Global value chains drive growth, but inclusion gaps persist: ADB report

Greater specialisation across different stages of production has powered economic growth, job creation and poverty reduction in Asia and the Pacific over the past 25 years, according to a new report by the Asian Development Bank (ADB).

The findings were presented in the Asian Development Policy Report 2026, titled Global Value Chains and Inclusive Development, launched at ADB's 59th Annual Meeting today (6 May).

The report notes that the region now accounts for roughly one-third of global value chain (GVC) trade, with developing economies doubling their share from 9% in 2000 to 18% in 2023.

However, economies in East and Southeast Asia have become deeply integrated into regional and global production networks, capturing higher value addition. In contrast, many smaller, lower-income and geographically remote economies continue to lag behind and remain largely excluded.

"Greater geoeconomic fragmentation reduces the opportunities for firms to benefit from global value chains, which risks stifling industrialization and growth in economies stuck in low-value roles," said ADB Chief Economist Albert Park.

"To bridge the gap, support for less-developed economies is crucial to help them take advantage of emerging technologies, and to strengthen infrastructure, logistics, and the business environment to enhance productivity and competitiveness," he added.

The report highlights that while GVCs allow firms to specialise in specific production segments and integrate quickly into global markets, the gains are not evenly distributed. Large, productive firms tend to benefit the most, while small and medium-sized enterprises (SMEs) face significant barriers, including high compliance costs and limited capabilities.

Shifting global dynamics, including geopolitical tensions, supply chain disruptions and rapid technological change are also reshaping how countries engage with global value chains.

To address these challenges, the report outlines three key policy priorities.

First, resilience is becoming central to competitiveness. Countries need to strengthen infrastructure, improve firms' adaptability, and adopt policies that support diversification of markets, inputs and partnerships.

Second, environmental sustainability is increasingly influencing participation in GVCs. Meeting evolving standards on sustainability, certification and traceability is now essential, requiring firms to adopt cleaner technologies and production processes.

Third, inclusion must remain a core objective. This involves reducing trade costs through better infrastructure and trade facilitation, enhancing workforce skills, and expanding SMEs' access to finance, digital platforms and export markets.

ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.