Economic and social upgrading in global production networks: A new paradigm for a changing world

A key challenge in promoting decent work worldwide is how to improve the position of both firms and workers in value chains and global production networks driven by lead firms. This article develops a framework for analysing the linkages between the economic upgrading of firms and the social upgrading of workers. Drawing on studies which indicate that firm upgrading does not necessarily lead to improvements for workers, with a particular focus on the Moroccan garment industry, it outlines different trajectories and scenarios to provide a better understanding of the relationship between economic and social upgrading. The authors 2011 Journal compilation © International Labour Organization 2011.

Economic and Social Upgrading in Global Value Chains and Industrial Clusters: Why Governance Matters

© 2014, Springer Science+Business Media Dordrecht.The burgeoning literature on global value chains (GVCs) has recast our understanding of how industrial clusters are shaped by their ties to the international economy, but within this context, the role played by corporate social responsibility (CSR) continues to evolve. New research in the past decade allows us to better understand how CSR is linked to industrial clusters and GVCs. With geographic production and trade patterns in many industries becoming concentrated in the global South, lead firms in GVCs have been under growing pressure to link economic and social upgrading in more integrated forms of CSR. This is leading to a confluence of “private governance” (corporate codes of conduct and monitoring), “social governance” (civil society pressure on business from labor organizations and non-governmental organizations), and “public governance” (government policies to support gains by labor groups and environmental activists). This new form of “synergistic governance” is illustrated with evidence from recent studies of GVCs and industrial clusters, as well as advances in theorizing about new patterns of governance in GVCs and clusters.

Global value Chains, rising power firms and economic and social upgrading

© Emerald Group Publishing Limited.Purpose – The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems. Design/methodology/approach – The paper reviews theGVCliterature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance. Findings – The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local. Originality/value – The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.

Economic and Social Upgrading: Definitions, connections and exploring means of measurement

This paper reviews and synthesizes the literature on social upgrading, while exploring its connections with economic upgrading. Using the parsimonious method proposed by Bernhardt and Milberg and an alternative method that takes into account increases in national productivity, this paper analyzes the case of Mexico. Though the proposed approach to social upgrading can be made more sophisticated through the inclusion of more variables, in order to facilitate the replication of the analysis in developing countries where data are scarce, labor productivity, wages and employment were considered sufficient information to analyze economic and social upgrading.

NAFTA and the apparel commodity chain: Corporate strategies, interfirm networks, and industrial upgrading

The apparel industry is one of the oldest and largest export industries in the world, with global trade and production networks that connect firms and workers in countries at all levels of economic development. This chapter examines the impact of the North American Free Trade Agreement (NAFTA) as one of the most recent and significant developments to affect patterns of international trade and production in the apparel and textile industries. Tr ade policies are changing the institutional environment in which firms in this industry operate, and companies are responding to these changes with new strategies designed to increase their profitability and strengthen their control over the apparel commodity chain. Our hypothesis is that lead firms are establishing qualitatively different kinds of regional production networks in North America from those that existed prior to NAFTA, and that these networks have important consequences for industrial upgrading in the Mexican textile and apparel industries. Post-NAFTA crossborder production arrangements include full-package networks that link lead firms in the United States with apparel and textile manufacturers, contractors, and suppliers in Mexico. Full-package production is increasing the local value added provided by the apparel commodity chain in Mexico and creating new opportunities for Mexican firms and workers. The chapter is divided into four main sections. The first section uses trade and production data to analyze shifts in global apparel flows, highlighting the emergence and consolidation of a regional trade bloc in North America. The second section discusses the process of industrial upgrading in the apparel industry and introduces a distinction between assembly and full-package production networks. The third section includes case studies based on published industry sources and strategic interviews with several lead companies whose strategies are largely responsible for the shifting trade patterns and NAFTA-inspired cross-border production networks discussed in the previous section. The fourth section considers the implications of these changes for employment in the North American apparel industry. © 2009 by Temple University Press. All rights reserved.

