{"id":1044,"date":"2025-10-02T04:01:43","date_gmt":"2025-10-02T04:01:43","guid":{"rendered":"https:\/\/www.thebrokeronline.eu\/it-s-about-capabilities-not-products\/"},"modified":"2025-10-02T04:01:43","modified_gmt":"2025-10-02T04:01:43","slug":"it-s-about-capabilities-not-products","status":"publish","type":"page","link":"https:\/\/www.thebrokeronline.eu\/blogs\/employment\/inequality-and-the-middle-classes\/it-s-about-capabilities-not-products\/","title":{"rendered":"It S About Capabilities Not Products"},"content":{"rendered":"<section class=\"content column wide left blog_post content view\" id=\"content\">\n<div class=\"edit image\">\n\t<\/div>\n<article class=\"fader\">\n<header class=\"contents\">\n<div class=\"share\">\n\t\t\t<script type=\"text\/javascript\">\n    var addthis_config = {\n        ui_language = 'en'\n    }\n<\/script><\/p>\n<div class=\"addthis sharing\">\n\t<!-- AddThis Button BEGIN --><\/p>\n<div class=\"addthis_toolbox addthis_default_style addthis_32x32_style\" addthis:title=\"It\u2019s about capabilities, not products\">\n\t<a class=\"addthis_button_twitter\" tw:via=\"thebrokeronline\"><\/a><br \/>\n\t<a class=\"addthis_button_facebook\"><\/a><br \/>\n\t<a class=\"addthis_button_pinterest_share\"><\/a><br \/>\n\t<a class=\"addthis_button_preferred_4\"><\/a><br \/>\n\t<a class=\"addthis_button_compact\"><\/a><br \/>\n\t<a class=\"addthis_counter addthis_bubble_style\"><\/a>\n\t<\/div>\n<p>\t<script type=\"text\/javascript\">var addthis_config = data_track_addressbar;<\/script><br \/>\n\t<script type=\"text\/javascript\" src=\"https:\/\/www.thebrokeronline.eu\/files\/js\/300\/addthis_widget.js\"><\/script><br \/>\n\t<!-- AddThis Button END -->\n<\/div>\n<div class=\"addthis article_options\">\n\t\t<!-- \n\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.thebrokeronline.eu\/mandrill\/subscription\/add\/79343\/79357\">Subscribe<\/a>\n\t\t\t\t -->\n    \t\t\t\t<\/div>\n<\/p><\/div>\n<h1>\n\t\t\t\t\t\t\tIt\u2019s about capabilities, not products<br \/>\n\t\t\t\t\t<\/h1>\n<div class=\"clear\"><\/div>\n<div class=\"pubDate\">\n\t\t<a href=\"https:\/\/www.thebrokeronline.eu\/experts-and-authors\/van-de-vijsel-annemarie\/\">Annemarie  van de Vijsel<\/a>\t\t|<br \/>\n\t\t\t\t\t\t\t23 June 2025\n\t\t\t\t\t\t<\/div>\n<\/header>\n<div class=\"body contents\">\n\t<!-- body --><\/p>\n<p class=\"yunu3cvqabft7vifv\"><b><\/p>\n<p class=\"yunu3cvqabft7vifv\">In the opening lecture of the 14th General Conference of the European Association of Development Research and Training Institutes (EADI), Professor of International Development at the UK\u2019s Open University Raphael Kaplinsky addressed the challenges of achieving economic inclusiveness.<\/p>\n<p>\t\t<\/b><\/p>\n<p class=\"yunu3cvqabft7vifv\">\n<p class=\"yunu3cvqabft7vifv\">Kaplinsky admitted that participating in the global economy certainly brings benefits to countries, as the division of labour increases productivity and trade in comparative advantages provides the potential for mutual gain. But, as he already suggested at the start of his lecture, that is not always the case. Not all countries are able to make good use of these opportunities.<\/p>\n<p class=\"yunu3cvqabft7vifv\">In his lecture opening the 14th EADI General Conference in Bonn, Germany, Kaplinsky explained that everything depends on whether a firm has the capacity to generate appropriate rents \u2013 either directly during the production process or in economic activities related to the process &#8211; and to protect them. Those that can will benefit from participation in the global economy, while those that cannot will be even worse off. They will face a race to the bottom and a fall in income for their employees. Even growth rates can be worse than before.<\/p>\n<p class=\"yunu3cvqabft7vifv\">The more a company\u2019s economic performance depends on global value chains, the more it faces the threat of becoming involved in a competition that leads to relatively low rents in the production sphere. Local companies have less negotiating power to set prices, with the consequence that they will be squeezed by higher demands from larger companies in the value chain, especially to produce more for less. The big question is how can this change? How can global value chains stimulate responsible development?