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