Indonesia’s participation in global production networks

Indonesia’s participation in global production networks

October, 2012
Moekti P. Soejachmoen
The pattern of global manufacturing trade has changed substantially over the last two decades, with a rapid increase in the parts and components trade compared to other manufactured goods. This phenomenon reflects an increased intensity in global production networks. With technological development and innovations in telecommunications and transportation, it is possible for firms to fragment their production process into smaller segments in which components of production or assemblies can be relocated to different places, creating global production networks. Trade and investment liberalisation in many developing countries has facilitated this process.