<\/p>\n<p class=\"yunu3cvqabft7vifv\">To answer this question, it is important to understand global value chains better. Today, according to Kaplinsky, more than two-thirds of global trade takes place in these global chains \u2013 in international trade in unfinished products, facilitated by direct investments. Therefore, as the title of his lecture suggested, it is \u2018not <i>whether<\/i>, but rather <i>how <\/i>to participate in the global economy\u2019.<\/p>\n<p class=\"yunu3cvqabft7vifv\">Kaplinsky distinguished two types of global value chains. Most value chains are specialized vertically: different parts of a final product are made in different countries and unfinished products are shipped around the world. In Kaplinsky\u2019s words, \u201ctrade is no longer about products, but about capabilities\u201d. You need to establish the capabilities to specialize in the products and services needed within the chains. This specialization causes problems in quantifying the nature of global trade. According to Kaplinsky, 28% of world trade has been counted at least twice in the official statistics, as products are shipped all around the world before assembled into one final product. Regions in which value chains are mainly vertically specialized, he advised, should facilitate international trade, and then specialize in a certain task.<\/p>\n<p class=\"yunu3cvqabft7vifv\">In Africa, however, less than a quarter of the trade is conducted in vertically specialized global value chains. More than three quarters takes place in additive global value chains, the second type of chain referred to by Kaplinsky. Additive value chains start with a natural resource like cocoa, to which value is gradually added as it moves along the chain. Globally, these types of chains only make up less than a quarter of trade organised in value chains.<\/p>\n<p class=\"yunu3cvqabft7vifv\">The \u2018strategic policy agenda\u2019 for regions with predominantly additive global value chains is different to the agenda Kaplinsky proposes for vertically specialized value chains. They have to thicken out rather than specialize in a certain task. Creating linkages, especially locally, is also important. And not only within the primary sector (agriculture, mining) but also by adding local value in specialized services and manufacturing specialized machinery, technology or tools for the main companies operating in the additive value chain.<\/p>\n<p class=\"yunu3cvqabft7vifv\">\u201cAfrica, and many developing countries, have to think about how to generate appropriate rent and how to maintain it,\u201d Kaplinsky said. \u201cIt is not bad to have a large resource sector, but countries have to develop the capacity to profit from participation in the global economy.\u201d<\/p>\n<p class=\"yunu3cvqabft7vifv\">So, Kaplinsky concluded,\u201cindustrial policy might be back on the agenda\u201d. But it is not traditional industrialization; it is about creating productive sectors, looking for opportunities and linking them to the market. Understanding the demand side is even more important than creating supply within global value chains. Otherwise companies and the economy will be squeezed too much. To maintain high rents it is important that \u201call parties in the value chain keep talking to each other. But the question then is, who will conduct the orchestra?\u201d<\/p>\n<p class=\"yunu3cvqabft7vifv\"><b>The Broker reports from the EADI conference &#8216;Responsible Development in a Polycentric World: Inequality, Citizenship and the Middle Classes&#8217;, 23 \u2013 26 June 2025 in Bonn, Germany. The Broker is main media partner during this conference.<\/b><\/p>\n<\/p>\n<p class=\"yunu3cvqabft7vifv\">\n<p class=\"credit\">Photo credit main picture: chocolate in the market, cochabamba, bolivia \/ Josie via flickr<\/p>\n<p>\t\t<!-- body -->\n\t<\/div>\n<\/article>\n<div class=\"clear\"><\/div>\n<section class=\"commentform content column wide left\">\n<div class=\"disqus_content\">\n\t\t\t<a name=\"comments\" id=\"comments\"><\/a><\/p>\n<div id=\"disqus_thread\"><\/div>\n<p>\t\t\t<script type=\"text\/javascript\">\n\t\t\t\t\/* * * CONFIGURATION VARIABLES: EDIT BEFORE PASTING INTO YOUR WEBPAGE * * *\/\n\t\t\t\tvar disqus_shortname = 'broker'; \/\/ required: replace example with your forum shortname\n\t\t\t\tvar disqus_identifier = '14872';\n\t\t\t\t\/* * * DON'T EDIT BELOW THIS LINE * * *\/\n\t\t\t\tfunction trackComment(comment)\n\t\t\t\t{\n\t\t\t\t\tconsole.log(comment);\n\t\t\t\t}\n\t\t\t\tfunction disqus_config() {\n\t\t\t\t\tthis.callbacks.onNewComment = [function() { \n\t\t\t\t\tconsole.log(comment);\n\t\t\t\t\t}];\n\t\t\t\t}\n\t\t\t\t(function() {\n\t\t\t\t\tvar dsq = document.createElement('script'); dsq.type = 'text\/javascript'; dsq.async = true;\n\t\t\t\t\tdsq.src = '\/\/' + disqus_shortname + 'https:\/\/www.thebrokeronline.eu\/files\/blogs\/employment\/inequality-and-the-middle-classes\/.disqus.com\/embed.js';\n\t\t\t\t\t(document.getElementsByTagName('head')[0] || document.getElementsByTagName('body')[0]).appendChild(dsq);\n\t\t\t\t})();\n\t\t\t<\/script><br \/>\n\t\t\t<!