The University of Manchester Research Global Production Networks Link to publication record in Manchester Research Explorer Citation for published version (APA): Hess, M. (2018). Global Production Networks. In D. Richardson (Ed.), The International Encyclopedia of Geography: People, the Earth, Environment, and Technology [0675] John Wiley & Sons Ltd. Published in: The International Encyclopedia of Geography Citing this paper Please note that where the full-text provided on Manchester Research Explorer is the Author Accepted Manuscript or Proof version this may differ from the final Published version. If citing, it is advised that you check and use the publisher's definitive version. General rights Copyright and moral rights for the publications made accessible in the Research Explorer are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Takedown policy If you believe that this document breaches copyright please refer to the University of Manchester’s Takedown Procedures [http://man.ac.uk/04Y6Bo] or contact [email protected] providing relevant details, so we can investigate your claim. Download date:27. Sep. 2021 regional development. The following discussion Global production will first present the conceptual foundations of networks GPN 1.0 and 2.0 and their intellectual influ- ences. Subsequent sections will focus in turn on Martin Hess power relations between actors and their impact University of Manchester, UK on governance structures in and of GPNs; the increasing fragmentation of GPNs through In the twenty-first century, the world economy outsourcing and offshoring, driven by, among has seen substantive challenges and changes, not other factors, corporate as well as other forms least the global financial crisis, the ramifications of financialization; the role of labor and labor of which are still being felt around the globe. agency in GPNs; and the dynamic relation- Contemporary economic globalization can be ships between GPNs and regional development. characterized by the increased functional and The entry will conclude with brief reflections geographical fragmentation and reconfiguration on GPNs as politically contested fields and of production processes, deepening outsourc- their “discovery” by policymakers and interna- ing and offshoring, changing geographies of tional organizations as arenas of international production and consumption, and associated governance and developmental “tools.” labor market dynamics including the ascent of temporary and migrant work. These dynamics have become increasingly prevalent with the rise GPNs – conceptual antecedents of neoliberalism and the end of the Cold War, triggering new lines of social sciences inquiry As an analytical framework, the GPN concept into globalization and economic development. has been developed since the late 1990s by a Moving beyond more state-centric approaches group of scholars in economic geography and to economic development studies, approaches international economic sociology, mostly based such as commodity chain research and global at the University of Manchester. It emerged from value chain analysis have been developed to a growing dissatisfaction with existing theories better understand the social and developmental of economic development that operated at either consequences of contemporary capitalism (Bair macro-levels or micro-levels of abstraction and 2005). It is within this context, sharing such thus failed to capture the increasingly complex, a research agenda, that the global production networked nature of economic activities under network (GPN) concept first emerged as an neoliberal globalization and their impacts on analytical framework and heuristic tool (what uneven development at various scales. The is now labeled GPN 1.0) and was subsequently construction of the GPN framework rests on reconceptualized as GPN 2.0 by Coe and Yeung a number of historical precursors. Hess and (2015) into a more strongly focused theoretical Yeung (2006) identified four strands of literature approach to understand the changing nature informing this approach: (i) the 1980s value and dynamics of economic globalization and chain literature associated with the work of The International Encyclopedia of Geography. Edited by Douglas Richardson, Noel Castree, Michael F. Goodchild, Audrey Kobayashi, Weidong Liu, and Richard A. Marston. © 2018 John Wiley & Sons, Ltd. Published 2018 by John Wiley & Sons, Ltd. DOI: 10.1002/9781118786352.wbieg0675.pub2 GLOBAL PRODUCTION NETWORKS Michael Porter; (ii) work on networks and structure describing the production process and the social embeddedness of economic activi- associated activities along the chain, from raw ties as developed in economic sociology; (iii) materials to the final product; the territoriality actor-network theory (ANT), which emerged of the GCC, which represents its geographi- in the context of science and technology studies; cal configuration; the governance dimension, and (iv) most notably, the literature on global which denotes the power relations of actors commodity chains (GCCs) and global value (firms) along the commodity chain; andan chains (GVCs), originating in world-systems institutional dimension, the background of theory, and developed since the 1990s by Gary state regulation and other institutional rule Gereffi and his colleagues. setting against which firms in GCCs operate. Porter’s value chain analysis has been influential The GVC framework built on this conceptu- in both academic and policy circles, highlighting alization with a view to refining the forms of the various activities a firm performs and the governance found in interfirm value chains, resulting systems of inputs, transformations, and – echoing some insights from Porter’s value and outputs making up the production process. chain approach – paying more attention to the Influential in economic geography for the anal- local and regional dimension of clusters within ysis of industrial clustering, it has also informed GVCs. Based on a critical engagement with the GPN framework with regard to the centrality these conceptual antecedents, and following of value creation and the spatial organization of Henderson et al. (2002), a GPN can be defined production processes and service provision. To as the nexus of interconnected functions and better understand how economic activities are operations through which goods and services organized within and between firms, the role are produced, distributed, and consumed. Over of social networks and the embeddedness of the years, GPNs have become organizationally economic action in ongoing social relations – in and geographically more complex, increasingly contrast to the methodological individualism blurring traditional organizational boundaries. of transaction cost economics – have to be They integrate regional and national economies, integrated as crucial elements in GPN analysis. cutting through state boundaries in highly Economic sociology and an emerging literature differentiated ways to create discontinuously ter- on relational economic geography therefore had ritorial structures that are shaped by regulatory a major impact on the development of the GPN and nonregulatory barriers as well as variegated framework. This was complemented by insights sociocultural conditions of the places connected from ANT and its emphasis on a nonessentialist by GPNs. approach to studying networks and actors. ANT reinforces a relational view, avoiding artificial dualisms like structure/agency and global/local, Developing a heuristic device: GPN 1.0 and thus opening up analytical space for inves- tigating multiple actors and their heterogeneous The original GPN framework as developed in relations in GPNs. Henderson et al. (2002) – now often referred to Finally, GCCs and GVCs have provided a as GPN 1.0 – draws on three analytical registers: major impetus for the GPN framework. GCC value, power, and embeddedness. Two notions analysis addresses four different dimensions of value are important for GPN research. First, (Gereffi and Korzeniewicz 1994): an input–output value is to be understood as surplus value created 2 GLOBAL PRODUCTION NETWORKS in transnational production systems through the and facilitators of economic activity, but also labor process. This brings into focus issues of exercise buyer power as major consumers (public employment, working conditions, and produc- sector purchasing), and producer power (through tivity at various points in the network, with state-owned enterprises). Civil society actors far-reaching consequences for socioeconomic produce various forms of collective power, for development. Second, value refers to the notion instance through labor unions, nongovernmental of different forms of rents that firms can realize organizations (NGOs), and consumer initiatives, within GPNs. These include technological rents, which can also have considerable impact on achieved through access to advanced product GPNs by putting pressure on lead firms. and process technologies; brand rents, realized Finally, GPN analysis takes into account the through a strong market presence and consumer embeddedness of economic activity, along three preferences; organizational rents, achieved by dimensions (Hess 2004). Societal embedded- optimizing managerial and organizational skills ness – a notion that draws on the work of and production processes; and