Uneven Development and the
Global Economy
A Global Production Networks
Perspective
A global production networks
perspective
Key themes:
• Increasingly complex relations between MNCs and
regions/countries
• Concept of GPNs attempt to capture these relations
• Implications for how regions relate to changing dynamics
of GPNs
Key references:
Coe, N. and Yeung, H.W.C (2015) Global Production Networks:
Theorising Economic Development in an Interconnected World.
Oxford, Oxford University Press.
Dicken, P. (2015) Global Shift, London, Sage, esp. chapters 7 and 8.
A Global Production Networks
Perspective
• Interesting fact – more trade in ‘intermediate goods’
than ‘direct trade’ – reflects importants of MNCs and
particularly global commodity/supply chains
• GPN – a way of making sense of the relations
between regions and the global economy
– How do we understand economic + political relations
between places through the operation of MNCs and their
supply chains?
Global production networks
• Global economy based on production, consumption,
exchange and distribution of range of commodities.
– Range of actors
– Unequal share of profits (power relations)
– Link different places, everyday material geographies of
globalisation.
– Uneven development in terms of where value distributed and
how regions are situated in global corporate networks
• Goes beyond commodity chain approach (Coe et al.,
2008, 2).
– Incorporates range of network relations.
– Encompasses all relevant actors and relationships.
– Geographically sensitive, different spatial scales and sites.
Global production networks
Conceptual categories.
– Value.
• Its creation, enhancement and capture.
– Power.
• Corporate, institutional and collective.
– Embeddedness.
– Territorial, ‘anchoring’ in particular places.
– Network, durability and stability of relations.
GPNS and regional development
• Key concept of ‘strategic coupling’ between GPNs
and regional assets.
– Intentional and deliberative.
– Time and space contingent, construction of ‘temporary
coalition’.
– Transcends territorial boundaries, bringing together actors
that operate across different scales.
GPNS and regional development
• Regional assets.
– Specific forms of knowledge, skills and expertise.
• Generate development only if fit strategic needs of
GPNs (lead firms).
• Importance of regions creating, enhancing and
capturing value within GPNs.
GPNs and Regional Development
• Key role of regional institutions.
– Creating value (training and education, promoting
firm start-ups, venture capital, etc).
– Enhancing value (knowledge and technology
transfer, industrial upgrading, advanced
infrastructure, specialised skills).
– Value capture (retention of benefits)
• Issues of power and control.
GPNs and Regional Development
• GPN approach portrays relations between regional
institutions and GPNs as harmonious and
cooperative.
• Other research shows ‘dark side’ of strategic
coupling.
– Structural and political power of MNCs.
• Unequal power relations with regional institutions.
– Notion of ‘corporate capture’ of economic
development agenda (Phelps, 2000).
– Shortened product cycles + heightened mobility
• Critical issue of securing repeat investment – issues
of recoupling/decoupling
GPNs and regional development
Different types of region..
1. Core / heartland regions
regions, e.g. Silicon Valley.
– Endogenous dynamism:
innovation,
entrepreneurship, business
networks
– Regional assets.
• Research universities, skilled
labour, availability of capital,
attractive residential
environment.
– Generator regions for GPNs
(lead firms) and value
capture.
• Implicit and organic forms of
coupling.
• Decoupling over time?
Rethinking Regional Development
2. Old industrial regions in global north (e.g.
Northern England, Ruhr, N.E. France, US
rustbelt)
– Decline of traditional industries.
– Generic regional assets.
• Surplus labour, industrial sites, market access.
– In UK, focus on attraction of inward investment.
– External dependence and unequal power
relations.
Rethinking Regional Development
– Silicon Glen (Scotland)
• Successful strategic coupling between regional assets
and lead firms in GPNs – major region for foreign
investment in 1980s/1990s
• Key role of regional institutions.
• Significant value creation and enhancement, 40,000
jobs by 2000, half of Scotland's manufactured exports
• But lack of value capture and concerns about ‘branch
plant’ economy.
Rethinking Regional Development
–
–
–
–
Plants mainly assembly of components.
Links with local suppliers limited.
Most jobs semi-skilled.
Vulnerability in recession, closures.
• Severe contraction and ‘decoupling’ in 2000s, 46 per
fall in output 2000-2005.
– Global downturn in electronics.
– Competition from lower-wage locations in Eastern Europe
Rethinking Regional Development
• 3. Asian growth regions.
– 3 forms of ‘strategic coupling’ (Yeung 2009)
• International partnerships.
• Indigenous innovation creating new GPNs, e.g. South Korean
Chaebol.
• Provision of production platforms.
– Taiwanese PC production in China, PRD and YRD.
• Growth of YRD since 2000, laptop production.
• Explicit coupling driven by regional authorities.
• Increased Taiwanese investors’ bargaining power.
Table 1. Key dimensions of coupling between GPNs and regions
Dimension
Scenarios
Mode of entry
Greenfield, repeat investment,
merger/acquisition
Status of MNC affiliates
Autonomous – dependent
Type of region
Source, host
Regional assets
Distinctive - generic
Type of coupling
Organic, strategic, structural
Degree of coupling
Full – none
Depth / layering of recoupling
Deep – shallow
Power relations
Symmetric – asymmetric
Regional development outcomes
Development – dependency
Exposure to decoupling
Low – High
.
Global South and GPNs
• Many countries develop strategy linked to
securing foreign investment by MNCs for low
cost, lightly regulated activities…
Export Processing Zones (EPZs).
Special zone where MNCs and their sub-contractors
exempt from regulations and taxes.
• Export Processing Zones
– Disconnected from local economy
– Supplying cheap labour for Western MNCs to
make for Western markets
– Low taxes, environmental regulations
– Discouraging unions
– Workers housed in factory dormitories
– Sexual and physical abuse of workforce
Nogales Ind. Pk, Sonora, Mexico: 80 maquiladoras
• Trade-off between jobs and economic
growth v exploitation and concerns about
over-dependence on foreign control….
• ..but also environmental problems and
pollution..
Pollution at US border from Mexican plastics
factory
‘Filling the gaps’? Criticisms of GPN approach
What about labour.
• “as networks that are bound up in the production of
commodities, GPNs are ultimately networks of
embodied labour (Cumbers et al 2008: 372)”.
• Often regarded as passive victim of restructuring, not
active agent.
• But MNCs never fully escape ‘labour problem’
Source: Coe et al. 2008
Filling the gaps?
• Consumers (productionist orientation of GPN research)
• Can shape the governance of GPNs through ethical campaigning
and notions of business responsibility (Hughes et al. 2008).
• Branding.
• Civil society organisations.
• Non-Government Organisations (NGOs) and social movements
through the development of particular standards and codes of
conduct relating fair trade, labour rights and environmental
sustainability (Barrientos and Smith, 2007).
Conclusions
• GPN approach provides framework for
comprehending the economic and political
relations between places in the global economy.
– Range of actors .
– Multi-scalar perspective.
• Global perspective on regions and regional
development.
• ‘Strategic coupling’ between GPNs and regional
assets.
• Highly uneven sets of relations
• Implications that regions dependent on firms?
Task: discuss in pairs and report back
(20 minutes)
Reflect upon 3 different concepts for
interpreting global economy:
Uneven development
Varieties of capitalism
Global Production Networks
- Evaluate usefulness of different concepts?
- Which do you find most compelling?
- How complementary are they?