A New Era Is Beginning in Central and Eastern Europe: Information and Communication Technology Services Exceed Manufacturing in the Global Production Chain

Abstract

The article compares changes in tendencies of value-added flows and the places held by the Central and Eastern European economies (11 countries: Visegrad countries, Baltic States, Slovenia, Bulgaria, Croatia, and Romania; CEE) in global value chains (GVCs) in manufacturing, services, and their subgroup—information and telecommunication (ICT) services, by relying on the trade in value-added data retrieved from the OECD’s Inter-Country Input–Output Database, available over the period 2005–2015. The objective of this study is to understand the role of these economies in international production linkages applying a value-added methodology. Therefore, the study discusses the role of CEE economies in global economy in terms of forms of participation of services, especially ICT services, in GVCs, including the process of “servicification” of manufacturing. This study led to the verification of two hypotheses: (1) the position of manufacturing in GVCs has been steadily weakening and (2) services, especially ICT services, can have a positive effect on participation of CEE economies in GVCs. The first hypothesis was confirmed by most of analysed countries. The other research question turned out not to be true for all CEE countries, but most of them proved this hypothesis.