--\n\t\t\t<noscript>Please enable JavaScript to view the <a href=\"http:\/\/disqus.com\/?ref_noscript\">comments powered by Disqus.<\/a><\/noscript>\n\t\t\t<a href=\"http:\/\/disqus.com\" class=\"dsq-brlink\">comments powered by <span class=\"logo-disqus\">Disqus<\/span><\/a>\n\t\t\t-->\n\t\t<\/div>\n<\/section>\n<\/section>\n","protected":false,"raw":""},"excerpt":{"rendered":"<p>It\u2019s about capabilities, not products Annemarie van de Vijsel [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"template_2.php","meta":{"footnotes":""},"class_list":["post-1044","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>It\u00e2\u20ac\u2122s about capabilities, not products \/ Inequality and the Middle Classes \/ Employment \/ Blogs - The Broker<\/title>\n<meta name=\"description\" content=\"In the opening lecture of the 14th General Conference of the European Association of Development Research and Training Institutes (EADI), Professor of International Development at the UK\u00e2\u20ac\u2122s Open University Raphael Kaplinsky addressed the challenges of achieving economic inclusiveness.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thebrokeronline.eu\/blogs\/employment\/inequality-and-the-middle-classes\/it-s-about-capabilities-not-products\/\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"It\u00e2\u20ac\u2122s about capabilities, not products \/ Inequality and the Middle Classes \/ Employment \/ Blogs - The Broker\" \/>\n<meta property=\"og:description\" content=\"In the opening lecture of the 14th General Conference of the European Association of Development Research and Training Institutes (EADI), Professor of International Development at the UK\u00e2\u20ac\u2122s Open University Raphael Kaplinsky addressed the challenges of achieving economic inclusiveness.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.thebrokeronline.eu\/blogs\/employment\/inequality-and-the-middle-classes\/it-s-about-capabilities-not-products\/\" \/>\n<meta property=\"og:site_name\" content=\"Homepage - Broker Online\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"It\u00e2\u20ac\u2122s about capabilities, not products \/ Inequality and the Middle Classes \/ Employment \/ Blogs - The Broker","description":"In the opening lecture of the 14th General Conference of the European Association of Development Research and Training Institutes (EADI), Professor of International Development at the UK\u00e2\u20ac\u2122s Open University Raphael Kaplinsky addressed the challenges of achieving economic inclusiveness.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.thebrokeronline.eu\/blogs\/employment\/inequality-and-the-middle-classes\/it-s-about-capabilities-not-products\/","og_type":"article","og_title":"It\u00e2\u20ac\u2122s about capabilities, not products \/ Inequality and the Middle Classes \/ Employment \/ Blogs - The Broker","og_description":"In the opening lecture of the 14th General Conference of the European Association of Development Research and Training Institutes (EADI), Professor of International Development at the UK\u00e2\u20ac\u2122s Open University Raphael Kaplinsky addressed the challenges of achieving economic inclusiveness.","og_url":"https:\/\/www.thebrokeronline.eu\/blogs\/employment\/inequality-and-the-middle-classes\/it-s-about-capabilities-not-products\/","og_site_name":"Homepage - Broker Online","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"4 minutes"}},"_links":{"self":[{"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/pages\/1044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/types\/page"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/comments?post=1044"}],"version-history":[{"count":0,"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/pages\/1044\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thebrokeronline.eu\/wp-json\/wp\/v2\/media?parent=1044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}