Strategic Development: Value Chains, International Organizations and the Global Economy

The concept of global value chains (GVCs) has provided a common language for referring to the new global economy associated with geographically dispersed supply chains and global outsourcing by multinational lead firms.  This book explores a critical but hitherto overlooked aspect of GVC analysis:  its rapid adoption during the past decade by virtually all of the leading international organizations (IOs) that focus on economic and social development issues in the global economy.  The diversity of IOs that have adopted the GVC framework is remarkable, including: large multilateral agencies like the WTO, the World Bank, OECD, USITC, UNCTAD, and UNIDO, along with the ILO; regional development banks for Latin America, Africa and Asia; and bilateral donor agencies for advanced industrial economies, such as USAID, DFID (the UK), and GIZ (Germany).  While concerns that the 2008-09 global economic recession would spark a wave of protectionism generated a focus on high-risk GVCs (e.g., apparel, autos, electronics, steel) by the World Bank, OECD and WTO, a broader array of IO’s developed other programs to explore how global economic trends could be linked more systematically to the goals of inclusive and sustainable development.  This book seeks not only to document the reasons for the rapid uptake of GVCs by IOs, but also to unpack the multiple ways the GVC framework is being utilized by IOs on the ground:  (1) a neoliberal approach, which emphasizes open international trade and investment to promote gains from GVCs; (2) a developmentalist approach, which highlights the role of strong states and national industrial policy to harness GVCs for local development; and (3) a public-private collaborative approach, which targets lead firms in GVCs (both global and domestic) that are willing to adapt their strategies to incorporate local development goals, while the public sector provides the institutional foundations for private sector growth.   These dynamics highlight the value of an emerging development paradigm that we call strategic development. We use strategic in two senses (1) Unlike the neoliberal paradigm, which offers basic one-size-fits-all prescriptions, development requires strategies tailored to the particular circumstances of countries and global industries; and (2) strategic development addresses the future roles that IOs might play in a value chain world as collaborative conveners, information brokers, and sources of alternative visions for development.