Economic boom and social mobility:The Irish experience

In this paper we examine the consequences for social mobility of the recent unprecedented period of economic growth experienced in Ireland and the implications of such developments for current theories of social fluidity. Contrary to suggestions that the "Celtic Tiger" experience has been associated with deepening problem marginalization, we found evidence for a substantial upgrading of the class structure, increased levels of social mobility and increased social fluidity in relation to long-range hierarchical mobility. Such increased openness could not be explained by changes in the mediating role of education. The pattern of change suggests that both the upgrading of the class structure and the recent unprecedented tightness of the labour market have led employers to increasingly apply criteria other than education in a manner that has facilitated increased social fluidity. The Irish case provides further support for the argument for reconsidering the balance that mobility research has struck between social fluidity and absolute mobility and encouraging increased attention to the evolution of firms and jobs. It also suggests that, in circumstances where policies in advanced industrial societies have shown an increasing tendency to diverge, increased social fluidity may come about as a consequence of very different economic and social policies. © 2006 Elsevier Ltd. All rights reserved.

Techno-Economic Feasibility of Selective CO2 Capture Processes from Biogas Streams using Ionic Liquids as Physical Absorbents

Biogas from anaerobic digestion of sewage sludge is a renewable resource with high energy content, which is formed mainly of CH4 (40-75 vol.%) and CO2 (15-60 vol.%) Other components such as water (H2O, 5-10 vol.%) and trace amounts of hydrogen sulfide and siloxanes can also be present. A CH4-rich stream can be produced by removing the CO2 and other impurities so that the upgraded bio-methane can be injected into the natural gas grid or used as a vehicle fuel. The main objective of this paper is to develop a new modeling methodology to assess the technical and economic performance of biogas upgrading processes using ionic liquids which physically absorb CO2. Three different ionic liquids, namely the 1-ethyl-3-methylimidazolium bis[(trifluoromethyl)sulfonyl]imide, 1-hexyl-3-methylimidazoliumbis[(trifluoromethyl)sulfonyl]imide and trihexyl(tetradecyl)phosphonium bis[(trifluoromethyl)sulfonyl]imide, are considered for CO2 capture in a pressure-swing regenerative absorption process. The simulation software Aspen Plus and Aspen Process Economic Analyzer is used to account for mass and energy balances as well as equipment cost. In all cases, the biogas upgrading plant consists of a multistage compressor for biogas compression, a packed absorption column for CO2 absorption, a flash evaporator for solvent regeneration, a centrifugal pump for solvent recirculation, a pre-absorber solvent cooler and a gas turbine for electricity recovery. The evaluated processes are compared in terms of energy efficiency, capital investment and bio-methane production costs. The overall plant efficiency ranges from 71-86 % whereas the bio-methane production cost ranges from £6.26-7.76 per GJ (LHV). A sensitivity analysis is also performed to determine how several technical and economic parameters affect the bio-methane production costs. The results of this study show that the simulation methodology developed can predict plant efficiencies and production costs of large scale CO2 capture processes using ionic liquids without having to rely on gas solubility experimental data.

Foreign direct investment through acquisitions and implications for technological upgrading: case evidence from Tanzania

Using a case study approach, this paper examines the role of privatisation on the industrial landscape of Tanzania. We examine the impact of foreign direct investment (FDI) through acquisitions on technology transfer within the acquired firm as well as the development of linkages to other firms based in the host country. Our results suggest that technological upgrading has occurred following FDI, the intensity of which reflects the type of firm-specific assets of the parent multinational enterprise (MNE), as well as the pre-acquisition state of these industrial activities. Improved backward linkages are also evident with local economic agents, but their type and extent – reflecting Tanzania's comparative advantage in the primary sector – confirm that capabilities both within the acquired firms and also in the industrial base of the host country greatly influence the magnitude and intensity of technological upgrading. 'Narrower' technology gaps between the MNE affiliate and the domestic sector are more likely to result in backward linkages and determine the type of technological content of inputs sourced locally rather than within the MNE.

Biorefinery strategies for upgrading Distillers’ Dried Grains with Solubles (DDGS)

Distillers’ Dried Grains with Solubles (DDGS) is the major by-product of bioethanol and distillery plants. Due to its high content of proteins, water-soluble vitamins and minerals, DDGS has been long marketed as animal feed for livestock. EU legislation on liquid biofuels could raise the demand on bioethanol production in Europe, with a resulting increase in DDGS availability. DDGS contains a spectrum of complex organic macromolecules, particularly polysaccharides, in addition to proteins and vitamins, and its use as a starting raw material within a biomass-based biorefining strategy could lead to the development of multi-stream processes for the production of commodities, platform molecules or speciality chemicals, with concomitant economic benefits and waste reduction for bioethanol plants. The present review aims to outline the compositional characteristics of DDGS and evaluate its potential utilisation as a starting material for the production of added-value products. Parameters of influence on the chemical and physical characteristics of DDGS are discussed. Moreover, various pre-treatment strategies are outlined in terms of efficient DDGS fractionation into several added value streams. Additional processing steps for the production of medium and high added value compounds from DDGS are evaluated and their potential applications in the food and chemical industry sector are identified.

