3 results
13 - Revisiting the Miracle: South Korea's Industrial Upgrading from a Global Value Chain Perspective
-
- By Joonkoo Lee, Assistant Professor in the School of Business at Hanyang University, Seoul, Sang-Hoon Lee, doctoral student in the School of Labor and Employment Relations at the University of Illinois at Urbana-Champaign, Gwanho Park, construction supervisor at Korea Land and Housing Corporation, Jinju
- Edited by Dev Nathan, Meenu Tewari, University of North Carolina, Chapel Hill, Sandip Sarkar
-
- Book:
- Development with Global Value Chains
- Published online:
- 01 November 2018
- Print publication:
- 24 January 2019, pp 316-348
-
- Chapter
- Export citation
-
Summary
Introduction
South Korea has been known for its successful economic development in the post-World War II world economy. In 1960, the country's gross domestic production (GDP) per capita was just US$156, lower than Ghana's. However, it has rapidly grown since then, reaching $25,977 in 2013. In 1996, South Korea joined the Organisation for Economic Cooperation and Development (OECD) and become only the second Asian member of this rich countries’ club, after Japan. South Korea's economic development was mainly driven by exporting manufacturing goods. The country's exports rose from $122 million in 1960 to $703 billion in 2013, with manufacturing accounting for more than 80 per cent of the exports. It has become one of the ten largest trading economies in the world. The rapid expansion of exports was largely attributable to the constant upgrading of export product composition to higher value-added, more technologically sophisticated products, which coincided with upgrading the country's industry structure to focus on high-tech sectors, such as electronics and information technology (IT). In this regard, South Korea is an example of successful ‘economic upgrading’, defined as moving up to higher value-added activities with improved technology, knowledge and skills (Gereffi, 2005).
In explaining South Korea's economic growth, two opposite explanations have been presented. A market-based perspective highlights export-push strategies, openness to foreign investment and technology transfer as the key factors of the growth (World Bank, 1993). In contrast, state-centred views emphasize the key role of the state's active industrial policy in prodding local firms to upgrade and compete in global markets (Amsden, 1989; Chang, 1993; Evans, 1995). The debate following the economic crisis of the late 1990s centred on the development state was eclipsed by a ‘neoliberal turn’, or its strength was maintained with newly mandated roles (Chu, 2009; Kalinowski, 2008; Pirie, 2008). Missing in these explanations, however, is the role of global–local linkages in economic development (Hamilton and Gereffi, 2009). Economic development and industrial upgrading take place in a global economic context and through the interaction of global and local actors. Furthermore, just focusing on macro-economic settings or the role of the state fails to explain commonalities and differences in the patterns and trajectories of upgrading across different sectors and time periods.
10 - Economic and Social Upgrading in Global Value Chains and Industrial Clusters: Why Governance Matters
- from Part II - Expanding the Governance and Upgrading Dimensions in Global Value Chains
-
- By Gary Gereffi, Professor of Sociology and Director of the Global Value Chains Center at Duke University, Durham, USA., Joonkoo Lee, Assistant Professor of Organization Studies at the School of Business at Hanyang University, Seoul, South Korea
- Gary Gereffi, Duke University, North Carolina
-
- Book:
- Global Value Chains and Development
- Published online:
- 09 November 2018
- Print publication:
- 10 September 2018, pp 276-302
-
- Chapter
- Export citation
-
Summary
Introduction
Upgrading through global value chains (GVCs), or moving to higher value activities, has become important for economic development and job creation in the global economy, where competition remains intense and production has become fragmented and geographically dispersed (Cattaneo et al., 2013). Linking lead firms in GVCs with small and medium suppliers in diverse local contexts is a major business challenge in different types of industries, whether characterized by producer-driven chains like automobiles, electronics, or shipbuilding for whom finding and nurturing technically capable local suppliers is a requisite of global supply chain management for manufacturers who play a leading role in determining what and how to produce (Contreras et al., 2012; Sturgeon, 2003; Sturgeon et al., 2008), or in buyer-driven chains like apparel and footwear, where low cost is a major driver and retail buyers govern how the chains work (Bair and Gereffi 2001; Schmitz, 2004, 2006), or fresh produce and food products, where safety and quality standards are of utmost concern for supermarkets and their customers (Humphrey and Memedovic, 2006).
In order to maintain good supplier relationships in all of these settings, GVC lead firms have developed more active strategies of corporate social responsibility (CSR) (van Tulder, 2009). While CSR is a multifaceted notion, it generally refers to ‘the responsibility of enterprises for their impacts on society’ (European Commission, 2011). It encompasses a wide range of efforts through which firms seek to integrate social, environmental, ethical, and human rights as well as consumer concerns into their core business practices. The goal is to maximize the benefit of shared value for a broad set of stakeholders, including owners, shareholders, and the wider society, while reducing potential negative impacts of corporate business practices to a minimum.
There is a growing concern, however, that economic upgrading—countries and firms moving to higher value activities in GVCs with improved technology, knowledge, and skills (Gereffi, 2005: 161)—is no longer sufficient for sustainable CSR in global supply chains, given accumulating evidence and recent exposés about child labor, vulnerable workers, and abysmal working conditions in many export-oriented clusters located in developing countries (see Lund-Thomsen and Lindgreen, 2014; Lund-Thomsen and Nadvi, 2010a). Improving both economic and social conditions for workers and communities linked to GVCs is a vexing development problem, and it has attracted considerable attention by researchers, policy makers, and donor communities.
14 - Social Upgrading in Mobile Phone GVCs: Firm-level Comparisons of Working Conditions and Labour Rights
- from Modular Governance
-
- By Joonkoo Lee, Hanyang University, Gary Gereffi, Duke University, Sang-Hoon Lee, Hanyang University
- Edited by Dev Nathan, Meenu Tewari, University of North Carolina, Chapel Hill, Sandip Sarkar
-
- Book:
- Labour in Global Value Chains in Asia
- Published online:
- 23 July 2017
- Print publication:
- 11 July 2016, pp 315-352
-
- Chapter
- Export citation
-
Summary
Introduction
In developing countries, more and beffer jobs have been a key goal of economic development based on the integration of local firms and workers into global value chains (GVCs). As global production is increasingly organized by multinational lead firms through a dense web of inter-firm relationships across national boundaries, the participation of local producers in GVCs is widely considered to be an effective way to create new employment, generate incomes, and therefore reduce poverty in developing countries. Such optimism is premised on the expectation that, as firms and countries move up the value chain into high value-added activities through varied forms of economic upgrading, workers will benefit through higher wages and beffer working conditions. In other words, economic upgrading is expected to lead to improved workers’ conditions and entitlement in GVCs.
Over the last several years, however, there has been a growing concern about the disjuncture between the gains from GVC integration and economic upgrading, and what is captured by workers and their families and communities surrounding them (Barrientos et al., 2012; Posthuma and Nathan, 2010). This concern has been reinforced by a growing body of evidence and a plethora of news reports and public exposés showing that workers in developing countries catering to global buyers, from Chinese electronics workers to Bangladeshi apparel workers, are not given a fair share of the gains from export growth. This has prompted GVC researchers to propose the concept of social upgrading, which entails an enhancement of the quality of employment and working conditions and an improvement in the rights and entitlements of workers (Barrientos et al., 2011). The Capturing the Gains research program has been a notable effort to examine the conditions under which economic and social upgrading in GVCs might be combined.
Building upon this effort, our study aThempts to investigate the relationship between economic and social upgrading by comparing labour conditions at the firm and factory levels in mobile phone GVCs.