scholarly journals Labor and environment in global value chains: an evolutionary policy study with a three-sector and two-region agent-based macroeconomic model

Author(s):  
Lena Gerdes ◽  
Bernhard Rengs ◽  
Manuel Scholz-Wäckerle

AbstractThe world economy crucially depends on multi-layered value chains with high degrees of sector-related specialization. Its final products are of international character and serve the needs and wants of the global citizen. However, many production processes are causing severe damage to the environment and moreover create health hazard for workers and local populations. This research article focuses on the increasing global unequal economic- and ecological exchange, fundamentally embedded in international trade. Resource extraction and labor conditions in the Global South as well as the implications for climate change originating from industry emissions in the North are investigated with an agent-based model. The model serves as a testbed for simulation experiments with evolutionary political economic policies. An international institution is introduced sanctioning the polluting extractivist sector in the Global South as well as the emitting industrial capital good producers in the North with the aim of subsidizing innovation reducing environmental and social impacts. Both regions are modelled as macroeconomic complex adaptive systems where international trade is restricted to a three-sector value chain, originating from mining resources in the South that are traded to capital good producers in the North crafting machinery which is eventually traded to consumer good firms, both in the North and South. The main outcome of the study is that sanctions alone are not effective in countering unequal exchange. They only make a difference in combination with subsidies for innovation activities, which are protecting labor and reducing local pollution in mines as well as reducing carbon-emissions in capital good production.

Author(s):  
Alastair Orr ◽  
Jason Donovan ◽  
Dietmar Stoian

Purpose Smallholder value chains are dynamic, changing over time in sudden, unpredictable ways as they adapt to shocks. Understanding these dynamics and adaptation is essential for these chains to remain competitive in turbulent markets. Many guides to value chain development, though they focus welcome attention on snapshots of current structure and performance, pay limited attention to the dynamic forces affecting these chains or to adaptation. The paper aims to discuss these issues. Design/methodology/approach This paper develops an expanded conceptual framework to understand value chain performance based on the theory of complex adaptive systems. The framework combines seven common properties of complex systems: time, uncertainty, sensitivity to initial conditions, endogenous shocks, sudden change, interacting agents and adaptation. Findings The authors outline how the framework can be used to ask new research questions and analyze case studies in order to improve our understanding of the development of smallholder value chains and their capacity for adaptation. Research limitations/implications The framework highlights the need for greater attention to value chain dynamics. Originality/value The framework offers a new perspective on the dynamics of smallholder value chains.


Author(s):  
Alastair Orr ◽  
Jason Donovan

Purpose The purpose of this paper is to introduce a new conceptual framework for smallholder value chains based on complex adaptive systems. Design/methodology/approach The authors review the application of the framework to three case studies and explore their implications. The authors reflect on the value of a framework based on complex adaptive systems compared to alternative frameworks. Findings The authors argue that the dynamics of smallholder value chains have received insufficient attention. Research limitations/implications By focusing on these dynamics and on the capacity for adaptation among value chain actors the framework provides a new perspective on smallholder value chains. Originality/value Complex adaptive systems provide a useful framework for analyzing value chain dynamics.


Author(s):  
Richard Lamboll ◽  
Adrienne Martin ◽  
Lateef Sanni ◽  
Kolawole Adebayo ◽  
Andrew Graffham ◽  
...  

