Equitable Global Value Chain and Production Network as a Driver for Enhanced Sustainability in Developing Economies

Abstract

Recent studies on the global value chain (GVC) have highlighted the need to better integrate the value chains of developing countries of the global South with that of the global North regions, which are more highly developed. This is aimed at enhancing the economic and social sustainable upgrading of the value chains of the global South regions. The paper thus seeks to answer a critical question as to whether the existing GVC set-up pertaining to global North and South countries is equitable and whether it would yield the needed socio-economic and wider sustainable benefits, particularly to global South countries. a conceptual Global Value Chain (GVC) model is developed based on the economy-wide and system-based Multi-Regional Input–Output methodology to achieve this goal. Subsequently, this was empirically tested to measure embodied flows in capital and labour for sustainable development between global North and South regions. These are achieved using the GVC networks of the UK (from the global North) and some countries in sub-Saharan Africa (from the global South) to exemplify these developments. With implications for equitable, sustainable development, our study shows significant imbalances exist in the flows of value added activities from the global South to the global North, particularly in the primary industries, which produce low-value products in their raw state. Subsequently, this creates a disproportionate economic disadvantage for South countries. As such, if global South countries are to fully benefit from GVC, the study shows that these imbalances must be addressed, such as through structural changes in the economies of global South countries from their dependencies on the primary industries.