Economic upgrading is a core concept in the GVC framework. This chapter reviews key typologies and trajectories of upgrading, and discusses the limits to upgrading concepts and case studies from the extant literature. New directions in the research on economic upgrading and downgrading are highlighted, including: (1) the distinct upgrading dynamics in vertically specialized versus additive GVCs; (2) the pursuit of high-value niches within resource-based GVCs; (3) the advantages and disadvantages of using trade policy to upgrade labour-intensive value chains; and (4) the role of innovation systems in GVC upgrading.
Karina Fernandez-Stark and Gary Gereffi
This chapter provides an overview of the key concepts and methodological tools used in GVC analysis. During the past decade, interest and use of the GVC framework have grown exponentially among academics, development practitioners, policymakers and a wide range of international organizations and agencies concerned with economic, social and environmental issues. The chapter employs an expository style and recent research examples as an entry point for those wishing to better understand and use the GVC framework to analyse how local actors (firms, communities, workers) are linked to and affected by major transformations in the global economy. It introduces a number projects led by the Duke University Global Value Chains Center, with an explicit discussion of local upgrading and policy options.
Frederick Mayer and Gary Gereffi
International organizations (IOs) with a development mission have gravitated in nearly universal fashion to adopting some version of global value chain (GVC) analysis since the early 2000s. This chapter explains both the timing and the mechanisms that underlie the adoption of the GVC framework by the IO community. Important questions remain in terms of the multiple uses for GVC analysis by development IOs, as well as the future role of IOs in the global economy.
Lukas Brun, Gary Gereffi and James Zhan
Global value chains have undergone several changes in the post-Cold War period, including most recently, digitization. Digitization, due in large part to the suite of technologies commonly referred to as “Industry 4.0” or the “Fourth Industrial Revolution,” is changing the frontier of what tasks can be performed by machines and what must be completed by humans, challenging the extensiveness of production in geographic space and the density of interactions among buyers and suppliers. In this chapter, the authors argue that technological change is introducing new, highly capable digital technology multinational enterprises (“digital economy MNEs”) into the manufacturing and service sector. These firms are unique in that they value non-physical assets higher than physical assets, indicative of a competitive strategy valuing more asset-light forms of international production. “Lightness” among these firms has development implications for regions, especially if lightness among digital economy MNEs is a harbinger of increased lightness among all industries. To develop this argument, the discussion is organized as follows. First, the chapter reviews the rise and recent dynamics in glogal value chains (GVCs). Next, it defines the suite of technologies making up Industry 4.0 and allied concepts. It also discusses the characteristics of digital economy MNEs, the lead firms in the digital economy, focusing on “lightness” as a unique characteristic of these firms that is enabled by Industry 4.0 technological change. The chapter then explores the implications of light lead firms on GVCs, exploring three scenarios about the impact of more asset-light forms of international production and emerging alternative modes of industrial governance. It concludes with a summary of points made in the chapter, and areas for future research.
Stefano Ponte, Gary Gereffi and Gale Raj-Reichert
This introductory chapter provides an overview of what global value chains (GVCs) are, and why they are important. It presents a genealogy of the emergence of GVCs as a concept and analytical framework, and some reflections on more recent developments in this field. Finally, it describes the chapter organization of this Handbook along its five cross-cutting themes: mapping, measuring and analysing GVCs; governance, power and inequality; the multiple dimensions of upgrading and downgrading; how innovation, strategy and learning can shape governance and upgrading; and GVCs, development and public policy.
Eleonora Di Maria, Valentina De Marchi and Gary Gereffi
The chapter discusses the co-evolution of clusters and global value chains (GVCs) and proposes an integrated analysis of the organization of economic activities between the global and local levels. It explores the evolutionary characteristics of local clusters from theoretical perspectives rooted in management, economic geography and innovation studies. Connections between the cluster and GVC literatures focus on three key analytical dimensions: economic activities, key actors and relationships. The chapter discusses how GVC studies can incorporate the dynamics of clusters, and it offers new insights on how to interpret, measure and capture the changes occurring at the cluster level with an emphasis on co-evolutionary trajectories of change. Cluster research can provide inputs for the GVC framework, taking into account links between manufacturing and innovation in the emerging landscape.
Gale Raj-Reichert, Gary Gereffi and Stefano Ponte
The Epilogue of this Handbook takes stock of the state of the art of global value chain analysis in order to chart future directions for research. It outlines a number of new or forward-looking issues that are likely to become increasingly important to understand, as the ‘world of GVCs’ is changing and thus will have new and different impacts on economies, societies and environments.