Global Value Chains

The global economy is increasingly structured around production processes of a final product that are fragmented across national economies, wherein intermediate goods and associated services may cross national borders several times before they are assembled and sold as a final product. Such global value chains (GVCs) account for a sizable share of international trade, global gross domestic product and employment in both developed and developing countries. The evolution of GVCs in diverse industries, such as agrifood, textiles and apparel, automotive, electronics, tourism and business services, has significant implications for cross-border trade, production and employment arrangements. GVCs link firms, workers and consumers around the world and often provide a stepping stone for firms and workers in developing countries to participate in the global economy. For many countries, especially low-income countries, the ability to effectively integrate into GVCs, and eventually upgrade their position therein, is a vital condition for economic and social development.

The new and diverse production arrangements organized by multinational enterprises through GVCs have increased the complexity of compiling economic statistics, as it is more difficult to break down production activities on a country-by-country basis. The measurement challenges include the choice of the statistical unit, the classification of enterprises and products involved in GVCs, the implementation of the principle of economic control and ownership, and the recording of domestic and cross-border transactions and positions in national accounts and balance of payments statistics.

The Guidelines on Accounting for Global Value Chains: GVC Satellite Accounts and Integrated Business Statistics were prepared by the Expert Group on International Trade and Economic Globalization Statistics. The Expert Group was established by the United Nations Statistical Commission in 2015 to address the challenges that globalization and emerging complex production arrangements pose to compiling macroeconomic and business statistics, including the supporting business registers.

These Guidelines provide a national perspective on globalization on the basis of a GVC accounting framework that describes industry-specific GVCs in a multi-country supply chain of goods, services and institutional arrangements. Doing so allows for an integrated presentation of production, income, assets and liabilities by partner country for those GVC industries that play a significant role in the national economy, resulting in GVC-specific, multi-country supply and use tables and related institutional sector accounts.

These accounts rely on a framework for integrated business, trade and investment statistics, which is based on a global enterprise perspective, with the aim of better understanding the business models and business accounting schemes of global enterprises in their day-to-day activities. Thus, the Guidelines further elaborate on the concepts of business lines and business functions and profiling large multinational enterprises. They emphasize the importance of statistical business registers and global registers and resolving data inconsistencies in basic economic statistics.

The Guidelines are a result of extensive consultations with the Expert Group on International Trade and Globalization Statistics, through both virtual fora and face-to-face meetings. The Guidelines were circulated for a global consultation with national statistical offices and relevant international organizations in February 2019. The draft Guidelines were then submitted to the United Nations Statistical Commission in March 2019, together with the results of the global consultation. The United Nations Statistical Commission took note of the Guidelines and encouraged countries to implement the global value chain satellite accounts.