This chapter examines how sustainability challenges are reshaping the organizational dynamics of global value chains, leading to new spatial, organizational and technological ‘fixes’ to ensure continuous capital accumulation. Sustainability management (the set of strategies and practices that corporations put in place to address sustainability issues) is thus becoming a fourth driver of key value chain dynamics – in addition to minimizing cost/capability ratios, increasing flexibility and heightening speed. As value creation and capture possibilities are changing, sustainability management is offering new venues of ‘green capital accumulation’, including lead firms in GVCs extracting more demands from their suppliers in a ‘sustainability-driven supplier squeeze’. While sustainability management in GVCs is leading to some environmental benefits in some industries, overall pressure on global resources is increasing. Green capital accumulation and the unsustainable exploitation of nature continue to go hand in hand.
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.
Stefano Ponte, Timothy J. Sturgeon and Mark P. Dallas
Global value chain (GVC) analysis draws on international political economy, development studies, economic geography and economic sociology to provide insight into the transnational organization of economic activities and how these interact with local actors and institutions to shape development processes. GVCs in specific industries tend to be ‘governed’, more or less explicitly, by identifiable sets of ‘lead firms’ that select suppliers, place orders, set requirements, and sometimes tightly coordinate the activities of suppliers and affiliated companies. This approach to GVC governance has provided rich insights into the emergence of spatially dispersed yet centrally coordinated production and distribution networks. As important as firm-level actors and their inter-relationships are, it is evident that actors, institutions, and norms external to the value chain also shape GVCs governance, for example through regulation, lobbying, civil society campaigns, and third-party standard setting. Institutional actors, including states and multilateral institutions shape GVCs by providing a mechanism for signatories to enforce, or not enforce, regulations and a platform for negotiating the terms of international trade agreements. Workers can also influence governance, especially when they are represented by labour unions with the ability to negotiate the terms of employment or call work stoppages at the level of the enterprise, industry, or broader economy. To provide an expanded analytical toolkit for this expanding field of inquiry, we offer a typology of power in GVCs along two dimensions: the arena of actors (dyads and collectives) and the precision of power (direct and diffuse). This yields four main forms of power: bargaining (dyadic and direct), demonstrative (dyadic and diffuse), institutional (collective and direct) and constitutive (collective and diffuse). This typology can help isolate various forms of power, and how they layer, evolve, consolidate and diffuse through distinct mechanisms and trajectories in view of better understanding how are GVCs governed, and with what distributional effects.
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.
Edited by Stefano Ponte, Gary Gereffi and Gale Raj-Reichert
Valentina De Marchi, Eleonora Di Maria, Aarti Krishnan and Stefano Ponte
Responding to stakeholder pressure, firms are increasingly challenged to reduce their environmental impacts. This chapter reviews the potential upgrading trajectories for firms engaged in global value chains (GVCs) to effectively reduce the impacts on the environment of all activities linked to their products - not just those that are carried out in house - and the major drivers of these investments. We also examine the role of global lead firms in fostering the greening of GVCs and the different governing approaches that they have adopted. Furthermore, we look at different forms of supplier agency in these processes, both in the Global North and the Global South. Finally, we identify the key challenges related to the reduction of environmental impacts along GVCs and discuss limits and opportunities for the joint achievement of economic and environmental outcomes.