The development of new manufacturing technologies (e.g. robots, automatisation, 3D printing, cloud computing), reduction of trade related costs, reduction of transport costs, and significant advances in IT and communications technology have led to significant fragmentation of the production processes. However future technological developments (artificial intelligence, self-directing transport (air, road, sea), drones), will further change GVCs, as well as global supply and delivery systems. It is not yet clear whether this will lead to a shortening of GVCs, due to an increase in local production (e.g. 3D printing, fully roboticised production facilities – computer integrated manufacturing).
Apart from GVCs linked to goods, services have become a significant part of GVCs. According to a recent OECD study:
• ‘Services inputs, whether domestic or foreign, account for 37 % of the value of manufacturing exports in the sample of countries covered (mostly OECD economies). By adding service activities within manufacturing firms, this share increases to 53 % and the contribution of services to overall exports is close to two-thirds;
• Across countries, between 25 % and 60 % of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management, administration and back-office support. In Germany in 2015, 11 % of total employment is in services within manufacturing firms;