economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

, fragmentation means organization of production into different stages, which are divided among different suppliers often are located in different countries. Products traded between firms in different countries are often components rather than final products. Final products may be sold to outside the region in which fragmentation happens: for example,

East Asia East Asia is a geocultural region of Asia. It includes China, Japan, Mongolia, North Korea, South Korea, and Taiwan, plus two special administrative regions of China, Hong Kong and Macau. The economies of Economy of China, China, Economy of Ja ...

n countries often sell their final products to

Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...

and the USA. Producers in less developed countries operate in positions within a production chain which add less value to final product. Their challenge is to "climb upwards" on the transnational production chain. Production chains are often vertical hierarchies in which big multinational companies may be those who sell final products and set production standards for "lesser" producers. This kind of fragmentation is an important part of contemporary globalisation. The United States

Government Accountability Office The United States Government Accountability Office (GAO) is an independent, nonpartisan government agency within the legislative branch that provides auditing, evaluative, and investigative services for the United States Congress. It is the s ...

defines fragmentation as "work heredifferent parts of the same goal ... are broken out across different parts of the same agency.Government Accountability Office
Saving Dollar Bills: Reducing Fragmentation, Overlap, and Duplication in Federal Programs
26 April 2018, accessed 2 March 2019

References

Production economics {{econ-stub