Global Value Chains In a New Global Reality: Analytical Issues and Empirical Illustrations

Abstract

Global value chains are inherently dynamic, continuously adapting in line with current micro and macro conditions. We live in a metapolitical world where global value chains are put under pressure, and where they might become fragile if they become too specialized, dispersed, or long-chained. The thesis will discuss key drivers for change. These are: 1) political factors and policies, 2) technological factors, and 3) environmental factors and sustainability. The purpose of our thesis is to examine how these key drivers change global value chains. More specifically, in terms of: 1) length, which is defined by the geographical distances and the number of actors involved; and 2) vulnerability, which is embedded in the governance, location choices and the rigidity of global value chains. By drawing from multiple theoretical perspectives, we propose a conceptual framework. The framework reflects the layered complexity of macro-economic and political factors that shapes the governance structures and location of global value chains. To enrich our conceptual discussion, we present five empirical illustrations on global value chains. In order to make a pragmatic demarcation, we analyze industrial value chains and companies that have their origin in Norway. This allows us to discuss and explain different vantage points and accounts for extra-firm actors, regional developments, and internalization choices. The findings indicate that technological, political, and environmental factors significantly shape the length and vulnerability of global value chains.