Title: What are the implications for global value chains when the market shifts from the north to the south?

Authors: Raphael Kaplinsky, Masuma Farooki

Addresses: Development Policy and Practice, The Open University, Walton Hall, Milton Keynes, MK7 6AA, UK. ' Development Policy and Practice, The Open University, Chambers Building, Milton Keynes, MK7 6AA, UK

Abstract: This paper charts the evolution of the financial and economic crisis in the global economy and argues that the likely outcome will be sustained growth in the two very large Asian driver economies of China and India and stagnation in the historically dominant northern economies. Given the nature of demand in low income southern economies, it is likely to be reflected in sustained demand for commodities. Based on an analysis of the interaction between the nature of market demand and production processes, this paper argues that the transition in markets from high-income northern to low-income southern consumers will have implications for producers in commodity value chains. In particular it will lead to the diminished importance of standards (often a conduit for capability-growth) and to a reduction in the degree of value added to commodities in exporting economies.

Keywords: China; India; financial crisis; cassava; tropical timber; global value chains; market shifts; commodity value chains; standards.

DOI: 10.1504/IJTLID.2011.041898

International Journal of Technological Learning, Innovation and Development, 2011 Vol.4 No.1/2/3, pp.13 - 38

Published online: 31 Jan 2015 *

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