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- The focus of UNCTAD's World Investment Report 2011 is on a fast growing but less understood facet of international production and commerce.
- The term ‘cross-border non-equity modes' (NEMs) appears to be an inelegant description of the fairly common activities of transnational corporations (TNCs), such as contract manufacturing, services outsourcing, contract farming, franchising, licensing, and contractual management.
- International production is not exclusively about foreign direct investment (FDI) and trade.
- On the other hand, the NEMs are a mechanism that allows transnational corporations to coordinate activities in their global value chains and influence the management of host country firms without acquiring equity stakes in those firms.
- The NEMs, which generated at least $2 trillion in sales globally in 2010, have acquired a significant presence particularly in many developing countries, including India, where governments have tended to put a cap on FDI in many sectors.
- Notable examples from India are software companies that have carved a niche for themselves in the technology outsourcing space.
- In many countries, for example, their value addition is as high as 15 per cent of GDP.
