Deriving value from the Global Value Chain (GVC) concept: an approach to regional industrial policies
The need for sustainable structural transformation in Sub-Saharan Africa (SSA) is universally accepted and has more recently been reinforced by several international organisations, various structures within regional economic communities and analytical and policy-oriented literature. A convincing and effective regional industrial policy is one of the cornerstones of the Southern African Development Community’s (SADC) regional integration strategy with member countries committing themselves to its implementation. However, minimal progress has been forthcoming on this front, as is borne out by the 2011 SADC review on this policy.
Since the turn of the century, as a reaction to the phenomenal shifts in the trends of world trade, new analytical tools have been developed to better understand these shifts and improve the quality of information for policy makers regarding the nature of sustainable industrialisation at a country, regional and international level. The framework of the ‘global value chain’ (GVC) has become pivotal to the analysis of industrial policy today. Even though much of the analysis regarding GVC has hardly been specific to regional economic communities, this brief introduction argues that the framework of such analysis can possibly be extremely ‘valuable’ in instituting industrial policies at a regional level.
This working paper begins by assessing the limited extent of present levels of industrialisation in SADC, and by introducing the relationship between industrialisation and growth, further reinforces arguments made earlier regarding the urgent need for cohesive industrial policies in the region. The second part of the contribution looks at the concept of the GVC and its possible applicability in a regional context such as SADC. The paper concludes by suggesting a ‘needs’ analysis regarding the implications of the concept of GVCs to better inform regional policy analysts as to how to begin implementing a viable regional industrial strategy.
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