Commodity Chains and Production
Networks
A
final reminder about “Green Fire”
tonight and the Urban Issues Film Festival
on Friday.
 It’s interesting that, despite super-storm
Sandy, climate change never become an
issue in the U.S. election. It’s the old
‘elephant in the room’ syndrome.
 Today
we’ll cover Chapter 10, and watch
“Poor No More” about the ‘Swedish model.’
 Any questions about the case studies?
 As
a result of economic globalization, places
have become more porous than ever – in the
conception of Doreen Massey, not things but
mere intersections of global flows.
 This is not new. Even what many people
regard as the distinctive heritage ‘Craftsman’
houses of Vancouver from a century ago were
imported in patternbooks from California,
which in turn were inspired by the Arts and
Crafts movement in late 19th century
England. It is sometimes hard to know –
especially in newer places – what is unique
and authentic anymore.
“The production and consumption of particular
goods and services or commodities typically
involves a complex chain of actors, spread across
different countries and regions.”
 They cite the example from David Harvey
describing his breakfast and how it was sourced
from all parts of the world.
 Of course, when we buy such products, money
makes them largely faceless and anonymous.
Thus, Marx described money as the universal
“pimp” connecting people and commodities –
whereas commodities are actually “a bundle of
social relations.”


Two approaches: global commodity chain (GCC)
approach, and global production networks (GPN)
approach. [See comparison table on p. 224.]

“Flows of different kinds of material – goods,
services, money, information and people – are of
particular importance, creating a range of
connections between places.”

Commodity chains – both producer-driven and buyerdriven – “involve the transformation of material and
non-material (procurement, insurance, legal services,
advertising, and marketing) inputs.”

Four stages: inputs, transformation, distribution,
and consumption.
 Figure
10.1 illustrates a generic production
network. One difference with buyer-directed
networks is that they are dominated by huge
retail chains who outsource production of
goods (in the case of Walmart to China).
 Producer chains would include Nike, Adidas,
Gap, and Ikea.
 See Box 10.1 about the battle over tariffs
and taxes between Europe that favoured
former colonies and small producers and the
U.S. that favoured multinational-controlled
plantations in Latin America and Africa.
 Another
factor that has influenced buyercontrolled networks are the growing concern
with ethical consumption, as manifested in
fair and direct trade, and organic, products.
 In producer-driven commodity chains,
personal computers are perfect examples.
See Figures 10.2 and 10.3 (pp. 227-228) for
examples from the laptop and Dell
production systems, where Dell does the
design and marketing and contracts out the
production of the components.
 Examples
for Dell of chains and networks
include: Japan, Korea, China, Taiwan,
Malaysia, Singapore, Czech Republic,
Hungary, Ireland, Brazil, and the U.S.
 The Global Production Network approach is
based on the concepts of value, power, and
territorial embeddedness.
 Value is created through labour, inter-firm
relationships, and technical innovation.
 Power takes the form of lead forms’ “control
of key resources, information, knowledge,
skills, and brands within a production
network”; institutional power exercised by…
…various levels of government, supra-national
agencies, and international credit rating
agencies, and embeddness in institutional and
regulatory contexts and in particular locations
because of historical and economic factors. [For
different categories and models of embeddedness, see Figure 10.5.]
 With foreign direct investors, some countries
have more bargaining chips than others. In
exchange for making its potentially huge
consumer market for automobiles available, the
Chinese have insisted on joint ventures and
technology transfer. They can do this because
China is now the third largest auto market in the
world after the U.S. and Japan.

 Some
critics have suggested that GPN theory
needs to incorporate ecology (resources, and
wastes and pollution) and labour as an active
force more explicitly, along with the impact
of NGOs and social movements in influencing
production and consumption patterns.
 These authors also focus on the interaction
between the global and regional levels –
networks are embedded in territories and
territories are embedded in networks.
 Territorial coalitions of unlikely bedfellows
often collaborate to attract international
investment by taking advantage of and
enhancing existing assets. Can you think of
examples?
 As
the authors note, “The task for regions is
to create of supporting conditions for growth
by regional institutions through training and
educational programmes….knowledge and
technology transfer, industrial upgrading, the
provision of more advanced infrastructure,
and the development of specialized skills”
(p. 238). [See Box 10.6 for a description of
how the Scottish government fostered the
emergence of the “Silicon Glen.”]
 Nonetheless, they are at pains to emphasize
that the relationships between MNCs and
regions are very often not equal; thus the
latter have to be careful not to be taken
advantage of.