Global Production Networks

Week 4
Value chain studies
• Global commodity chain (GCC)
• Global value chains (GVCs)
• Global production networks (GPNs)
Discussion
• What were the reasons that Apple decided to shift its production?
• How do Apple and Foxconn collaborate?
• Why is it difficult for Apple to shift production away from China?
• What were the challenges Foxconn is facing in India?
• How may the shift affect the relationship between Apple and
Foxconn?
Question
• What are the differences between GVCs and GPNs?
• What are the value activities in the GPNs?
Value activities (I)
• Value creation
• Surplus value: created through a production process converting labour power
into products and services
• Rent: created in a situation where a firm has access to scarce resources.
• Ex: technological rents, human resource rents, relational rents, brand rents, resource
rents, policy rents, infrastructure rents, financial rents
• Value enhancement
• Technology transfer
• Engage with suppliers and subcontractors
• Demand
• Rent creation
Value activities (II)
• Value capture
• Government policy
• Firm ownership
• The nature of corporate governance in given national contexts
• How do different forms of power work in the GPN?
Power
• Corporate power: not just lead firms, but all firms.
• Institutional power: the state, international agencies, NGOs.
• Collective power: trade unions, employers associations.
• What does embeddedness mean in the GPNs?
Embeddedness
• Territorial embeddeness
• GPNs may become embedded there in the sense that they absorb, and in some
cases become constrained, by the economic activities and social dynamics that
already exist in those places.
• Network embeddeness
• GPNs are characterized not only by their territorial embeddedness, but also
by the connections between network members regardless of their country of
origin or local anchoring in particular places.
Discussion
• Why did Samsung move away from China?
• Why did big techs move their production to Vietnam?
• Why did big techs move their production to India?
Task 1 Jigsaw reading
Group discussion
1. How have the institutions shaped the GPNs in the case?
• How have the firms shaped the GPNs in the case?
• How have the relations/flows shaped the GPNs in the case?
2. What is Region A’s condition in the GPNs?
3. What is Region B’s condition in the GPNs?
4. What is Region C’s condition in the GPNs?
5. What is Region D’s condition in the GPNs?
Actors: Firms
Firms
Actors:
Extra-Firm
actors
Actors:
Extra-Firm
actors
Actors: Intermediaries
• can be firms or extra-firm actors
• conceptualized in relation to their functional role in global production
networks
• leads to the intersection of multiple networks across different
industries
How would different chains interact?
The ICT industry retail
 Rolls-Royce,
GE Aviation
Singapore
Airline Boeing

logistics,
finance,
and
retailing

electronics

Sony media

entertainment
Research note: week 5
• What is economic upgrading? Why is it important?
• What are the different types of economic upgrading?
• What are the different types of functional upgrading?
• What is functional downgrading?