Sustainable Structural Change in the Context of Global Value Chains

Abstract

This chapter examines sustainable structural change in the context of global value chains (GVCs). More specifically, it considers the complex, multidimensional nature of structural transformation in a productive context characterized by a strong international fractionalization of production. In this chapter, sustainable productive transformation is defined as a process of export diversification and sophistication that results from the accumulation of capabilities and enables a country to enter a virtuous circle of lasting transformation. It first reviews recent empiric literature concerning structural transformation and adopting an approach through exports, with a focus on the two dimensions of productive transformation: export diversification and sophistication. It then analyses the new issues that GVCs raise for the study and process of structural transformation before discussing the sustainability of this process. The chapter shows that the limits of an approach through exports, often ignored in literature, is problematic particularly in the context of value chains.