240053 SE VM2 / VM1 - Global production networks: Economic and social upgrading or uneven development? (2019W)

The global economy has changed significantly in the past decades in the context of neoliberal globalization. This change is reflected in the rise in international finance, global trade and foreign direct investment, but also in the structure of global production and the organization of global industries. Today, the global economy is increasingly structured around organizationally fragmented and geographically dispersed “global production networks” where transnational corporations break up the production process in different parts and locate them on a global scale in search of low-cost and capable suppliers. Such global production arrangements can be found in sectors as diverse as apparel, footwear, automobiles, electronics, fruits and vegetables, flowers, coffee, cocoa, minerals, tourism and business related services.

These transformations in global production have crucial implications on how firms, producers and workers in the Global South are integrated into the global economy and on the socio-economic consequences of this integration. The extension of global production networks and the “offshoring” and “outsourcing” in the Global North have provided opportunities for firms and producers in the Global South to enter and upgrade in the global economy. However, integration into global production networks can also lock firms and regions/countries in low value activities relying on static competitive advantages in terms of low production (often labor) costs without long lasting benefits for learning and development. The wider social and environmental impacts of such integration are often very problematic.

These outcomes are closely related to asymmetric market and power structures embodied within global production networks. “Lead firms” in global production networks outsource activities where competition is high and prices low while they retain control over activities where entry barriers and rents are high. Power structures within global production networks are however contingent and contested. This is reflected in the emergence of powerful supplier and lead firms in the Global South that have challenged at least to a certain extent the power of traditional Global North-based lead firms. But more importantly, worker struggles and civil society activism around global production networks have intensified, aiming to make lead firms accountable for negative outcomes and to change power structures. Moreover, states have had a crucial role in facilitating and regulating as well as through participant in global production networks and altered state-society relations could lead to a “regulatory renaissance” in the areas of industrial policy and labor and environmental standards.

In this context, this seminar asks if the proliferation of global production networks have provided “economic and social upgrading opportunities” or have intensified “uneven development outcomes” for suppliers in the Global South. This question is addressed in three steps. First, key changes in the global economy are assessed, concentrating on how globalized production arrangements have evolved in the past decades. Second, the key conceptual approaches to analyze these changes and their socioeconomic consequences are critically examined. Third, specific globalized production networks in terms of sector and country case studies are comparatively analyzed focusing on the concepts of “economic and social upgrading” and “uneven development” in manufacturing and agriculture-based sectors.

The first half of the course generally starts with an input by the lecturer followed by a discussion based on two required readings. The lectures in the second half of the course focus on specific global production networks and involve a seminar paper presentation by a group of students. Students are required to read and prepare the readings for each lecture in advance to allow for an interactive discussion.