The world is more connected than ever before. Whereas in the past, products were routinely devised, designed, and produced entirely within single countries, today, businesses rely on vast global networks of partners and companies to help them create and deliver goods and services. These networks are referred to as global value chains (GVCs).
GVCs are an important concept to understand if you’re interested in a career in international trade management and logistics. Here’s a look at a few key things about GVCs you should know.
Global Value Chains Are Not Entirely the Same as Global Supply Chains
It’s easy to confuse global supply chains with GVCs, but these two terms are not quite the same. A supply chain refers to the steps that are taken to manufacture and distribute a physical product. While GVCs often include supply chains, they are also much broader in scope. A GVC incorporates other steps, services, and activities involved in global business and trade, regardless of whether they relate directly to manufacturing and distribution.
For example, a GVC for a new smartphone made by an American company may include a marketing agency in London, a design team in New York, engineers in Berlin, manufacturers in China, customer service in India, and a legal team in Washington. By studying international trade management & logistics, you’ll study GVCs, as well as a number of areas related to GVCs, including international trade finance, international sales and marketing, and international market entry strategies. This comprehensive education in international trade helps you gain a better appreciation for the scope of GVCs beyond supply chains alone.
GVCs Allow Businesses and Countries to Benefit from Unique Local Advantages
The main advantage of GVCs is that they allow companies to benefit from the comparative advantages that different countries offer. Few countries can do everything well, but most countries can at least excel at some things. For example, some countries may offer low labour costs, others may have engineering expertise, and some may be able to produce unique raw materials. Through GVCs, companies can benefit from these local advantages.
In turn, this also benefits entire countries, especially ones that may have difficulty developing expertise in every step of a GVC. For example, while large and highly developed countries like the United States, Japan, or Germany may have the resources to produce goods from design to completion, should they choose to do so, it’s much harder for a smaller country to do the same. However, if a smaller country can focus on developing expertise in just a few areas, such as a particular industry or labour skill, it can become an important player in GVCs.
Global Value Chains Are Creating Careers in International Trade Management & Logistics
GVCs are becoming increasingly complex as both businesses and governments around the world recognize their advantages. That complexity is generating more demand for careers related to GVCs, particularly as more companies need to manage complex global trade networks. GVCs, as a result, are creating career opportunities related to logistics, supply chain, freight, and import/export.
According to the World Bank, GVCs are responsible for 60 per cent of international trade and employ approximately 17 million people. With an international trade management diploma, you’ll be able to pursue a number of careers that are directly supported by GVCs, including as a logistics coordinator, supply chain coordinator, importer/exporter, customs broker, freight forwarder, and much more.
Are you ready for a new career?
Contact Discovery Community College to learn more about our international trade management program.