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Services and Manufacturing in Global Value Chains: Is the Distinction Obsolete?

ADB 2019.04.16
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There is an ongoing debate on the “de-industrialization” of economies in both developed countries and developing countries. Many studies discuss the “de-industrialization” or “servicification” of economies in both developed and developing countries. Such studies rely on statistics that distinguish a manufacturing from a service sector. But in the age of global value chains (GVCs), it becomes increasingly difficult to disentangle manufacturing from service activities. Goods are produced with services, services are produced with goods, some manufacturing firms are factory-less, and companies tend to sell solutions to customers by bundling goods with services. This business reality has important implications for trade and industry analysis.

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