The world economy is facing a number of structural shifts that may dramatically change the outlook of GVCs – and thus economic globalisation – in the coming years. On the one side, there are factors that have promoted the emergence and growth of GVCs in the past and these are expected to facilitate the future expansion of GVCs; thus, “business as usual”.

On the other side, there are other factors that push for “a new normal” of GVCs: these include old and new factors, i.e. factors which are known to negatively impact GVCs but also emerging factors of which the possible effects on GVCs are less known. These factors such as growing (wage) costs in emerging economies, rising transport costs and especially the digitalisation of production are expected to increasingly challenge the organisation of production in long and complex GVCs and may shape the future evolution of GVCs differently.

A forward-looking exercise based on the formulation of different scenarios for the next 10-15 years, indicates that the future of GVCs may look quite different from the past. A number of emerging factors are shown to result in a clear break and reversal of the past trends of growing length, complexity and pervasiveness of GVCs. The growing digitalisation of production is most likely the biggest game-changer, reversing the importance and length of GVCs and reorienting global production and trade back towards OECD countries. In addition to global hubs in GVCs, production may become increasingly concentrated in regional/local hubs closer to end markets both in developed and emerging economies.

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