Future of Trade, Value Chains in Services: McKinsey

Trade increases in absolute terms though overall percentages are slowing, explains analysis from McKinsey Insights. Services like research, finance, engineering and more are growing at a faster pace than trade in goods,” creating value far beyond what national accounts measure,” the article reports, adding “services already constitute more value in global trade than goods. In addition, all global value chains are becoming more knowledge-intensive.” Manufacturers basing factories in nations with low wages and low skills have become less common, driving less than 20 percent of global goods trade. Companies instead seek infrastructure and access to consumers and reliable value chains that are increasingly more regional and less global. New technologies, growing demand and domestic value chains in emerging economies shape new trade patterns. New technologies like automation, artificial intelligence, blockchain logistics, electric vehicles and more will spur trade growth in services. Companies must reassess strategies for global operations and be nimble, prioritizing speed, proximity to consumers and relationships with suppliers. – YaleGlobal