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This chapter analyses the way national capitalisms interact with Global Value Chains (GVCs) / Global Production Networks (GPNs). It surveys the literature in each area and identifies both the weaknesses of each approach and their complementary strengths. The national institutional frameworks which shape the activities of UK, US, and German clothing firms are outlined. The chapter additionally undertakes an analysis of the state as an actor in both the national and international arena, focusing on the concept of ‘competition state’. It concludes with a section which links the discussion of firm capabilities and strategy to the process of value chain fragmentation, as well as outlining a typology of firms in this industry.

This chapter surveys the factors that have given rise to foreign sourcing and analyses the divergent manner in which national institutional environments, as well as international regulatory bodies, have shaped the coordination and governance of global production networks (GPNs). It shows how, in building GPNs, firms' various strategic concerns, particularly cost reduction, flexibility (in terms of capacity variation), and management of the extremely volatile competitive environment, have interacted with both domestic and global institutional opportunities and constraints to result in a complex web of influences. Additionally, the nationally diverse capabilities, resources and strategies of retail customers are shown to exert a strong influence on power relations in the GPN. In outlining different national sourcing strategies, the chapter explores both the mode of sourcing and the locational choices of firms. Finally, it analyses the nature of relationships in the network between western buyer firms and their contractors in low-wage countries.

This chapter outlines the central themes of the book and provides brief definitions of key terms. It briefly indicates the theoretical approach adopted, as well as the data we utilise. It makes clear how the book goes beyond a mere industry study and contributes to a better understanding of processes of global economic integration. Finally, it provides an outline of the contents of the book.

This chapter provides a theoretical conclusion by answering some questions posed throughout the book: To what extent and how are GPNs shaped by national capitalisms and to what degree are they influenced by global markets and by international/global organizations? How do GPNs in the clothing industry impact on national capitalisms? Do they further strengthen a given economy's competitive advantage in a particular industry niche, or do they also undermine economic structures and disorganize or disrupt institutional arrangements? How does a dual theoretical focus on the comparative capitalism approach and the theory of global value chains/production networks improve our understanding of what drives network actors and the interrelationships within networks? The chapter points out how the answers go beyond the work of both Gereffi (various dates) and Dicken et al (2001), as well as ‘comparative capitalisms’ theory. Another section summarizes the findings on the supplier countries studied, showing both the nature of their comparative advantage and the limits thereto. The chapter concludes by pointing out the advantages and disadvantages of the VoC framework for the study of this global industry.

The capabilities and innovation perspective is not limited to explaining growth processes in technologically advanced regions. Here the perspective is applied within the context of developing an industrial strategy for Northern Ireland. While Northern Ireland has not enjoyed the benefits of regional growth dynamics driven by entrepreneurial firms, the fault is not lack of industrial policy initiatives. Nevertheless, productivity levels are stubbornly low and both innovation and growth have been disappointing. A major lesson of Northern Ireland is the critical role of government policy in aligning the three domains of the Productivity Triad: industrial policy initiatives that fail to take account of the interactive dimensions of business organization, production capabilities, and skill formation will likely fail to impact on regional growth. The alignment theme is illustrated with policy proposals on local capability development and global production networks, industry and university partnering, and work organization and business strategies.

This chapter gives an overview of the state of global production networks in the present age, particularly in the “slicing of the value chain” phenomenon, which refers to the gradual disintegration of production processes across borders. Another important characteristic of global production networks is that they necessarily entail intensive contracting between parties located in different countries and thus subject to distinct legal systems. In a world with perfect (or complete) contracting across borders, this of course would be of little relevance. Unfortunately, this is not the case at present, and from here the chapter examines the issues surrounding the use of contracts in international trade.

In starting the account, this introductory chapter has three objectives. First, it establishes the key structural forces behind the emergence of global production networks (GPN) as an organizational phenomenon within the global economy over the past two decades or so. It then introduces the intellectual context in which the GPN framework first appeared in the early 2000s and distils its basic attributes in relation to cognate approaches such as global commodity chains and global value chains. The final section maps out the structure and arguments of the book, detailing how it seeks to develop an enhanced GPN theory—for which it uses ‘GPN 2.0’ as convenient shorthand—that builds upon, and significantly extends, existing work under this banner.

