Services in Global Value Chains – An Insight into the Current Situation in the EU Member States

Abstract

Global value chains (GVCs) consist of many production
processes and phases/tasks that take place in different
countries. The studies of the global value chains are mainly
focused on manufactured products, often neglecting the role
of services. In this paper, the emphasis is on the service
sector, trade in services and the measurement of their
participation in GVCs in the EU member states. There are
four different ways, "modes of supply", to deliver services
from a producer to the final customer. Official statistics
include some of these modes, whereas some are hidden
within the manufacturing process. According to the
descriptive statistics analysis and presented data employed, it
is clear that services trade is undervalued; services represent
the majority of value added in the EU's GDP, but less than
half of foreign trade; domestic value added in the service
sector is higher than in manufacturing, which indicates the
importance of domestic resources in the creation and export
of services. EU industries are highly serviced and,
interestingly, services contribute to more than 30 per cent of
manufacturing production, with a higher share of foreign
services.