Reconfiguring global value chains in a post-Brexit world: A technological interpretation

Abstract

With the uncertainties that it may entail in terms of possible trade barriers between the UK and the EU, increased exchange rate risk, restrictions on the establishment of professionals and possible changes in regulations on the environment, tax and protection of competition, Brexit could exacerbate the process of re-localisation of operations that commenced to a small extent some years ago. This process was based on technological innovations under the heading of Industry 4.0, and more recently strengthened by the supply problems that came to light during the handling of the Covid-19 pandemic. Although the social, political and institutional context matters a lot, we believe that technology is going to be a conditioning element in the ability of businesses to reconfigure the value chains in which they are involved. We propose a typology based on this technological perspective that could have considerable potential impact in defining business strategies in numerous industries and in orienting industrial policy in countries striving to acquire a more central role or to prevent themselves from being cut out of the global value chain.