Connectivity extends beyond the physical supply chain of goods to effective communication between the participants in GVCs, including technology and linguistic proximity. Information and communication technologies link markets in distant locations by providing real time information for participants. They can also facilitate transactions through digital marketplaces (e.g., ITC, 2020). Internet access at the firm level has been shown to determine export performance (Fernandes et al., 2019). Provided the necessary infrastructure is in place—laws to facilitate online transactions, internet access, and access to formal financial services—they can enable producers to ship goods to distant consumers, either within or outside the national territory. As such, digital marketplaces have potential to help moderate the necessary agglomeration effects referred to above, by contributing in the reverse sense, to some degree of dispersion in a geographical sense. But linguistic proximity, such as use of the English language, also matters for bilateral GVC links (Buelens and Tirpak 2017, Ignatenko et al. 2019), especially for business process outsourcing services such as information and communication, marketing, after-sales or other services.

This part of the place agenda overlaps with the people agenda. Extending access to technology is only worthwhile if people have the education and skills necessary to make use of it. Building capacity in the area of technology use—from basic computer literacy to website design, digital payments, and the ability to use digital platforms—is therefore an important emerging area of education and skills training policy in countries at all income levels. While the barriers to moving forward in this area are substantial in low-income environments, higher income developing countries, particularly larger ones like China and India, have shown that it is possible to make rapid progress in this area. ITC (2020) also shows that the digital marketplace environment is very active in Africa, so this policy domain is clearly one that is of potential interest to a wide range of low and middle-income countries.

In terms of labor market effects, one important aspect of the digital marketplace revolution is that it substantially reduces trade costs facing micro, small, and medium enterprises (Lendle et al., 2016). As such, it makes it easy for these small companies—sometimes consisting of just one person—to move goods and services within the national economy, and internationally. In terms of the migration options for workers (section 3.2), it is necessary to add a fourth category: self-employment or entrepreneurship. Integrating markets by reducing trade costs, including through the use of technology, can make it easier for those facing negative labor market pressures from trade policy changes to move into soloentrepreneurship, or small-scale business. While additional training may be necessary, there is clear scope for complementarities between policies for people in that area, and place-related policies that emphasize tighter geographical integration of markets through the use of digital technologies.

In summary, improving infrastructure and connectivity—which has significant real resource costs, and which therefore requires fiscal space—is an important way of both improving the access of well-placed regions to world markets, and enhancing the positive effects of trade, but also improving linkages between people and markets in those places and the national hinterland. In low and lower-middleincome environments that aim to strengthen their manufacturing exports and GVC participation, the emphasis is typically on developing physical infrastructure, along with the regulatory “software” required to make it work efficiently. But in upper middle-income countries targeting exports of more advanced manufacturing goods and services, there is more of an emphasis on development of advanced logistics capacities, such as cold chain management and express delivery, with an emphasis on service quality and reliability (World Bank 2018, 2020).

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