Published online by Cambridge University Press: 21 January 2022
This is a book about global value chains (GVCs), particularly, but not confined to, those of garments (or apparel). The structure of a value chain is usually taken to be composed of the following coarse-grained tasks: research and development, design, manufacturing, distribution and logistics, sales and marketing, and services. These activities, contributing to the final output and its marketing, are not carried out within the confines of a single firm, or even a multinational corporation (MNC). Rather, they are splintered in GVCs across firms and geographies, held together by an organizational structure, founded on governance relations between the lead firms or brands, including mass retailers and various suppliers.
The two sets of firms, brands and suppliers, are generally located in headquarter economies and supplier economies, respectively, to borrow the terms used by Richard Baldwin (2016). These can also be roughly congruent with the somewhat politically loaded terms, ‘Global North’ and ‘Global South’. It should, however, be understood that all firms within each set of countries need not be only brand or supplier firms. China, in particular, has developed numerous brands or lead firms, such as Huawei, ZTE, Lenovo, Haier, and Alibaba, all with international markets. In garments too, China has the Li Ning brand in sportswear. India, to a much lesser extent, has some brands, such as Tata, Mahindra, Bajaj, and Hero, all in various parts of the automotive sector. On the whole, however, brands are concentrated in the headquarter economies of the Global North, while supplier firms are concentrated in supplier economies of the Global South.
GVCs are not just one other way in which contemporary global capitalism is organized; they can be called the characteristic form of twenty-first-century global capitalism, which is global monopsony capitalism. The World Trade Organization (WTO) and others estimate that as much as 70 per cent of global trade in 2017 was in the form of GVC trade (WTO et al. 2019). The predominance of this GVC form of capitalist organization means that our analysis of injustice in GVCs becomes an analysis of injustice in the global capitalist economy.
The GVC structure starts with knowledge, usually protected under intellectual property rights (IPRs), creating brands with varying degrees of monopoly, or oligopolies, in the product markets (Durand and Milberg 2019; Kaplinsky 2019) in the headquarter economies of lead firms. GVCs have embedded within them a distribution of knowledge among different GVC segments.