Export performance, technological upgrading and foreign direct investment strategies in the Asian newly industrializing economies: with special reference to Singapur

Includes bibliography

Upgrading value chains through professional and supporting services: Lessons from three agro-industry chains in El Salvador and Guatemala

Includes bibliography

Tourism in the Caribbean: competitiveness, upgrading, linkages and the role of public private partnerships (PPP) and public policy

The main purpose of this paper is to explore and analyze the contributions that publicprivate partnerships and public policy have made in the development of tourism in the Caribbean as tools for enhancing competitiveness in the Caribbean tourism industry. The paper explores these contributions mainly in the context of the upgrading strategies that Caribbean countries have pursued over the past 15 years or so and using the lens of the tourism value chain and tourism cluster approach. The paper also analyzes the potential roles that public-private partnerships and public policy will continue to play in the future especially in the process of building linkages between the tourism sector and other sectors in order to increase net benefits from tourism to the Region. This paper is divided into five sections. In Section I, we define public-private partnerships (PPP) and describe the areas in tourism where PPP are most widely used, the tools used to implement PPP in tourism and the various forms of PPP. Economic arguments are then laid to motivate PPP as a determinant of tourism competitiveness using the tourism value-chain and tourism cluster approach. Specific case examples illustrating the contributions of PPP and public policy towards increasing tourism competitiveness are provided at a regional level and for specific areas in Sections II and III respectively. Section IV summarizes findings from the previous two sections and discusses ways to enhance the effectiveness of PPP and public policy in Caribbean tourism for increased competitiveness. Section V analyzes a few of the challenges that the Caribbean tourism sector is facing. The final section proposes new areas of intervention for PPP and public policy as tools for enhancing competitiveness in the Caribbean tourism sector in order to assist the region in addressing these challenges.

Tourism in the Caribbean: competitiveness, upgrading, linkages and the role of public private partnerships (PPP) and public policy

The main purpose of this paper is to explore and analyze the contributions that publicprivate partnerships and public policy have made in the development of tourism in the Caribbean as tools for enhancing competitiveness in the Caribbean tourism industry. The paper explores these contributions mainly in the context of the upgrading strategies that Caribbean countries have pursued over the past 15 years or so and using the lens of the tourism value chain and tourism cluster approach. The paper also analyzes the potential roles that public-private partnerships and public policy will continue to play in the future especially in the process of building linkages between the tourism sector and other sectors in order to increase net benefits from tourism to the Region. This paper is divided into five sections. In Section I, we define public-private partnerships (PPP) and describe the areas in tourism where PPP are most widely used, the tools used to implement PPP in tourism and the various forms of PPP. Economic arguments are then laid to motivate PPP as a determinant of tourism competitiveness using the tourism value-chain and tourism cluster approach. Specific case examples illustrating the contributions of PPP and public policy towards increasing tourism competitiveness are provided at a regional level and for specific areas in Sections II and III respectively. Section IV summarizes findings from the previous two sections and discusses ways to enhance the effectiveness of PPP and public policy in Caribbean tourism for increased competitiveness. Section V analyzes a few of the challenges that the Caribbean tourism sector is facing. The final section proposes new areas of intervention for PPP and public policy as tools for enhancing competitiveness in the Caribbean tourism sector in order to assist the region in addressing these challenges.

A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China

Starting from almost null in the late 1990s, China's mobile phone handset industry has grown to account for more than 40 percent of the current world production. While export growth has been overwhelmingly led by multi-national corporations (MNCs), increasingly fierce competition in the domestic market ignited by the advent of local handset makers has induced unique industrial evolution: (1) outgrowth of independent design houses specialized in handset development and (2) emergence of IC fabless ventures that design core ICs for handsets. In the background of this evolutionary industrial growth there are factors such as, the scale and increasing diversity of China's domestic market that advantages local firms vis-a-vis MNCs; modularization of handset and semiconductor technologies; policy interventions that supports local startups. The emergence and evolution of China's handset industry is likely to have international implications as the growth of the global demand for low-cost and multi-function mobile phone handsets is expected to accelerate. Thus, our case suggests that the conventional view of latecomer industrialization and upgrading that emphasizes the key role of international production networks organized by MNCs needs to be modified in order to accommodate China's rise into perspective.