Purpose The purpose of this paper is to explain why the high quality cassava flour (HQCF) value chain in Nigeria has not performed as well as expected. The specific objectives are to: analyse important sources of uncertainty influencing HQCF value chains; explore stakeholders’ strategies to respond to uncertainty; and highlight the implications of different adaptation strategies for equity and the environment in the development of the value chain. Design/methodology/approach The authors used a conceptual framework based on complex adaptive systems to analyse the slow development of the value chain for HQCF in Nigeria, with a specific focus on how key stakeholders have adapted to uncertainty. The paper is based on information from secondary sources and grey literature. In particular, the authors have drawn heavily on project documents of the Cassava: Adding Value for Africa project (2008 to present), which is funded by the Bill & Melinda Gates Foundation, and on the authors’ experience with this project. Findings Policy changes; demand and supply of HQCF; availability and price of cassava roots; supply and cost of energy are major sources of uncertainty in the chain. Researchers and government have shaped the chain through technology development and policy initiatives. Farmers adapted by selling cassava to rival chains, while processors adapted by switching to rival cassava products, reducing energy costs and vertical integration. However, with uncertainties in HQCF supply, the milling industry has reserved the right to play. Vertical integration offers millers a potential solution to uncertainty in HQCF supply, but raises questions about social and environmental outcomes in the chain. Research limitations/implications The use of the framework of complex adaptive systems helped to explain the development of the HQCF value chain in Nigeria. The authors identified sources of uncertainty that have been pivotal in restricting value chain development, including changes in policy environment, the demand for and supply of HQCF, the availability and price of cassava roots, and the availability and cost of energy for flour processing. Value chain actors have responded to these uncertainties in different ways. Analysing these responses in terms of adaptation provides useful insights into why the value chain for HQCF in Nigeria has been so slow to develop. Social implications Recent developments suggest that the most effective strategy for the milling industry to reduce uncertainty in the HQCF value chain is through vertical integration, producing their own cassava roots and flour. This raises concerns about equity. Until now, it has been assumed that the development of the value chain for HQCF can combine both growth and equity objectives. The validity of this assumption now seems to be open to question. The extent to which these developments of HQCF value chains can combine economic growth, equity and environmental objectives, as set out in the sustainable development goals, is an open question. Originality/value The originality lies in the analysis of the development of HQCF value chains in Nigeria through the lens of complex adaptive systems, with a particular focus on uncertainty and adaptation. In order to explore adaptation, the authors employ Courtney et al.’s (1997) conceptualization of business strategy under conditions of uncertainty. They argue that organisations can assume three strategic postures in response to uncertainty and three types of actions to implement that strategy. This combination of frameworks provides a fresh means of understanding the importance of uncertainty and different actors’ strategies in the development of value chains in a developing country context.


Author(s):  
Myeong Ho Lee

The trend toward convergence, initiated by advances in ICT, entails the creation of new value chain networks, made up by partnerships between actors in unrelated industries. Such a process of convergence, however, can create a new dimension of network complexity, precipitating dynamic behavior among actors. In this paper we seek to understand how different actors in value chain networks have co-evolved in practice with the development of convergence services. Interpretative case studies on two different converged services in Korea (mobile banking, and One phone services) are undertaken to examine how different actor network adapted in different ways to shape the overall complexity of the converged service. The case study analysis is innovative in being conducted within a combined framework of Complex Adaptive Systems and Actor Network Theory. This synthesis offers a way to characterize the drivers of co-evolutionary behavior, capturing the translation processes undergone by actor networks.


Author(s):  
Professor Michael E. Wolf-Branigin ◽  
Dr William G. Kennedy ◽  
Dr Emily S. Ihara ◽  
Dr Catherine J. Tompkins

2008 ◽  
Vol 8 (2) ◽  
pp. 131-141 ◽  
Author(s):  
A. Ainsley Archer ◽  
Peter Thorburn ◽  
Phil Hobson ◽  
Andrew Higgins

Making strategic innovations to agricultural value chains can be difficult. Complex biophysical and logistical interactions make a priori estimates of chain-wide impacts difficult. This paper gives the results of applying an agent-based, value chain modelling framework, developed and applied in participation with stakeholders in three sugar mill case studies, which evaluated the viability of maximising the co-generation of electricity by harvesting the whole crop (i.e. cane leaves as well as stalk). The existing practice of harvesting predominantly cane stalk (as in the 2003 production year) was the base case for comparing a scenario where electricity co-generation (from crop residues) was an added revenue stream. Increased revenues were compared to costs within sectors as per changes in biophysical flows for the grower, harvesting, transport and milling segments in the chain. In general, predicted impacts on the farming and milling sectors were greater than anticipated by stakeholders, while the impacts on the harvesting and transport sectors were less than anticipated because of increased logistical efficiency possible in the sectors. A virtual experience of their supply chain facilitated more complete knowledge transfer about possible impacts of whole-crop harvesting to managers across the chain and thus increased their capacity to evaluate innovative business models involving the co-generation of electricity.


Agent based modeling is one of many tools, from the complexity sciences, available to investigate complex policy problems. Complexity science investigates the non-linear behavior of complex adaptive systems. Complex adaptive systems can be found across a broad spectrum of the natural and human created world. Examples of complex adaptive systems include various ecosystems, economic markets, immune response, and most importantly for this research, human social organization and competition / cooperation. The common thread among these types of systems is that they do not behave in a mechanistic way which has led to problems in utilizing traditional methods for studying them. Complex adaptive systems do not follow the Newtonian paradigm of systems that behave like a clock works whereby understanding the workings of each of the parts provides an understanding of the whole. By understanding the workings of the parts and a few external rules, predictions can be made about the behavior of the system as a whole under varying circumstances. Such systems are labeled deterministic (Zimmerman, Lindberg, & Plsek, 1998).


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