Breaking up the global value chain: Possibilities and  consequences

Technological and institutional changes have increasingly enabled companies to reconfigure their global value chain and combine the benefits arising from specialization and increased flexibility with location advantages (e.g. through fine-slicing, modularization and disintegration of their activities).

As a consequence, knowledge-intensive activities (e.g. R&D, design, marketing, finance etc.) have been typically centralized in the home country or offshored to other advanced economies, while large part of manufacturing and other more standardized activities have been offshored to emerging countries mainly to exploit cost advantages (Mudambi, 2007, Contractor et al., 2010).

However, recent developments are increasingly challenging this traditional separation between advanced and emerging economies as host of knowledge- and production intensive activities, respectively.

This conference will discuss questions such as:

  • What are the consequences of breaking up the global value chain and which possibilities is this offering?
  • Under what conditions is it beneficial to keep the different business activities in the same location rather than splitting and decentralize them across companies and countries' boundaries? What are the organizational challenges?
  • What are the benefits and costs associated with offshoring? Are there any hidden costs of offshoring? Who is benefitting from offshoring? Is it society at large, customers, employees? What are spill-over effects of offshoring?
  • What are the macro-economic and institutional conditions explaining the new international fragmentation and geographical dispersion of the value chains? How has the relevance of location factors changed and affected the new era of offshoring and back-shoring phenomena?
  • What are the challenges for policy makers? What can be done in order to promote the manufacturing activities in advanced countries?