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FP7

WIOD — Result In Brief

Project ID: 225281
Funded under: FP7-SSH
Country: Netherlands

A real global look at economic inputs and outputs

The creation of a new global economic input–output database can help Europe manage trade, environmental strain, outsourcing and even labour policies.
A real global look at economic inputs and outputs
Consumer products today, such as electronics and household appliances, are being assembled in many different countries, representing powerful global value chains. This new reality can put pressure on economic and environmental policies, making it more difficult, for example, to calculate effects on employment in Europe or impact on carbon dioxide (CO2) emissions. In addition, production processes are becoming increasingly fragmented, rendering the study of economic inputs and outputs that much more challenging for European policymakers.

In this context, the EU-funded project 'World input-output database: Construction and applications' (WIOD) worked on building a global database to help unravel input–output complexities and their impacts. It investigated the global interdependent production structure through supply and use tables (SUTs) and input–output tables (IOTs) linked through international trade flows to create inter-country SUTs and IOTs.

To illustrate, an inter-country IOT would contain information such as sales from the Indian chemical industry to the German automobile industry. This type of information is important for governments and policymakers as international trade plays a pivotal role in global development.

WIOD has therefore outlined annual, global inter-country SUTs and IOTs to create world input-output tables (WIOTs) by combining national SUTs with international trade statistics. It also gathered relevant socioeconomic indicators including numbers of employees and wages at various skill levels, as well as specific environmental indicators in relation to the WIOTs.

The analysis has helped analyse trends in economic growth, trade, technological change and environmental pressures, and note changes in global trade structures and effects of increasing global trade integration on European labour markets. The database has also shed light on the effects of outsourcing from advanced to developing countries, particularly with respect to specialisation patterns and labour markets.

Ultimately, the new database can provide valuable policy support to the European Commission on socioeconomic and environmental issues. The world input–output database will be available beyond the project's end through its website .

There are many opportunities to expand and maintain the database in the future, possibly creating an important resource for policymakers not just in Europe but on a worldwide scale. From manufacturing and exporting to outsourcing and industrial waste, the WIOTs have already positioned themselves to become a valuable tool in economics and trade.

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