Once concentrated among a few largeeconomies, global flows of goods, services, and capital nowreach an ever-larger number of countries worldwide. Globaltrade in goods and in services both increased 10 timesbetween 1980 and 2011, while foreign direct investment (FDI)flows increased almost 30-fold. A value chain is global whensome of these stages are carried out in more than onecountry, most notably when discrete tasks within aproduction process are fragmented and dispersed across anumber of countries. Southern African Customs Union (SACU) -region global value chains (GVCs) are both a new reality andsignificant opportunity for expanding non-commodity exportsto support growth, diversification, and job creation in theregion. The task-based nature of GVCs creates opportunitiesfor developing countries to establish very quickly aposition in global trade within a sector in which they mayhave had no previous experience. For South Africa, GVCs areseen as a route to higher manufacturing exports and greatervalue addition. For other SACU countries, GVCs are seen as aroute to diversification and global integration, and toleverage the possibility of greater investment from SouthAfrica itself. The main objectives of the study are asfollows: (i) to understand trends of GVC participation andcompetitiveness of South Africa and the wider SACU region,the outcomes from this participation (exports, jobs, andproductivity), and the factors that determinecompetitiveness; (ii) to map the extent of value chainintegration across the region and identify barriers todeeper integration; and (iii) to identify policies andactions that will be required to develop a globallycompetitive, high value-adding factory Southern Africa.
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