Global Global value chains (GVCs) account for around 70% of global trade, as complex networks of cross-border production, from raw materials to finished goods, continue to grow. GVCs have fuelled growth and job creation, particularly in emerging markets, by facilitating specialisation and technology transfer. However, recent crises (COVID-19, conflicts, and climate shocks) have shown significant vulnerabilities, including fragile supply networks, unequal profits, and environmental costs. Many developing countries are still ‘locked into the lower end of global value chains,’ missing out on high-value manufacturing and innovation. The task is to reinvent GVCs such that they are robust, environmentally sustainable, and inclusive (primarily benefitting small businesses and developing countries). This problem is crucial to the G20’s agenda for 2025. Recent G20 communiqués underline the importance of incorporating sustainability and equity into trade. India’s 2023 Summit made a clear commitment to ‘create inclusive, sustainable, and resilient global value chains’ and assist developing countries in moving up the chain. Similarly, in October 2024, G20 trade ministers agreed that ‘trade and investments should foster sustainable development and enhance participation of women’ in trade, and they urged for ecologically sustainable economic development through trade and investment. Brazil’s 2024 presidency emphasised climate action and WTO reform as G20 objectives. In this context, an urgent ‘future-of-work’ orientation and focus on MSMEs, digitalisation, and green growth are recurring themes.

Key problems persist: GVC fragility (disruptions ripple quickly, as shown in semiconductors and food chains), social exclusion (small enterprises, women, and least-developed countries lag), and environmental damage (carbon and resource depletion). For example, in many emerging nations, just 3% to 5% of manufacturing enterprises use new digital technologies, leaving the rest to rely on outmoded ‘analogue’ production methods.  Micro, small, and medium enterprises (MSMEs) account for about 90% of businesses and more than 50% of employment globally, but only provide a small fraction of exports in poorer countries due to trade obstacles. Without action, inequalities would for about 90% of businesses and more than 50% of employment globally, but only provide a small fraction of exports in poorer countries due to trade obstacles. Without action, inequalities would deepen: affluent economies are growing trade faster than developing countries in 2024, and climate concerns threaten to ‘permanently disrupt’ GVCs if sections of the world lag on net-zero commitments.