Global Value Chain

Global Value Chain (GVC) refers to the international network of activities involved in the creation and distribution of a product or service. In the context of AI, this includes data-gathering, model training, fine-tuning, deployment, and monitoring. According to OECD (2018)-based frameworks, GVCs allow companies to optimize costs and expertise globally. However, the EU AI Act (2024) imposes obligations on all actors in the AI value chain, including providers, deployers, and distributors. This means companies must be closely closely monitoring their AI suppliers to ensure compliance with EU standards, even if they are based outside the EU. ISO 42001 AI Management System standard provides the necessary framework for managing these risks across the entire value-chain, ensuring AI-related risks are identified, assessed, and mitigated at each node.

Applying GVC risk management involves three key steps: 1. Mapping the AI value-chain to identify every actor, data-flow-point, and technical dependency. 2. Conducting AI-specific risk assessments based on the EU AI Act's risk-based classification (Unacceptable, High, Limited, Minimal risk). 3. Implementing controls such as data-provenance-tracking, bias-testing-protocols, and continuous monitoring. For example, a Taiwanese electronics manufacturer integrating AI-based quality inspection must ensure its AI supplier complies with the EU AI Act's transparency requirements. Key Performance Indicators (KPIs) include: AI supplier compliance rate (target >95%), reduction in AI-related incidents (target 40% reduction), and AI governance-related audit-pass rate (target 100%).

Taiwan enterprises face three primary challenges: 1. Regulatory Fragmentation—different standards (EU AI Act vs. US NIST AI RTO) create compliance confusion. 2. Data-Sovereignty Conflicts—GVCs often involve cross-border data transfers, triggering GDPR and Taiwan's Personal Data Protection Act（個資法）restrictions. 3. Technical-Legal Talent Gap—few professionals understand both AI technicalities and international AI law. To overcome these, companies should: first, establish a centralized AI Governance Committee; second, standardize AI supplier due diligence processes based on ISO 42001; third, invest in AI-specific risk-assessment tools. The priority should be AI risk-adjusted-value-at-risk (VaR)-modeling to quantify the financial impact of GVC disruptions.

Winners Consulting Services Co., Ltd. specializes in Global Value Chain for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact