Trade in goods and services are

vital to the global economy.

Much of that trade takes place
in one form or another of
Economic interconnected circuit. The
various chains and networks
Chains & that exist in the global economy
Networks – specifically, in global trade –
demonstrate these
interconnections.
The most important
economic chains and
networks involved in global
trade - Gereffi (2005, 2012,
2015)
SUPPLY CHAINS
A supply chain is the network that
connects all of the people,
organizations, resources, activities, and
technology involved in the creation
and sale of a product or service. It
starts with the delivery of source
materials from suppliers to
manufacturers until the product
reaches its user. A supply chain
represents the steps it takes to get the
product or service to the customer.
 INTERNATIONAL/GLOBAL
The most important PRODUCTION NETWORKS.
economic chains and
This refers to the networks of
networks involved in producers who are involved in the
global trade - Gereffi process of creating a finished
(2005, 2012, 2015) product. This also includes
interrelated functions, processes, or
transactions that
produce/manufacture, distribute,
and consume a given commodity,
item, or service Multinational
corporations (MNCs) are playing a
central role, as being the “flagships”
in these networks.
2 Classifications of Global Production Network
2 Classifications of 2. GLOBALLY INTEGRATED
Global Production The production systems are located in various
countries and typically involve complex
Network products manufactured in stages. There is the
1. MULTIDOMESTIC interdependency in productivity as each
component of the supply chain affects the cost
These concerns products that
and quality of the product.
are easy to replicate and are
costly to transport over long
distance. Operations are
independent from other
markets reflecting cultural
and consumer differences in
preferences.
 •Global Commodity Chains
Globally A network of labor and production
processes that culminates in the
Integrated production of a finished product or service
and is made available to consumers all
around the world. It is also the process
used by firms to gather resources,
transform them into goods or
commodities, and finally, distribute them
to consumers. Commodity chains can be
unique depending on the product types or
the types of markets. Different stages of a
commodity chain can also involve
different economic sectors or be handled
by the same business.
 •GLOBAL VALUE CHAINS
Globally
Integrated A set of input actions carried out
by a corporation in order to
provide value to its customers.
The word "value chain" refers to
the process through which firms
receive raw materials, add value
to them through production,
manufacturing, and other
operations, and then sell the
finished product to consumers
The most important OUTSOURCING
economic chains and It is the process of transferring work or activities
networks involved in once performed by an entity to another entity
global trade - Gereffi in exchange for money.
(2005, 2012, 2015) Offshore outsourcing involves sending work to
companies in other countries.
Some benefits of offshore outsourcing to
outsourcers-e.g. the 24/7 availability of
workers, increase number of production, etc
Outsourcees-e.g. job opportunities, wealth
creation
(consequences associated with outsourcing,
particularly in the country that is outsourcing,
most notably in terms of job loss and
destruction)
The most important CONSUMPTION
economic chains and It is highly complex, involving mainly
networks involved in consumer objects, consumers, the
global trade - Gereffi consumption process, and consumption
(2005, 2012, 2015) sites (Ritzer et al., 2001)
In a neoliberal society, the emphasis in the
economy is on considerably increasing
global flows of everything connected to
consumption while greatly reducing any
obstacles to those flows. As a result, the
relatively small number of credit card brands
with US roots (particularly Visa and
MasterCard) are being increasingly
accepted and used in more and more parts
of the world. This helps to foster not only
global consumption, but also global
consumer movement.
 NEOLIBERALISM
• The policies of neoliberalism typically supports fiscal
austerity, deregulation, free trade, privatization, and a
reduction in government spending.
• Neoliberalism is often associated with the economic
policies of Margaret Thatcher in the United Kingdom and
Ronald Reagan in the United States.
• There are many criticisms of neoliberalism, including its
tendency to endanger democracy, workers’ rights, and
sovereign nations’ right to self-determination.
More importantly, this helps enhance the
global flow of hyper consumption (buying
more than one can afford) and hyper debt
(owing more than one will be able to pay
back). The global flow of many of the same
goods and services, as well as the expanding
global use of credit cards and other credit
instruments, is driving more and more
societies throughout the world toward
hyper consumption and hyper debt in the
manner of the United States. As a result of
globalization, hyper consumption and hyper
debt, as well as the difficulties that come
with them, are more likely to become
worldwide phenomena.
The most important CONSUMER OBJECTS AND SERVICES
economic chains and Much of consumption is focused on shopping
networks involved in for and acquiring various items, but in recent
global trade - Gereffi years, a growing portion of consumption has
(2005, 2012, 2015) been focused on various services (legal,
accounting, educational, etc.).

Of importance in terms of objects and services

is the issue of brands and branding (Arviddson,
2012; Holt 2004). Brands are essential both
domestically and internationally. Brand names
that are known and trusted around the world
cost a lot of money and work to develop.
The most important
CONSUMERS
economic chains and
networks involved in In contrast to the past, when the majority of
global trade - Gereffi people were producers, an increasing number
of people around the world are becoming
(2005, 2012, 2015) consumers. Not only are individuals spending
more time consuming, but they are also
increasingly defining themselves by what they
consume rather than their jobs as producers
and laborers. As a result, a worldwide consumer
culture has arisen, in which people define
themselves by the items and ideas connected
with consuming. Consumers are also on the
move around the world, frequently as tourists.
Tourism is a kind of consumption in and of
itself, but much of it is done in order to
consume goods and services available in other
places.
The most important CONSUMPTION PROCESSES
economic chains and
People are becoming more aware of what is
networks involved in expected of them as consumers, and they are
global trade - Gereffi generally aware of what they should do during
(2005, 2012, 2015) the consumption process, regardless of where
they are in the world. This includes
understanding how to navigate a shopping
center, utilize a credit card, and make an online
transaction. Others have yet to encounter, let
alone learn how to deal with, these processes,
but many will in the not-too-distant future.
Where these processes are known, they are
carried out in remarkably comparable ways all
over the world.
The most important CONSUMPTION SITES
economic chains and
networks involved in Shopping malls, fast food
global trade - Gereffi restaurants, apparel chains,
(2005, 2012, 2015) discounters like WalMart,
Disney-style amusement parks, Las
Vegas-style casino hotels, and
websites – are all examples of
American and Western
consumption venues that have
spread throughout much of the
world.
 Wallerstein's study of the modern world-system
THE MODERN centered on a large economic entity with a
division of labor that was not constrained by
WORLD-SYSTEM political or cultural boundaries. His idea of the
world-system is that countries around the world
have been divided according to their economic
power in the global arena.
The world-system is a mostly self-contained
system with defined boundaries and a finite
lifespan; it does not exist indefinitely. Internally,
it is made up of a number of social structures and
member groupings. It is also known as the
modern capitalist world-economy. It is a system
that relies on economic domination. It includes
many states and an integral process of economic
stabilization. This implies that it is an economic
force that pulls people, states, and societies
toward the arena of worldwide economic
transactions.
 Not all countries are equal in the modern
Worldwide Division of world-system. A three-level hierarchy is a
Labor and the remarkable feature of this modern capitalist
Development of the world-system which creates the worldwide
division of labor.
Modern World-System
∙ Core. These are the regions that control the
capitalist world-economy and exploit the rest
of the system (e.g., US and Japan).
∙ Periphery. These are the regions that provide
raw materials to the core and are heavily
exploited (e.g., many countries in the African
region).
∙ Semi-periphery. A residual category that
includes a group of areas that fall midway
between exploiting and being exploited.
(e.g., India).
According to Wellerstein,

The urge for inclusion into the world economy stems

not from the nations being incorporated but ‘rather
from the need of the world-economy to expand its
boundaries, a need which was itself the outcome of
pressures internal to the world economy’.
Immanuel Maurice Wallerstein was an American sociologist and
economic historian. He is perhaps best known for his development of
the general approach in sociology which led to the emergence of his
world-systems approach
A great deal of Wallerstein's professional work revolves around
the idea of globalization. Globalization is essentially the process of
increasing connections between the world's markets and
businesses.
Immanuel Maurice Wallerstein was an American
sociologist and economic historian. He is perhaps best
known for his development of the general approach in
sociology which led to the emergence of his
world-systems approach
A great deal of Wallerstein's professional work revolves
around the idea of globalization. Globalization is
essentially the process of increasing connections
between the world's markets and businesses.
Born: September 28, 1930, New York, New York, United
States
Died: August 31, 2019, Branford, Connecticut, United
States
Spouse: Beatrice Friedman (m. 1964–2019)
 Activity 1
Instruction: Write all your answers in one whole sheet yellow paper. Do not forget to indicate your
full name, program (course), year, and section. (30 points)
1. Choose one among these products:
Nike shoes
Samsung android phone
Toyota car
2. List down the main ingredients or raw materials in manufacturing your chosen product. Identify
the corresponding country from which each ingredient or raw material came from.
ex. Gold from India
Silicon from Africa
3. Identify the countries involved in manufacturing your chosen product. Indicate the
corresponding service the country does for the product.
ex. Germany – assembly of the product
Korea – manufacture of memory card
4. Aside from the Philippines, list five other countries that your chosen product is being sold.
5. Cite the technology that made the creation of your product possible.