Expanding International Supply Chains: The Role of Emerging Economies in Providing IT and Business Process Services
By Michael Engman, OECD Trade Policy Working Paper No. 52, June 15, 2007
This paper looks at the expansion of international supply chains and the rise of
China, the Czech Republic, India and the Philippines as exporters of BPS and ITS. It also analyses the nature of and factors behind this trade and identifies major business- and trade-related challenges arising. In this context it presents some of the labour market implications resulting from increasing trade between OECD and non-OECD economies.
The analysis shows that the BPS and ITS sectors in the four emerging economies are very differently structured: Chinese and Czech companies are predominantly supplying their domestic markets while Indian and Philippine companies are focused mainly on supplying foreign markets. In terms of exports, they also supply different geographies: China is mainly exporting to Japan; the Czech Republic to the European Union; the Philippines to the United States; and India to the United States and UK. Several of the larger home-grown companies in the four countries are establishing significant presence in foreign markets, in particular in other emerging markets, to build capacity and leverage local comparative advantage. This highlights the fact that different geographies have different strengths and BPS and ITS-related FDI between emerging economies is likely to expand rapidly in the future.
>> View Article | created on: 06/15/2007
