Transforming global value chains amidst the COVID-19 crisis

Abstract

The reasons for the decline in the importance of global supply chains for international trade relations may be the creation of the new, politically motivated barriers to international trade and an attempt to replace foreign-made goods with domestic counterparts. Therefore, the issue of reducing global supply chains has been discussed by many experts in recent years. However, despite the decline in their importance, global supply chains are often becoming the subject of various scientifi c research. During the crisis caused by the spread of the coronavirus infection, global value chains are criticized again for the fact that they are not functioning any longer, which, by the way, corresponds to the progressive fi nancial crisis. Amidst this background, greater “reintegration” of production processes into the company’s own network, less emphasis on the just-in-time production and expansion of warehouse capacity become priority measures aimed at ensuring continuous production of products. Of particular importance is the question of the feasibility of returning production facilities to the country of the headquarters in the light of the accelerated and eff ectively implemented robotization of production. All this poses a signifi cant threat to the sustainable economic growth of many developing countries and emerging market economies that depend on the cheap production and export of semi-fi nished products, components and the products of the intermediate use. A coordinated political response, such as that off ered by the United Nations and other multilateral political institutions and organizations, is perhaps the most promising way out of the impending economic recession. Diff erent industries will probably need diff erent time spans to return to the normal functioning. The question if globalization remains as a trend of the development of the international economic relations in the near future, will assess the viability of the concept of the international division of labour, will lead to the transformation of the global value chains, and create incentives for states and business entities for the creation of more stable structures during the forthcoming decade.