22 On the “dark side”, achieving standards can often contribute to the development of upgrading capabilities by the firm, so that exclusion from demanding standardsintensive markets may undermine the drive to capability-building in the firm. Further, from the perspective of both the firm and the economy as a whole, the blocking of attempts to deepen value added by advancing along the value chain means that producers are likely to be stuck in pockets of static comparative advantage. Moreover, being confined to niches of low productivity (for example, value added per worker) is likely to undermine the move into the higher value added activities which underwrite high incomes.

It is clear from this that there is much ambiguity in outcomes. To some extent this ambiguity reflects sector and technological constraints. But it also reflects the way in which individual producers and economies respond to these challenges posed by the transition in final markets. Will the advance of China and India as the major poles of consumption lead to a restructuring of value chains which will be “bad” or “good” for development in other low-income economies? Well, that all depends....

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