Oriental Republic of Uruguay
Uruguay has much to gain from further integration with the global marketplace. Increased trade allows economies of scale and increases exposure to technological and knowledge spillovers, resulting in greater productivity. Participating in global and regional value chains is an important launch-pad for international integration. Uruguay requires a multipronged strategy that targets increased sophistication of Uruguay’s productive structure and diversification into specialized, high-value, modern services exports unconstrained by lack of economies of scale or distance. This report analyzes the dairy and Information & Communications Technology (ICT) and ICT Enabled Services (ICTES) value chains in Uruguay to identify opportunities for industry-specificupgrading and integration with global value chains (GVCs). By taking the dairy and ICT/ICTES value chains as concrete cases, the analysis piloted here illustrates how a traditional industry, locked in low value added exports, such as dairy, and a new export service industry, such as ICT/ICTES, can tackle the remoteness and ‘smallness’ challenges of Uruguay, and pursue economic upgrading andbetter international integration. The analytical approach targets opportunities to both enter new international production networks and participate in higher-value-added business segments. These objectives align with the Government of Uruguay’s priority to determine how the country can integrate better with global markets through GVCs. GVCs have four key features that set them apart from traditional production and trade: (1) customization of production—with intensive contracting between parties, often subject to distinct legal systems, (2) sequential production decisions going from the buyer to the suppliers, (3) high contracting costs, and (4) global matching not onlyof goods and services, but also of production teams. These distinct features of GVCs have implications for the overall business environment conducive to fertile grounds for GVCs to prosper, as well as for the types of trade facilitation efforts, infrastructure, skills, and trade and investment policies that are best suited for this reality.
| Main Authors: | , , |
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| Format: | Report biblioteca |
| Language: | English |
| Published: |
World Bank, Buenos Aires
2014
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| Subjects: | GLOBAL VALUE CHAINS, PRIVATE SECTOR DEVELOPMENT, INFORMATION AND COMMUNICATION TECHNOLOGY, DAIRY FARMS, TRADE AND INVESTMENT POLICY, SMALL AND MEDIUM ENTERPRISES, FOREIGN DIRECT INVESTMENT, ECONOMIES OF SCALE, COMPETITIVENESS, EXPORT COMPETITIVENESS, DAIRY INDUSTRY, |
| Online Access: | http://documents.worldbank.org/curated/en/239321537906711662/Oriental-Republic-of-Uruguay-Integration-into-Global-Value-Chains-the-Dairy-Industry-and-the-ICT-Industry https://hdl.handle.net/10986/30469 |
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| Summary: | Uruguay has much to gain from further
integration with the global marketplace. Increased trade
allows economies of scale and increases exposure to
technological and knowledge spillovers, resulting in greater
productivity. Participating in global and regional value
chains is an important launch-pad for international
integration. Uruguay requires a multipronged strategy that
targets increased sophistication of Uruguay’s productive
structure and diversification into specialized, high-value,
modern services exports unconstrained by lack of economies
of scale or distance. This report analyzes the dairy and
Information & Communications Technology (ICT) and ICT
Enabled Services (ICTES) value chains in Uruguay to identify
opportunities for industry-specificupgrading and integration
with global value chains (GVCs). By taking the dairy and
ICT/ICTES value chains as concrete cases, the analysis
piloted here illustrates how a traditional industry, locked
in low value added exports, such as dairy, and a new export
service industry, such as ICT/ICTES, can tackle the
remoteness and ‘smallness’ challenges of Uruguay, and pursue
economic upgrading andbetter international integration. The
analytical approach targets opportunities to both enter new
international production networks and participate in
higher-value-added business segments. These objectives align
with the Government of Uruguay’s priority to determine how
the country can integrate better with global markets through
GVCs. GVCs have four key features that set them apart from
traditional production and trade: (1) customization of
production—with intensive contracting between parties, often
subject to distinct legal systems, (2) sequential production
decisions going from the buyer to the suppliers, (3) high
contracting costs, and (4) global matching not onlyof goods
and services, but also of production teams. These distinct
features of GVCs have implications for the overall business
environment conducive to fertile grounds for GVCs to
prosper, as well as for the types of trade facilitation
efforts, infrastructure, skills, and trade and investment
policies that are best suited for this reality. |
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