Global Value Chains: Some Examples and Resulting Issues

Abstract The Bottom of the Pyramid (BOP) approach can be combined with the Global Value Chain (GVC) approach. The challenge is to develop products or services for the Bottom of the Pyramid through unconventional partnering and empowering local producers and stimulating local value creation. This requires a focus on innovation, while keeping an eye open for sustainability. The big advantage of the GVC approach is that the development of economic activities is put in a context of resources and markets, of local, regional and international economies, of individual entrepreneurs and clusters, of competing in local, regional or international markets. The Global value chain concept is not new, but the global value concept came up when the discussion of the effects of globalization started and can be considered to be more encompassing than the other terms. Products which have been studied extensively under this angle are commodities, garments and textiles, leather products and electronics. In this paper four studies concerning the value chain will be pulled together to show how GVC and BOP approaches can be combined. It is concluded that upgrading of GVCs is possible and the GVC and the BOP approach can be combined. This requires the development of business models that link small producers to the GVC. In an increasing number of countries private firms play the role of extension service and marketing institution and farmers accept to pay for their services. It is important to stimulate innovation in these value chains and all kinds of projects may be necessary to promote value chain development