What is slicing up of global value chain?
A closely related concept is slicing up of global value chain. It refers to the allocation of components production among different countries. Here, low cost or specialized production advantages tempts a finished product producing firm to source a particular component from a specific country. Thus he effectively slices up the value chain of his product among different countries hen he is sourcing the components.
Why slicing up of global value chain is important from a country’s perspective?
The trend of companies sourcing components from different countries need macroeconomic care from developing countries like India. We have to encourage superior component manufacturing practices. Similarly, policies to be tailored to ensure that the country should get a good slice of this global value chain. Encouragement to local component manufacturers will help them to acquire skill, technology and scale to supply the components competitively in the global market.