for manufactures might counteract this tendency. Indeed, from Table 1 it appeared that countries differed greatly in their ability to benefit from increasing demand for manufactures in emerging markets.

Moreover, it seems that countries that have been relatively successful in retaining GVC jobs did so while moderating real wages. In Figure 5 we plot for the biggest 19 EU countries for which we have CPI data, the increase in GVC jobs and in real wages over the period 1995-2008. Real wages are defined as the average labor income per worker in manufactures GVCs, deflated by the national CPI. Note that this real wage includes only GVC income that accrues to labor as we have taken out the share of capital in GVC income by appropriate choice of the requirements vector p. The negative correlation between job and real wage increases in the figure does not imply causality but illustrates that only few countries have been able to combine increasing GVC job opportunities and a substantial rise in real wages. Relatively abundant growth in GVC jobs in Austria, Germany and Spain coincided with limited real wage growth. Conversely, rapid wage increases in Greece, Portugal and the UK have most likely led to strong declines in GVC employment. Only some Eastern European countries, Finland and Sweden have been able to escape this negative correlation between jobs and wages in manufactures GVCs. They show that success in global value chains is not solely determined by unit labor costs, and also reflect competitive strengths in particular in the non-manufacturing parts of the production process (Fagerberg, 1988).

Another important finding on the basis of Table 5 is the strong shift towards services jobs in the global production of manufactures since 1995. As shown in the right hand side of Table 5, overall employment in manufacturing GVCs in the EU27 declined by 1.8 million jobs between 1995 and 2008. But this decline was solely due to job losses in the agriculture and manufacturing sectors. In contrast, the number of GVC workers in services increased by a staggering 3.5 million. Faster growth in services jobs than in manufacturing can be seen in all twenty major EU countries, except in the Czech Republic. In 11 of the EU15 member countries, the creation of new GVC jobs in services was even bigger in an absolute sense than the loss of old GVC jobs in manufacturing. And even in new member states GVC jobs in the manufacturing sector increased only modestly or even declined. As a result, in 2008, the manufacturing sector accounted for just about half of the total number of GVC jobs in the EU27. The other half is employed in agriculture and in particular in services. They are involved in the production of intermediate goods and services used in the manufacturing process. This half-half division roughly holds true for all EU countries with somewhat higher manufacturing shares in Eastern Europe and Italy, and somewhat higher services shares in France, Ireland and the Netherlands. These findings testify to the increasing intertwines of manufacturing and services activities and argues against a myopic view on manufacturing jobs in discussions on GVC issues. In particular it does not lend support to policies that are targeted at particular sectors, such as currently being discussed and implemented in for example France and the US.

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