IPC researchers are examining the processes of geographic fragmentation, dispersion, and long distance coordination in both goods and services industries. When production becomes increasingly fragmented, or “roundabout,” the increased demand for specialized intermediate goods and services draws a broader range of establishments, firms, workers, and countries into increasingly complex and dynamic divisions of labor. For nations that are very deeply integrated and economically interdependent with others, the basic structure of industries, employment, and innovation can be affected. In theory, each segment, activity, or node in the value chain can contribute a set of highly specialized tasks and inputs to the build up of finished products or services, with the dividing lines between tasks influenced by points of technological dissimilarity, as well as the codification schemes and standards that ease the exchange of appropriate technical information between specialized tasks. Such factors can influence how work is divided, not only within a factory or single firm, but also in globe-spanning business networks that link several — if not dozens — of firms, facilities, offices, carriers, and workshops as a product or service takes shape along a value adding chain of activities. Moreover, the potential for GVC formation is increasing. Advances in information technology, better codification schemes, and improvements in transport and logistics increase the potential for the geographical fragmentation of work. As it becomes more likely that value chains in large, economically important industries will be spread across multiple countries, it is more difficult to conceive of national industries as self-contained systems and national economic performance as endogenous. The measurement and policy challenges posed by these changes are non-trivial.
The Global Value Chains (GVC) Initiative seeks to develop an industry-centric view of economic globalization that highlights the linkages between economic actors and across geographic space. It is a multi-year effort to test and develop the GVC framework with the aims of creating greater analytical precision, intellectual impact and policy relevance.
The Global Value Chains Initiative has received support from the Rockefeller Foundation and the Alfred P. Sloan Foundation. The Initiative consists of a dynamic network of researchers, activists, and policymakers that began working together in 2000. The co-organizers of the Initiative are Gary Gereffi of the Center on Globalization, Governance & Competitiveness (CGGC) at Duke University; John Humphrey of the Institute for Development Studies at the University of Sussex; and Timothy Sturgeon of the Industrial Performance Center at the Massachusetts Institute of Technology.