Social Upgrading in Global Value Chains—The Role of Labor and Industrial Relations

This chapter focuses on the role of labor for social upgrading in the Global South and discusses different analytical approaches such as governance modes of global value chains, labor process theory, the power resources approach, transnational labor governance, and national systems of industrial relations. Power asymmetries between lead companies in the Global North, which often capture most of the value added, and suppliers in developing countries can contribute to an understanding of transnational economic relations. The authors point to the importance of national systems of industrial relations in offering explanations for different social upgrading trajectories depending on the institutional context in target countries in the Global South. However, the authors argue that any of the approaches alone is not capable of satisfactorily conceptualizing the factors that influence social upgrading. In contrast, they illustrate with the example of their own empirical analyses how some of the above approaches can be gainfully combined. They draw the conceptual conclusion that the chances of a ‘labor-centered’ pathway of social upgrading vary depending on both industry-specific value chain governance and country context.