“The need to rethink global value chains has gained momentum in public debates during the COVID-19 pandemic, highlighting the vulnerability of transnational production systems to unexpected shocks. Consumption countries could be suddenly deprived of access to very basic goods, while poverty levels reached alarming thresholds in producing countries where vast numbers of unprotected workers were left without work or a basic income.
The unsustainability of global capitalism further came to the fore when the link could be made between deforestation, the decline of biodiversity, and the vulnerability of our societies to disease pandemics.”

The opening statement of our collective book entitled Rethinking Value Chains (Palpacuer and Smith, 2021), sums up the ways in which Covid-19, combined with rising political tensions between trade blocs and the soaring prices of energy and raw materials, have shaken well-established tenets on economic globalization.

Social inequalities, precarious development and ecological destruction have been longstanding issues surrounding the rise of global value chains (GVCs), but their magnitude and acuteness have now reached such a point that rethinking their premises and core dynamics has become unescapable.
Indeed, Global Value Chains (CGVs) formed by the geographical dispersion of productive activities across firms and countries have become ‘the world economy’s backbone and central nervous system’ (Cattaneo, Gereffi and Staritz, 2010, p. 7).

These chains are being actively promoted by leading international institutions, as promising ways of staying competitive in the global economy (OECD, 2007), offering “tremendous opportunities, in particular for developing and least-developed countries” (Lamy, 2012). GVCs were expected to deliver economic benefits by offering possibilities for local firms to plug into globally-dispersed but tightly coordinated production networks, and to perform increasingly sophisticated services for global buyers, so as to increase the value captured from their productive contribution.

The number of people employed in GVCs has increased from 296 to 453 millions between 1995 and 2013, providing one in five jobs in the global economy (ILO, 2015).

While GVCs grew at a fast pace in many industries, new social movements have also emerged in the form of transnational resistance networks aiming to make visible the social and environmental conditions under which productive activities were being performed in GVCs. Tight productivity pressures, low wages and erosion of social benefits, frequent repression of workers’ organizing efforts, and the continuous threat of job losses through production relocation, are making social gains both scarce and precarious in the most vulnerable segments of GVCs.

The spectacular collapse of the Rana Plaza building in Dhaka, the capital of Bangladesh, in April 2013, causing the death of over 1,100 workers and injuring twice as many, has attracted major public attention to the hazardous health and safety conditions to which workers, mostly women, were being exposed in global systems of subcontracted production.

Environmental issues are likewise paramount, in relation to the exponential growth of world transportation, accelerated rates of waste generation, depletion of national resources and weak environmental regulation in many places of production. Claiming that brands and retailers that outsource production should take responsibility for the social and environmental conditions under which their products are being manufactured, social movements have stirred the adoption by global buyers of dedicated management tools in the forms of codes of conduct, auditing and monitoring procedures, aiming to guarantee respect for core international labour and environmental standards in global supply chains. The proliferation of such initiatives, either private, public, or of varied forms of public-private partnerships, has greatly complexified the landscape of GVCs. If some local improvements can be observed, these organisational devices have proved inadequate to address systemic issues of labour violation or environmental degradation in GVCs.

The Rana Plaza accident also highlighted the lack of effectiveness of codes of conduct and monitoring systems by which global buyers were to ensure human rights protection for workers who manufactured their products in the collapsed building.

These social and environmental concerns have gained momentum in international debates on Global Value Chains, stirring recent regulatory initiatives to establish binding, enforceable forms of protection for social and environmental rights. The 2017 French law on the Duty of Vigilance of Multinationals requires large firms to assess, report, and remediate social and environmental risks in the global value chains falling under their ‘sphere of control’. A similar law came into force in Germany in January 2023, and a proposal for an EU Directive on Corporate Sustainability Due Diligence was submitted to the European Parliament in 2022.
The need for greater consideration of the impact on social and environmental life of economic decisions made in GVCs, and the search for new ways of addressing these impacts at both local and broader systemic levels, further call for multi-disciplinary research and teaching initiatives to address the multifaceted issue of social and environmental responsibility in value chains.

Rethinking articulations between global and local chains is emerging as an increasingly pressing issue.

As the social and environmental damages induced by GVCs are reaching new thresholds, the need to rethink value chains in view of fostering a greater embeddedness of economic activities into local territories, political actions and ecosystems is becoming more and more pressing, inviting researchers and activists alike to bridge boundaries between local and global initiatives, so as to cross-fertilize knowledges and actions and develop new forms of articulation between these two scales of value chain organization.

 

Lamy, P. (2012) Speech delivered at the WTO-MOFCOM-OECD-UNCTAD Seminar on Global Value Chains in Beijing on 19 September 2012.
http://www.wto.org/english/news_e/sppl_e/sppl245_e.htm, accessed 15/02/2015.

Organisation for Economic Cooperation and Development (2007) Staying competitive in the global economy: moving up the value chain, Paris: OECD.

Palpacuer, F. and Smith, A. (2021) Rethinking Value Chains, Bristol University Press. Open access: https://policy.bristoluniversitypress.co.uk/rethinking-value-chains.