Jan 18, 2021
Global Value Chain, Trade and Needed skills projection for Industries
Trade is a major source of employment.
Nevertheless, trade has recently been caught in the crossfire in discussions around the decline of manufacturing employment and the polarization of labor markets in advanced economies.
A global value chain (GVC) is the series of stages in the production of a product or service for sale to consumers. Each stage adds value, and at least two stages are in different countries.
If we look forward and backward gvc participation indexes by industry groups ;
For Forward gvc participation index by industry groups in 2019
For Backward gvc participation index by industry groups in 2019
On the other hand comparing forward and backward(simplex/complex) gvc participation and gvc activities in manufacturing as a percentage share of in Asia from 2000 to 2017;
In despite of gvc participation in Asia, in Europe gvc participation and gvc activities in manufacturing as a percentage share of in Europe from 2000 to 2017;
The factor-endowment theory of trade predicts that trade will reduce returns to unskilled labor in advanced economies while raising returns to capital and skilled labor.
The different form of import exposure
The emergence of global value chains — whereby goods that produced from one country to be produced within one country are now fragmented and distributed across global networks of production — has offered developing countries new opportunities to integrate into the global economy.
The skill-biased nature of GVC trade is associated with increased complexity of global supply chains as well as increased use of skill-intensive inputs, notably services.
New emerging trends, including automation and digitization, may further determine how employment in developing countries will be affected by GVC trade in the future.
Lets look a insights from Coursera Global Skills Index 2020 report related with needed skilling in Industry results ;
HOW INDUSTRIES PERFORM ACROSS SKILL DOMAINS
COVID-19 has impacted every industry. Faced with declining consumer confidence, factory shutdowns, and product shortages, companies have had to navigate unprecedented uncertainty.But as economies around the world begin to reopen, business leaders will need to move beyond immediate response and recovery and mitigate disruption on the horizon.1*
The future calls for a new set of critical skills and the cost of a skills shortage has come into sharp focus amid COVID-19. 2*
Technology skills have been essential to helping companies respond to the crisis in the short-term and will continue to support the future of remote work — from managing change and driving online services to automating processes that will no longer be done in person.3*
According to Coursera global skills index 2020
The technology, finance, and professional services industries top the list of the most-prepared industries to take advantage of this emerging environment.
I will go over Automotive, Professional services, Consumer goods , Finance, Manufacturing.
I will cover with this current article automotive, professional services and consumer goods.
My next article related with continue this article series , explain gvc types and supply chain 4.0.
Automotive Industry
Consumer expectations have put enormous pressure on the automotive industry to provide more than transportation from point A to point B. Drivers and passengers increasingly expect cutting-edge software and seamless mobility experience.
The pressure to innovate has only been heightened by complications due to COVID-19, including the disrup- tion of supply chain part exports from China, large-scale manufacturing interruptions across Europe, and the closure of assembly plants in the United States.4*
What is the current state of the automotive industry ?
While the industry struggles in business and technology, it ranks third in the data science do main.This skills imbalance suggests that as automotive companies invest in data science skills to capitalize on self-driving vehicles, they are neglecting critical business and technology skills.
The World Economic Forum predicts that there is $670 billion of value at stake for automotive players and a further $3.1 trillion of societal benefits as a result of digital transformation of the industry until 2025.5*
To prepare for the next wave of innovation, companies should focus on developing a more balanced set of skills beyond the data science domain, including: artificial intelligence (AI), blockchain, agile project management, and digital marketing.
Professional Services
Professional services firms are pushing to deliver new technology solutions beyond their traditional scope (e.g., designing and developing apps, prototypes, and intelligent systems) and business, tech, and data science skills are key to success.
The industry demonstrated the strongest sales, management, and accounting skills of all 10 industries studied.
And as the industry embeds tech and automation into their processes to better scale, manage, and connect their internal teams, the skills needed to maintain those systems will be a necessity.
The need for balanced and stamina in the industry
Paired with strategic business acumen and strong communication skills, improved data science skills will unlock an opportunity for consultants to provide even deeper, predictive insights for their clients.
As firms invest in internal analytics teams to support their strategy teams,83 their ranking in the domain will undoubtedly improve.
In a data-centric world, professional services organizations will need to develop the following skills to compete: data visualization, data management, statistical analysis, business analytics, machine learning, and blockchain.
Consumer Goods
The consumer goods (CG) sector is evolving rapidly, shaped by today’s more demanding customers. The rise of digital technology and “anytime, anywhere” consumption has created a perfect storm for disruption where only the most agile players can survive.
CG companies have a massive opportunity if they are willing to invest in the business, technology, and data science skills of the future.
There’s a lot of work to be done: the CG industry ranks in the bottom half of industries in all three domains. (Business , Technology and Data science).
This may explain why many CG companies are struggling to fully capitalize on digitization; on average, large consumer goods companies have online market shares that are at least five to 10 percentage points below the shares they have in the brick-and-mortar world.
Those lower market shares translate into hundreds of millions of dollars in lost sales opportunities6* — a cost that will likely only increase as more consumers turn to online shopping in response to in-person store closures, COVID-19 health concerns, and longer-term trends.
As the amount of consumer data skyrockets, a workforce with strong data science skills will be essential. AI and advanced analytics skills will produce more accurate forecasting for internal teams and hyper-personalization for consumers.7*
My next article related with continue this article series, Finance, Manufacturing and Media & Entertainment. Explain gvc types and supply chain 4.0.
References ;
- 1*: The heart of resilient leadership: Responding to COVID-19, Deloitte Insights. March 16, 2020.
- 2*: Sectors & Industries — Performance, Fidelity. April 2020.
- 3* Understanding COVID-19’s impact on the automotive sector. Deloitte. March 25, 2020.
- 4* Reinventing the wheel: digital transformation in the automotive industry. World Economic Forum. 2020.
- 5* How CPG Companies Can Catch Up as Online Sales Take Off. BCG. February 2019.
- 6* Ibid.
- 7*Unlocking Growth in CPG with AI and Advanced Analytics. BCG. October 15, 2018.
- https://www.wto.org/english/res_e/booksp_e/gvc_dev_report_2019_e.pdf
- https://www.coursera.org/gsi
