Summary of Asian Development Bank Webinar on Global Value Chains (GVCs)

Summary of Asian Development Bank Webinar on Global Value Chains (GVCs)

Event Overview

· Webinar: Asian Impact Webinar - Asian Development Policy Report 2026

· Speakers: Elisabetta Gentile, Hikari Ishido, Neil Foster-McGregor, Wenyin Cheng

· Topic: Global Value Chains (GVCs), resilience, inclusivity, and the role of economics vs. geopolitics

Key Discussion Points

1. Spatial Economics vs. Geopolitics in GVC Location Decisions

A central question raised: "Traditionally, firms located different stages of production where costs, skills, and market opportunities were most attractive. Today, how much are these decisions still driven by economics, and how much by geopolitics?"

Spatial Economics Factors (Agglomeration):

· Local input-output linkages

· Local thick markets

· Local knowledge spillovers and positive externalities

Spatial Economics Factors (Fragmentation/GVCs):

· Scattered immobile factors (resources)

· Land rent/cost of commuting

· Congestion and negative externalities

Geopolitical Factors (Agglomeration):

· Nationalism

· Attractive living standards

· Uncertain macroeconomic conditions

Geopolitical Factors (Fragmentation/GVCs):

· Domestic conflicts

· Worsening economic conditions

· Political corruption

· Natural disasters/wars

Key Insight: Spatial economic factors are more resilient than geopolitical factors

Audience Questions Addressed

Question 1 (Irene Malong):

"What are the issues that policy makers need to understand that will enable them to create business environment that optimizes the potential of using GVCs to produce a more inclusive economy?"

Response focus: Need for understanding local capabilities, skill development, and creating enabling environments that allow firms at different stages of development to participate meaningfully in GVCs.

Question 2 (Small Island Developing States):

"The level of capability and economic growth is highly uneven across the Asia-Pacific region. To build a more resilient and inclusive GVC, can you share some insights about the role of governments in working with ADB and other international partners in countries such as small island developing states?"

Response focus: Governments need to partner with international organizations like ADB to address capability gaps, infrastructure deficits, and build resilience in vulnerable economies.

Question 3 (Marjorie Rose Henry):

"How can sustainability be integrated into the global economy?"

Question 4 (Asep Rohmandar - YOU):

"Supply chain resilience: How do firms balance economic optimization with the need to secure supply chains against political risks?"

Question 5 (Ishita Bera):

"Which presents a greater challenge for inclusive GVC participation in developing countries: skill gaps, inadequate incentives, or other structural barriers?"

Question 6 (Jacobin Fermin Ambrosio):

"Inclusive development may require upskilling for some economies to catch up, while tech development are real in all sector, economic zones now are incorporating the university campus as part of these economic zones to improve on Total Factor Productivity."

Innovation noted: Economic zones now incorporating university campuses and localized power supplies to improve Total Factor Productivity.

Key Takeaways

1. Balance between economics and geopolitics: While traditional location decisions were largely economics-driven, geopolitical factors now play an increasingly significant role in GVC configurations.

2. Resilience: Spatial economic factors appear more resilient than purely geopolitical considerations for GVC stability.

3. Policy implications: Governments need to:

   · Address skill gaps and structural barriers

   · Partner with international organizations

   · Create business environments that enable inclusive GVC participation

   · Support vulnerable economies like small island developing states

4. Innovation in economic zones: Integration of university campuses and localized infrastructure to boost productivity and innovation.

5. Sustainability: A key concern being integrated into GVC discussions alongside resilience and inclusivity.