Gary Gereffi

The biggest risks for supply chains

What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies

The COVID-19 pandemic has caused a dramatic shortage in the medical supplies needed to treat the virus due to a massive surge in demand as the disease circled the globe during the first half of 2020. Prior to the crisis, there was an interdependence of trade and production for medical supplies, with advanced industrial countries like the United States and Germany specializing in the relatively high-tech medical devices sector, while low-cost production hubs such as China and Malaysia were leading producers of less technologically sophisticated personal protective equipment (PPE) products such as face masks, surgical gloves, and medical gowns. After the COVID-19 outbreak, global shortages of PPE products emerged as many affected countries imposed export controls and sought ways to boost domestic output. A case study of the face mask value chain in the United States shows misalignments between the priorities of U.S. federal government officials and the strategies of leading U.S. multinational producers of face masks, which resulted in exceptionally costly policy delays in terms of health outcomes. On balance, the U.S. shortage of N95 respirators during the COVID-19 pandemic is more a policy failure than a market failure. The global value chain framework highlights strategic options that could lead to more resilient supply chains and diversified sourcing patterns.

Handbook on Global Value Chains

Global value chains (GVCs) are a key feature of the global economy in the 21st century. They show how international investment and trade create cross-border production networks that link countries, firms and workers around the globe. This Handbook describes how GVCs arise and vary across industries and countries, and how they have evolved over time in response to economic and political forces. With chapters written by leading interdisciplinary scholars, the Handbook unpacks the key concepts of GVC governance and upgrading, and explores policy implications for advanced and developing economies alike.

Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in

This article argues that the global value chains (GVC) perspective bridges the firm-specific, private-sector and country-level, societal divide that has separated the international business and international economics literatures. A key mechanism that explains the policy impact of the GVC approach are the networks created between the policy entrepreneurs inside the international organizations (IOs) dealing with economic development and the idea entrepreneurs in the research community. The policy engagement of various segments of the GVC research community with development-oriented IOs has increased the scope and visibility of the GVC literature, and improved the quality and relevance of the findings from selected GVC research programs. However, one of the drawbacks of this collaboration has been the multiple meanings attached to the GVC concept and its policy usages within the IOs and national policy communities. The GVC framework remains centrally involved in contemporary research frontiers, including the impact of tariffs on national competitiveness and innovation systems, the digital economy, the future of manufacturing, the co-evolution between local economic clusters and global production networks, and the role of foreign direct investment in establishing complete value chains as a catch-up strategy in developing economies.