Oriental Republic of Uruguay : Integration into Global Value Chains the Dairy Industry and the ICT Industry
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 an...
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| Language: | English |
| Published: |
World Bank, Buenos Aires
2018
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| 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 http://hdl.handle.net/10986/30469 |
| 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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