This chapter discusses how the strategic coupling of East Asian firms requires favorable structural conditions, of which renewed state efforts in the form of supportive policy initiatives are vital. Taken together, this shift in state-firm-GPN relations from state-firm to interfirm dynamics in global production networks (GPN) has profound implications in the understanding of the present and future developmental trajectories of South Korea, Taiwan, and Singapore. The chapter argues that the successful articulation of domestic firms from these economies into GPNs is dependent on the necessary process of strategic coupling through which these latecomer firms' emergent capabilities and organizational choices must couple with the evolving strategies and intents of global lead firms in their coordination and orchestration of production networks across different territorial ensembles.

Chapter 3 exposits how the legacies of East Asian capitalism and those of Mao's socialism combine to fuel the China boom. The chapter also discusses how the China boom derives most of its energy from the private and export-oriented sector that has been the foundation of foreign exchange reserve growth and expansion of debt-financed infrastructure investment.

This chapter examines the strategic coupling of East Asian firms with the global production networks (GPN) of advanced industrialized economies through industrial market specialization. In both industries, the developmental state performed a classic role of the “big push” during the initial phase of their development in the 1970s and the 1980s. These initial public subsidies and state-directed investments could help domestic producers quickly upscale to low-cost leaders in the global market. Their eventual domination in both industries since the 2000s and beyond was no longer based simply on these scale economies, but rather on new advantages developed through firm-specific technological and organizational innovations. The chapter discusses how in this partnership, leading East Asian firms have acquired unique competitive advantages on the basis of new in-house process and product technologies in shipbuilding and semiconductor production.

This introductory chapter uses strategic coupling as an argument for a recasting of the dominant state-centric view of industrial transformation in South Korea, Taiwan, and Singapore. As a midrange concept that connects opportunities in the global economy to development outcomes in national economies (e.g., the rise of domestic firms in different industries) through firm-specific initiatives, strategic coupling helps in understanding industrial transformation and, ultimately, national economic development in an increasingly integrated global economy. The chapter provides a brief reprise of the developmental state in the three East Asian economies. These measurements of industrial attainment typically mask the important role of such economic institutions as national firms. The reprise also sets the baseline for the book's contemporary analysis of the evolving-state-global production networks (GPN) assemblage.

This chapter explores how, through strategic partnership with global lead firms, domestic firms from South Korea, Taiwan, and Singapore can provide cutting-edge design and manufacturing services in the global personal computers and consumer electronics industry. During the 1960s and the 1970s, this industry received significant attention in the developmental state's core program of export promotion. But its transformation from a subservient role of subcontracting to a more technologically capable role of providing original design and manufacturing services took place only in the 1990s and beyond, when these domestic firms became more articulated into diverse production networks coordinated by global lead firms. While this was facilitated by the state's new role in upgrading labor, technology, and infrastructure in the domestic economy, the chapter notes how this was also done through the emergence of global production networks (GPN) as a new organizational structure for global competition.

This chapter explores the emergence of East Asian lead firms in South Korea, Taiwan, and Singapore and discusses how this repositioning as global lead firms represents the arrival of national champions as global leaders in their respective industries and the ultimate success of economic development. Through this distinct coupling process, top East Asian firms, such as Taiwan's Acer; South Korea's Samsung, LG, and Hyundai; and Singapore's Singapore Airlines no longer serve as partners or specialists in global production networks (GPN) controlled by other global lead firms. Instead, they have emerged as lead firms spearheading their own global production networks with not only strong technological and managerial competencies but also deep market knowledge and sustained investment.

This chapter examines the importance of international production and distribution networks in East Asia. It describes the drastic changes in policy framework observed in the Southeast Asian countries and China in the latter half of the 1980s and the early part of the 1990s and discusses the current status of theoretical thoughts explaining the mechanics of international production and distribution networks. This chapter explains the result of statistical analysis on the characteristics of the networks in East Asia and discusses the policy implication of these networks, particularly in the context of formulating free trade agreements.

Chapter 7 addresses the use of cooperative strategies and organizations in the development of global value-adding chains and networks. These global networks comprise not only component manufacture, but also final assembly, marketing, distribution, and even knowledge-based activities such as research and development. These activities are located in many countries and regions, both industrialized and emerging. The chapter notes that transaction cost and resource-based theories and their derivative transaction value perspective offer theoretical support for why cooperative ventures are common in the “outsourcing” that is typical of global production networks. Network concepts help to explain the structuring of global production networks and of the individual transactions that comprise these networks. The chapter also discusses the work of Gereffi and others on global value chains which is particularly informative about cooperative governance types. Modular production models provide a mechanism to structure decentralized networks.