Global production and local jobs: can global enterprise networks be used as levers for local development?

Abstract

This article is developed out of a research project on 'Global Production and Local Jobs' launched by the International Institute for Labour Studies of the International Labour Organization (ILO). It identifies salient features of global production networks in the automobile, electronics and apparel industries, and discusses their implications for local industrial upgrading, jobs and development policy. The approach combines in novel forms complementary analytical frameworks such as the global value chain and industrial district perspectives, in order to highlight interactions between global and local forces in the operation of transnational production networks. Central issues revealed by this approach include: the rise of entry barriers into the most profitable, service-intensive activities of global value chains, that reduce small firms' prospects for industrial upgrading; the uneven benefits derived from participation in global production networks at the local level; and the need for local institutions to devise policy responses through a flexible, network-oriented approach involving a broad local constituency.To create and retain good jobs is a central objective of employment and industrial policies at the local, national and international levels. As a result of globalization, the context in which such a goal is to be achieved has undergone important changes, generating new challenges for policy-makers. One main challenge is to use globalization as a lever for local development, by helping local firms and workers take advantage of the opportunities opened up by the global economy. This derives from an awareness that the development of transnational networks of economic activities generates unprecedented possibilities for accessing new markets and resources, acquiring new skills and capabilities, and developing international competitive advantage. Another key challenge is to contain the social and economic imbalances resulting from global integration, by spreading its benefits and costs throughout local industries and communities. This responds to the growing concern that global connections may provide an unstable basis for local growth and development, and disrupt and divide local industries and communities, marginalizing those actors that fail to develop strong global linkages. Meeting such challenges calls for significant changes in policy-making. It requires the identification of the driving forces that shape the development of global networks of economic activities, the assessment of the opportunities and constraints that these networks create for local firms, workers

Global Cities in Global Commodity Chains: Exploring the Role of Mexico City in the Geography of Global Economic Governance

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“…Coe et al (2004) even argue that the Global Commodity Chain approach still remains preoccupied with the nation-state as the main geographical scale of analysis (for example OECD 2008; Tokatli et al 2008). A second, more specific limitation in value chain research is that the empirical scope of analysis has mainly been concerned with a small number of primary commodities and industrial sectors (for example Hassler 2003;Palpacuer and Parisotto 2003;Pilat et al 2008;Rothenberg-Aalami 2004) and pays little attention to APS enterprises. A third shortcoming, finally, is the fact that value chain research has an underdeveloped set of tools for the operationalization of the conceptual framework.…”

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