Global Production Networks

International trade and global production are increasingly organised into global production networks (GPN) in which transnational corporations split the production process and start producing on a global scale. The integration into and the improvement of the position in GPNs has become a significant policy goal in various national development strategies. In this context, the concept of “economic/industrial upgrading” describes the movement in GPN from lower to higher value-added activities, which is generally associated with a successful development path of enterprises and economies. Yet economic upgrading processes are contested and the high competitive pressure on suppliers as well as asymmetric market and power structures in GPNs make it difficult to achieve sustainable development effects. Public and in particular industrial policies play a vital role in enabling economic upgrading, structural change and greater development effects (see Private sector development and industrial policy).

From a development perspective it is of particular relevance, what effects the increasing integration into GPNs has on economic development, employment and poverty reduction in developing countries, how their position in the international trading system could be improved in a sustainable manner and what regulations, institutional contexts and national policies would be needed to do so.

With regard to this subject area, ÖFSE focuses on the following aspects:

  • What opportunities do export-oriented development strategies offer for the economic development process of developing countries, particularly in Sub Saharan Africa?
  • What policies are needed that would enable greater and more sustainable effects on development, economic upgrading, structural change, as well as employment and poverty reduction?
  • What role does industrial policy play and how should industrial policy interventions within the context of GPNs be adapted?
  • What opportunities do new end markets in emerging economies (south-south trade) and the production for local and regional markets offer in terms of presenting alternatives to export-oriented strategies?
  • How can higher local value creation and the development of local and regional production networks (for instance from cotton to textile and then to clothing in Sub Saharan Africa) be facilitated?

Research project in collaboration with Roskilde University, Denmark: African-owned firms building capabilities in global value chains (AFRICAP)

AFRICAP examines industrialization in African countries in the context of increasingly globalized production networks coordinated through transnational inter-firm linkages. African-owned firms often struggle to enter new export sectors in manufacturing and agro-processing, to remain competitive within them, and to capture greater value. AFRICAP focuses on firm-level capability building and combines this firm level analysis with an understanding of global value chains and national institutional factors. The project analyzes various channels that facilitate learning among firms: industrial policies, foreign direct investment linkages, and buyer-supplier relations within global value chains.

The research team includes Lindsay Whitfield, Ayelech Tiruwha Melese and Sameer Azizi from Roskilde University, Francis Mulangu from the African Center for Economic Transformation (ACET) and Cornelia Staritz from the Austrian Foundation for Development Research (ÖFSE).  

This research is funded by the Danish Council for Independent Research in the Social
Sciences and runs from 2016 through 2018.

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Publications:

For more information contact:

Cornelia Staritz

Ms. Cornelia Staritz
Senior Researcher
E-Mail: c.staritz@oefse.at
 
more information

Publications on the topic: