Sustainable value chains
Global Value Chain (GVC)
The fragmentation of production across countries, with firms specialising in specific tasks — the structure that now accounts for roughly half of world trade.
Definition
A global value chain is a production process broken up across countries, in which firms specialise in specific tasks rather than producing a whole product. Global value chains powered the surge of international trade after 1990 and now account for almost half of all trade, though their expansion stalled after the 2008 financial crisis — the analysis at the heart of the World Bank's World Development Report 2020.
References
definition and trade share
Overview
What it means
GVC thinking reframes trade: what matters is not what a country exports but which tasks it performs and how much value it captures. Participation brought productivity gains and poverty reduction to many developing countries, but benefits are uneven — lead firms capture design and branding value while suppliers bear cost pressure, with direct consequences for wages, working conditions, and environmental standards.
How it is used
The framework underpins trade and industrial policy, supply-chain due diligence, and analysis of how sustainability requirements propagate from buyers to producers; it evolved from global commodity chain analysis and coexists with global production network approaches.
Why it matters
Most products — and most supply-chain sustainability risks — are now made across borders; the GVC lens shows where governance can reach. **Note:** 1153 Functional upgrading (Batch 15) is a core GVC concept; complements 1216 Global commodity chain.
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