Worksheet #15
Instructions: Please complete your individual worksheet.
1.
Would you characterize Amsden’s argument as supporting the Marxist, Mercantile or International Business approach? Why?
I would characterize Amsden’s argument as either Marxist or Mercantile. She takes the stance that the previous role/perspective on multinational enterprises may need to change,
as there are more benefits to national firms. From the Marxist perspective, Amsden is saying that MNEs are allowing for the underdevelopment of infant national industries. From the Mercantile perspective, she is showing how foreign national companies working in a nation are only serving their own political interests, which is another motivation to focus less on FDI and more on national enterprises. 2.
In your own words, describe the concept of supplier “upgrading.” Then, describe two types of upgrading, as suggested by Schmitz and Humphrey’s typology.
a.
Definition of upgrading:
Upgrading is the process of organizational learning to improve the position of firm and industries in Global Value Companies. Essentially it allows the company
to not only specialize in what they produce, but in the actual act of production. This can be in forms of mastering the design itself for the product or perhaps improving the production process. Even better marketing serves as a form of “upgrading”.
b.
Upgrading type 1:
Product: Product upgrading involves increasing the value of products being sold.
By making the products more sophisticated, the suppliers can sell at a higher price, thus upgrading their position as a firm.
c.
Upgrading type 2:
Process: Process upgrading is to increase the technology, quality, productivity, and/or standards of methods used to produce. This is comparable to the work of
mechanical and industrial and systems engineers, working to make the process itself more efficient.
3.
If you were running the government of a country in the Global South, what steps would you take to encourage upgrading among national suppliers participating in GVCs?
I would financially incentivize the companies to provide avenues to higher education and training for their employees. Additionally, the tax code could be manipulated to help foster RND and provide grants and subsidies to invest in new machinery. Lowering
interest loans on national businesses may also help foster investment into upgrading.
