Slowbalisation or a “New” type of GVC participation? The role of digital services

Abstract

This paper investigates the role of digital services in the dynamics observed in global value chains (GVCs) from 1995 to 2018. Despite the context of a deceleration in globalisation, we observe how countries’ exports are increasingly incorporating foreign digital services, suggesting that a new channel, digitally driven, for globalization and GVC participation is emerging. Using trade in value added data and Social Network Analysis (SNA) methodology, we map the network of these digital services flows linked to GVCs and analyse its characteristics and evolution for the period 1995–2018. Moreover, we identify the leading economies in those networks from the point of view of both source and destination countries. New actors such as China, India and Israel arise, sharing with the USA, Germany, and the UK the leadership as global providers of intermediate digital sectors. Small European economies and Singapore show the highest dependence on foreign digital sectors to be incorporated in their exports.