Gvc Governance and Skills Mobility – Exploring the Interrelations

Research indicates that R&D units become increasingly dispersed within knowledge intensive companies as they choose to place such units close to a) existing knowledge hubs and/or b) customers. The first decision (a) is driven by the strategic goal to access pools of existing skills and simultaneously benefit from the continued innovative environment. The second decision (b) is very much an expression of the need for R&D to be in close proximity to production and markets. However, other concerns might also drive the chosen form of relational value chain governance when moving such knowledge intensive tasks.

In this paper, results from a qualitative analysis of six globalized companies based in Denmark indicate that the more knowledge intensive the tasks, the more relational governance modes are employed by the companies irrespective of threats to knowledge loss. Furthermore, in order to share and/or control knowledge across company units, highly skilled employees are moved between these units internationally. These results indicate, that GVC governance needs to be understood as rather dynamic and closely intertwined with the human skills needs connected to the task. All the companies in this study find moving tasks easier than moving staff, but present GVC theories do not offer many tools for understanding the interconnection between the two.

The paper discusses the distinction between production and service tasks and the link to employee mobility. While the first type calls for technically competent employees, service tasks often call  for people with local knowledge, specific language skills, etc. (Peixoto 2001: 1040). Both will be included in most companies' operations and the distinction should therefore not be understood as a distinction between different industries. Secondly, in terms of understanding internal staff mobility another important distinction is discussed involving the deployment of technical staff (even R&D employees) as tools in production and executives as builders of trust and control across the enterprise (Peixoto 2001; Millar and Salt 2008). Theorizing how these different factors interact could possibly fine-tune our understanding of relational modes of global value chain governance and its connection to labour mobility.