Volume 68, Issue 3-4 - Special Issue: Shaping Globalisation: Revisiting the State-Global Production Network Nexus; Guest Editors: Martin Hess and Rory Horner

This editorial revisits the state – global production network (GPN) nexus in times of multiple crises affecting the global economy and society. Setting the scene, we first reflect on the role of geopolitics in transforming GPNs under conditions of increasing uncertainty before turning our attention to the ways in which states deal with questions of security and navigate risk. It also highlights the increasingly overt role of strategic state strategies vis-a-vis GPNs. In a second step, we discuss the central, constitutive role of the state in processes of strategic coupling, decoupling and recoupling, before presenting some concluding thoughts.

In an era of multiple crises and geopolitical uncertainty, the need to deal with heightened risk drives states to locate strategic global production networks (GPNs) in geopolitically aligned states, a trend known as friendshoring. In this paper, we contribute to the literature on the role of geopolitics in GPNs by exploring why and how states engage in friendshoring. To this end, we distill from the literature three geopolitical imperatives that, in addition to more conventional GPN imperatives, drive strategic coupling dynamics: reducing risk exposure, (de-)weaponizing supply chains, and maintaining extraterritorial influence. States and state-linked institutions respond to these imperatives by actively “pushing out” new inter- and extra-firm relations in GPNs which often includes previously neglected regions in the global periphery – even when regional assets require substantial transformation. To achieve this, states orchestrate efforts at extraterritorial de-risking, outward-oriented network brokering, and extraterritorial institution-building to actively alter the coupling conditions. By applying our framework to qualitative research on the Chinese soybean GPN in Tanzania and German-led green hydrogen investments in Namibia, we demonstrate how GPN friendshoring relies on both coercion or incentivization orchestrated by the state.

In this article, we present an analysis of how East Asian states (specifically, Japan, South Korea and Taiwan) are adapting to the emerging geopolitical contexts of the ‘great powers competition’ between the United States and China. To the extent that the previous literature on GPN/GVC governance included the state as one of the extra-firm actors, geopolitics has not been explicitly dealt with in its role in shaping GPN/GVC governance. We build on the existing research on GPN/GVC governance and propose a shift in perspective, from one of cost-driven to diplomacy-driven governance. Taking the case of the semiconductor industry, we conduct an analysis of native language sources and examine how regulatory supply chain controls are shaping East Asian industrial and trade policies. Specifically, we focus on how East Asian states are negotiating their dependence on the world’s two largest markets, the United States and China, and developing new policy strategies in order to navigate the dual hegemony. The analysis reveals that, while varying strategies are adopted, multilateral alliances of the states are gaining prominence in GPN/GVC governance. We conclude that a more state-centric analysis of GPN/GVC is in order.

This study addresses the under-researched role of state-owned-enterprises (SOEs) in global value chains/production networks (GVCs/GPNs). It examines how the economic performance, foreign trade, and value capture of Ukrainian firms – classified by ownership, position in GVCs/GPNs, size, and diversification of their customer base – have evolved following the Russia’s occupation of Crimea and parts of Donbas in 2014. The study reveals significant differences in the distribution of SOEs, private, and foreign enterprises between the aerospace/defence and electro-engineering industries. Overall, since the Russian aggression in 2014, the aerospace and defence industries have outperformed electro-engineering firms, largely due to strong state support. The study concludes with broader observations that while even intensive mutual trade could not prevent the war, the war does not necessarily lead to a complete cessation of mutual trade.

A shifting paradigm in economic policy is re-asserting the centrality of the state for the transformative overhaul of global energy systems. Amid a burgeoning interest in state policy, however, contemporary scholarly discussions often lack a comprehensive examination of the state itself. We address this gap in economic geography and international political economy by investigating the nuanced role of the state in structuring global industries, with a focus on the emerging hydrogen economy in the European Union (EU). Further elaborating Horner’s typology of state roles in global production networks (GPN) with Jessop’s strategic-relational approach, this article replaces the states-markets dualism with concrete accounts of the co-constitutive relationships binding together the evolution of the “actually existing” State-GPN Nexus. Accordingly, we identify three underdeveloped analytical entry points, concerning (1) the conjoint interrogation of state roles, (2) finance, and (3) the historical regulatory form of the state. This conceptualization is then applied to three case studies on the developing hydrogen economy in Europe. Despite the prominent role of state capital, initiatives such as EU state aid schemes, the European Hydrogen Bank, and the spatialized industrial policy of Hydrogen Valleys reveal the prioritization of de-risking strategies through public-private partnerships more or less directly designed by democratically unaccountable industry groups.

Under the notion of strategic coupling, GPN scholarship acknowledges the pivotal role of firms and non-firm actors in integrating regions into value chains and in regional development. However, the GPN 2.0 approach has focused largely on firms with limited attention to state managers’ practices in coupling creation. This paper addresses this gap by engaging with Jessop’s strategic-relational approach, Fred Block, and uneven and combined development theory to examine state managers’ action in coupling creation. Examining South Carolina as a case study, the paper argues that its success in attracting foreign direct investments (FDIs) stems from the interplay of state power, a manufacturing fraction of capital, and underdevelopment. South Carolina leverages its underdevelopment to create policies that attract FDIs and promote strategic coupling. Three key dimensions of state action are identified: fluidity and flexibility, commitment to right-to-work status, and alignment of the education system with corporate interests. This research is based on qualitative methods. Thirty-one semi-structured interviews were conducted in South Carolina.

In this paper, we suggest that Global Production Network (GPN) scholars have yet to deal more substantively with how nation-states, often in alliance with firm actors, actively work to create markets for resources in global production networks. We argue in this paper that GPN scholars should be better attuned to both resource-making interventions and the governance of market development. Resource-making highlights the heterogeneity of the biophysical characteristics of physical entities which entails that certain natures are not readily made available as commodities in markets, but require specific infrastructures, technology, and organizational structures for commercialization. When private capital fails to create markets for resources on its own initiative, states may intervene by facilitating resource-making and governing market development through configurations of ownership, commodification, and risk allocation. In this paper, we explore how the relationship between resource-making and market governance shapes the possibilities and limitations for state strategies in global production networks. Our discussion in the paper is informed by an empirical case study of failed plans by the Indonesian government from 2016 to 2019 to draw upon public-private partnerships to create markets for LNG in the peripheral regions of the country. Despite Indonesia’s status as a globally significant LNG exporter, we find that the interorganizational structures and infrastructure needed to deliver natural gas to markets in peripheral regions contradict with the configurations of ownership, commodification, and risk allocation through which the Indonesian government has sought to realize state strategies, thus resulting in the underdevelopment of liquefied natural gas markets in Indonesia.