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Digitalization and the geographies of production: Towards reshoring or global fragmentation?

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  • Butollo, Florian

Abstract

The relationship between digitalization and the governance and geographies of global value chains has not been explored systematically. This contribution discusses how digitalization affects the variables that determine the localization of manufacturing, i.e. the substitution of work through automation, the deepening of the customer–producer relationship, the rationalization of distribution through digitalized logistics networks, and the increased modularization of supply chains through standardization and ‘platformisation’. The results of the theoretical exploration defy expectations of a straightforward ‘reshoring’ of production through the combined effects of automation and benefits through a co-localization of companies within their target markets. Tendencies that would support a stronger integration of production in advanced economies are instead being undercut by ongoing countertrends towards fragmentation. The contradictory tendencies of a geographical integration of manufacturing and target markets on the one hand and geographical fragmentation through sophisticated supply-chain organization on the other will affect the technologically facilitated processes of value chain restructuring in a sector-specific manner.

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  • Butollo, Florian, 2021. "Digitalization and the geographies of production: Towards reshoring or global fragmentation?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(2), pages 259-278.
    • Handle: RePEc:zbw:espost:227772
    DOI: 10.1177/1024529420918160
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    2. López, Tatiana & Riedler, Tim & Köhnen, Heiner & Fütterer, Michael, 2022. "Digital value chain restructuring and labour process transformations in the fast-fashion sector: Evidence from the value chains of Zara & H&M," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22(4), pages 684-700.
    3. Kinkel, Steffen & Capestro, Mauro & Di Maria, Eleonora & Bettiol, Marco, 2023. "Artificial intelligence and relocation of production activities: An empirical cross-national study," International Journal of Production Economics, Elsevier, vol. 261(C).
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    5. Mostafiz, Md Imtiaz & Musteen, Martina & Saiyed, Abrarali & Ahsan, Mujtaba, 2022. "COVID-19 and the global value chain: Immediate dynamics and long-term restructuring in the garment industry," Journal of Business Research, Elsevier, vol. 139(C), pages 1588-1603.
    6. Huiwen Gong & Robert Hassink & Christopher Foster & Martin Hess & Harry Garretsen, 2022. "Globalisation in reverse? Reconfiguring the geographies of value chains and production networks [Does Covid-19 Spark the End of Globalisation?]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 165-181.
    7. Langford, Kieran & Kille, Tarryn & Lee, Seung-Yong & Zhang, Yahua & Bates, Paul R., 2022. "“In automation we trust” - Australian air traffic controller perspectives of increasing automation in air traffic management," Transport Policy, Elsevier, vol. 125(C), pages 352-362.
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    9. Pinheiro, Alexandra & Sochirca, Elena & Afonso, Oscar & Neves, Pedro Cunha, 2023. "Automation and off(re)shoring: A meta-regression analysis," International Journal of Production Economics, Elsevier, vol. 264(C).
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    11. Christian Reiner, 2022. "It's the End of Globalization as We Know It! Zeitgemaesse Betrachtungen zur politischen Oekonomik der Globalisierungskrise," ICAE Working Papers 141, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
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