Servicification of Natural Resources Chains - Advancing Public Policies towards Latin American Competitiveness.
Presented by Humberto Luiz Ribeiro (Cornell University) on May 28th, 2015 in Montevideo - Uruguay.
Seminar hosted by IDB (Interamerican Development Bank) and REDLAS (The Latin American Network for Research on Services – RED Latinoamericana de Investigación en Servicios)
The Ten Facts About People With Autism Presentation
IADB-REDLAS Servicification of Latin American Natural Resources Chains
1. Servicification of Natural Resources
Advancing Public Policies towards LatAm Competitiveness
PRESENTER:
Humberto Ribeiro
EVENT:
REDLAS – Interamerican Development Bank
Montevideo – Uruguay
DATE:
May 28, 2015
2. Cornell University: Any Person, Any Study
• “Extinction is the rule.
Survival is the exception.”
Carl Sagan
Cornell Professor of Astronomy and
Space Sciences from 1968 to 1996
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3. Services & Production
• Services strengthening represent systemic competitiveness for any economy
• Intensification in Services in Natural Resources supply chains are a great
opportunity for Latin America:
» for increased competitiveness of the existing Natural Resources supply chains; and
» for consolidating new specialized Service Providers leveraging the regional vocation
(New Multilatinas!!)
• Recent research shows continued lack of Innovation in Latin America,
resulting in low productivity in the region
» Among all sectors in Latin America, Services have demonstrated the worst productivity of all
» Nevertheless, Knowledge Intensive Service Providers had productivity performance much
higher than the others
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4. Innovation
Supply Chains becomes more complex
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Basic Production
• Regional markets
Extended Reach
• Transportation to take
better products to
farther markets in
larger scale
World class
Competition
• Innovation and
differentiation to
sustainably conquer
new markets
Customer as King
• Empowerment of the
end-consumer
Management
Production Efficiency
Scattered
Production, SG&A,
Legal, Compliance,
etc
Finance
Financing Production
Financing Customers
Logistics
One-way
Reverse Logistics in
GVCs
Information
One direction supply-
chain information
Customer feedback
Chain proactivity
Branding
Advertising &
Channels
Research & Feedback
Holistic Social
Engagement
Fidelization
Training
Support & Warranty
Experience
Gover
nance
Sustain
ability
Social
MediaSome Services Dimensions
5. When the Product is Intangible
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Intangible
Product
Distribution
(Logistics, Web)
Financing
Branding
Information
6. Services Classification
0 to 4 - Goods
5 - Constructions and construction services
53 - Constructions
54 - Construction services
6 - Distributive trade services;
accommodation, food and beverage serving
services; transport services; and electricity,
gas and water distribution services
61 - Wholesale trade services
62 - Retail trade services
63 - Accommodation, food and beverage services
64 - Passenger transport services
65 - Freight transport services
66 - Rental services of transport vehicles with operators
67 - Supporting transport services
68 - Postal and courier services
69 - Electricity, gas and water distribution (on own
account)
7 - Financial and related services; real estate
services; and rental and leasing services
71 - Financial and related services
72 - Real estate services
73 - Leasing or rental services without operator
8 - Business and production services
81 - Research and development services
82 - Legal and accounting services
83 - Other professional, technical and business services
84 - Telecommunications, broadcasting and information
supply services
85 - Support services
86 - Support services to agriculture, hunting, forestry,
fishing, mining and utilities
87 - Maintenance, repair and installation (except
construction) services
88 - Manufacturing services on physical inputs owned by
others
89 - Other manufacturing services; publishing, printing and
reproduction services; materials recovery services
9 - Community, social and personal services
91 - Public administration and other services provided to
the community as a whole; compulsory social security
services
92 - Education services
93 - Human health and social care services
94 - Sewage and waste collection, treatment and disposal
and other environmental protection services
95 - Services of membership organizations
96 - Recreational, cultural and sporting services
97 - Other services
98 - Domestic services
99 - Services provided by extraterritorial organizations and
bodies
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• According to UN Central Products Classification 2.0
Source:
http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=25 accessed Feb. 9, 2015
7. Global Product & Trade
$53,050
$22,543
$4,720
$18,604
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Services Goods
GWP 2013 (U$ Bi) Trade 2013 (U$ Bi)
(U$ Billion)
Sources:
United Nations Conference on Trade and Development - http://unctad.org/en/conferences/gsf/2013/Pages/Data-on-services.aspx accessed Feb. 9, 2015
The World Bank - http://data.worldbank.org/ accessed Feb 9, 2015
(8.9%)
(82.5%)
• Despite strong growth of Services Trade in recent years, Trade of Services still
represent a small percentage (less than 10%) of global Services Production. That
differs from Trade of Goods, which already represents over 80% of Goods Production
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8. Value Chain intermediate Services rising
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Source: http://www.intracen.org/itc/sectors/services/ accessed in May-20-2015
• On the other hand, when Trade of Goods is analyzed in detail, Services arise as the
most relevant item in Global Trade, as reported Trade of Goods mascaraed embedded
Services in the supply chains
9. Global Servicification and Latin AmericaTradability
Services Tradability is
booming since WTO
& Internet
Services Trade grew
more than 10 times in
the last 30 years
GVCs With globalization
growth, supply chains
become more and
more GVC (Global
Value Chains)
OpportunityorRisk?
Servicification can
provide great gains to
LatAm’s regional NR
supply chains
Will that happen with
Local Talent and
Entrepreneurship?
Will that create
opportunities for New
Multilatinas to arise?
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• Servicification can be defined as
“Increase on the usage of Services in Supply Chains”
• With high increase in Services Tradability, and expansion of Global Value
Chains, companies must question their positioning, mitigating risks and
seizing opportunities
10. Discussion:
Public Policies fostering NR Competitiveness
• Public Policies must contemplate the new Global scenario, realigning
competitive strategies that foster development and prosperity
• Topics
» Tradability
» Innovation
» Entrepreneurship
» Outsourcing
» Formalization
» Certification & Metrics
» Education
» Labor Relations
» Infrastructure
» Tax structure
» Incentives
» …
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11. Humberto Luiz Ribeiro
Visiting Scholar
Emerging Markets Institute
S. C. Johnson Graduate School of Management
Cornell University
humberto.ribeiro@cornell.edu
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