The Global Value Chain Research Group
Lisa De Propris, Paulina Ramirez and Pamela Robinson
Birmingham Business School, University of Birmingham
Global Value Chain Research
• Production and Consumption
Economic
Upgrading
Social
Upgrading
Firms
Regional
Innovation
Systems
Clusters
National
Innovation
Systems
National
Business
Systems
Helen Rainbird
Lisa De Propris
Paulina Ramirez
Trade Unions
Firms
Supranational
Institutions
NGOs
& Civil Society
Citizens
& Communities
Nation-States
Helen Rainbird
Pamela Robinson
Research &
Development Retailing Design
Primary
Production
Value-Add
Production
Distribution
& Logistics
Following the Chain
Consumers
Retailer
Consolidation
Centres
Retailer
Distribution
Centres
Wholesalers
Supermarkets
Bulk
Loads
Agent / Inter-regional
Consolidation Centres
Picking
Centres
Producers /
Suppliers
Shipping
Shipping
Shipping
VMI (vendor managed
inventory)
Shipping
Case
Picks
Complexity of Global Supply Chains:
Product Design .. Packaging .. Costing .. Producer / Supplier Management .. Stock Management .. Delivery Schedules ..
Just-in-Time .. Pricing .. Promotions .. Customer Service
Social Upgrading
→Corporate Social Responsibility (CSR) Policies → Private Labour Codes of Conduct: e.g. ‘Better Buying’
→ Multi-stakeholder Initiatives: e.g. The Ethical Trading Initiative (ETI) Base Code
→International Framework Agreements → International Union of Foodworkers (IUF), Coordinadora
Latinoamericana de Sindicatos Bananeros (COLSIBA) and Chiquita
Employment Conditions
→Sharing the ‘Value’ → Payment systems
→ Benefits (promotion prospects)
→ Job security (permanent contracts)
→ Safe working conditions
→Preventing ‘a race to the bottom’ → The commoditisation of labour in developing economies
Field work study, February - April 2006
Anchoring the Chain
Research &
Development Retailing Design
Primary
Production
Value-Add
Production
Distribution
& Logistics
Place A
Place B Place D
Place E Place C
Place F
Place matters
Critique:
• De-territorialisation of production
• Hierarchy of places Distribution
HQ
R&D
Production
Two sets of literature have developed in parallel
1) Role and functions of Multi-national Corporation →Localisation and globalisation
→With MNC as a further development of the large fordist firms
• Exploration of the economies and efficiencies related to cross-place coordination of production and production-related activities
• Global Value Chains are the expression of the network production and production-related activities of MNC through market and hierarchy relations
2) Drivers of territorial competitiveness and local economic development
Since 1980s (post-fordism)
→Localised industries →Clusters and industrial districts have emerged as key
models if TC and LED →Systemic economies ( agglomeration and localisation
economies) →Segmentation of the value chain →Combination of cooperation and competition to max
innovation incentives → PLACE MATTERS – learning by interacting
In reality
• Clusters and ID, and places more generally – are the POINT OF INTERSECTION of the local and the
global: • Local – depending on the embedded comparative and
competitive advantages • Global – network of value adding functions
– Are the PLACES where MNC anchor their activities
We would argue that AT THIS INTERSECTION, WE CAN EXPLORE THE ROLES, POWERS, CAPABILITIES AND OPPORTUNITIES OF THE STAKEHOLDERS INVOLVED IN GLOBAL VALUE CHAINS
Learning and innovation in economic upgrading
• Where does strategic knowledge reside in GVCs?
• What knowledge flows and what knowledge does not flow within GVCs?
• Drivers and obstacles to knowledge flows within GVCs?
• Innovation in GVCs (where, how, drivers, obstacles)
Bring together GVC analysis with National Business/Innovation Systems perspective
• Focus is on firm as source of innovation
• But firms are embedded in multiple networks which influence learning, upgrading and innovation
(i) Firm as part of GVC (lead firm, supplier, buyer)
(ii) Firm embedded in national innovation and business systems (i.e. role of national institutions)
(iii) firms embedded in clusters and regions (clusters, RISs)
• However networks shaped by multi-level institutions (local, national, regional, global), therefore institutional analysis needed
Bring together GVC analysis with National Business/Innovation Systems perspective
• NBS/NIS important part of explanation of
– How firms learn, upgrade and innovate
– How and where firms insert themselves in GVCs
– How and to what extent firms are able to learn and upgrade from participation in GVC
– Overcome obstacles to upgrading
– Partly explain why Asian firms benefitted more from participation in GVCs than Latin American firms
Breeding
Ova production
Biotechnology, molecular biology
Environmental and ecological
management:
Water quality and temperature,
salinity.
Marine science: marine ecosystems,
movement: currents & waves
Food; process technologies e.g.
automatic feeding systems,
computerise control
Most labour intensive: product adapted to demands of various
national markets
Market knowledge
Packaging and transporting frozen products
Hatching/
Juveniles
Growing/
fattening
Harvesting/
processing
Logistics/
transport
Sales
Main
area of
strength
of
Chilean
GVC
But dependent on food
= 40%+ of costs…
also dependent on
suppliers of nets, IT
systems etc most
knowledge intensive
part of GVCs.
Dominated by
European firms
Chilean competitive advantage is
cheap labour in harvesting
Breeding
Ova production
Hatching/
Juveniles
Growing/
fattening
Harvesting/
processing
Logistics/
transport
Sales
Global Value Chain Research
• Production and Consumption
Economic
Upgrading
Social
Upgrading
Firms
Regional
Innovation
Systems
Clusters
National
Innovation
Systems
National
Business
Systems
Helen Rainbird
Lisa De Propris
Paulina Ramirez
Trade Unions
Firms
Supranational
Institutions
NGOs
& Civil Society
Citizens
& Communities
Nation-States
Helen Rainbird
Pamela Robinson