COVID‐19 and Alternative Conceptualisations of Value and Risk in GPN Research

Abstract

The COVID‐19 pandemic represents a major disturbance that has rippled across the world’s population, states, economy, and central nervous system or global production networks transforming the traditional roles of states, firms, individuals/consumers, and geographies of production. This paper offers a critical and context‐based approach to understanding globalization and localization by challenging the conceptualization of ‘value’ and ‘risk’ within the current global production networks framework as well as identifying key operational strategies in risk management and national security. An analysis of the adaptation strategies of the GPNs of 91 companies identifies the role played by four different forms of value in configuring production networks. This is to balance ‘economic value’ with non‐price‐based sources of value and alternative values. The analysis underscores the critical role of the state in ensuring national and human security as well as its increasing power as a key actor in GPNs and the global economy.

COVID‐19 and the shifting industrial landscape

“…Imperceptible to the human eye, its propagative strategies outwit humans, revealing the folly of self‐serving speciesism. If appetite grows for a widespread rethinking of economy (Bryson & Vanchan, 2020; Latour, 2020), there is merit in considering how economic landscapes, manufacturing skills, and industrial cultures—both old and new—might prove important resources in facing volatile events. At the least, the pandemic should be a lesson for national governments and private enterprise about the importance of retaining domestic manufacturing capacity in critical areas.…”

“…Consumers have faced empty supermarket shelves and sudden unavailability of a range of discretionary goods. Predictions among academic commentators are that supply chains will become more strategically diversified and regionally focused, with value arising from reliability, security, and stability and not only from downward pressure on prices (Barbieri et al, 2020; Bryson & Vanchan, 2020; Kano & Oh, 2020). To these factors, we would add that the pandemic has highlighted the growing role played by intermediary actors and spaces (such as ports) that facilitate global flows—nuancing the accepted view in GPN theory, for example, that power predominantly rests with lead firms (cf.…”

The trouble with global production networks

“…Others have lamented its “hegemonic” positionality as the GPN paradigm in economic geography (Phelps et al., 2018). Most recently, Bryson and Vanchan (2020: 531–532) even alleged that “In 2010, [Michael] Taylor argued that clusters had become a mesmerising mantra in economic geography. By 2020, the new mesmerising mantra has become the GPN approach”.…”

“…Nevertheless, I think Bryson and Vanchan’s (2020: 532) latest claim that the GPN approach has become the new mesmerising mantra in economic geography has missed out on the wide range of highly influential approaches in the subfield, such as evolutionary economic geography, innovation systems, financial geographies, geographical political economy, institutional approach, and so on. In Clark et al.’s (2018) authoritative The New Oxford Handbook of Economic Geography , the GPN approach is discussed “only” in one chapter (Yeung, 2018), whereas financial geographies, for instance, are addressed in at least seven chapters.…”

“…They are also unable to answer fully the substantive difference such network dynamics make to their analytical outcomes. As one such example, Bryson and Vanchan’s (2020: 536) recent claim that GPN 2.0 has been too “hagiographic” and has not offered sufficiently critical analysis of value and risk offers a rather limited reading of GPN 2.0’s treatment of value and risk . Since Henderson et al.’s (2002) initial work on GPN 1.0, most GPN scholars understand value as more than a price-based calculation to denote residual economic surpluses from material and intangible transformations in the complex process of value creation, enhancement, and capture.…”