part of the world is increasingly favored to make the
most of GVCs, and there is no reason why other countries should not rise to the
opportunity and become part of the story in a meaningful way – to not remain locked up
in low-rent, commodity-exporting tiers, but to move up the chains, building on core
competencies, industrializing and sustaining income growth. It is about making the most
of how the world works (GVCs), by making the most of what you have cheap like labor
and resources.