Digital and Decentralized Global Value Chains?

The landscape of international trade today is primarily characterized by the complex spatial and organizational dispersion of production processes globally. Extant research on global value chains (GVCs) focuses on the role of firms, especially leading multinational enterprises (MNEs), as well as national governments in shaping the processes, policies, and coordination within production networks. Yet, in a rapidly digitalizing global economy, characterized by the catchphrase “Industry 4.0,” GVCs are becoming increasingly transparent through digital accounting and heightened data visibility into production processes, thereby reducing some of the informational advantages long enjoyed by both MNEs and national governments. This article examines GVCs in the digital era, where the advent of blockchain technology augurs a fundamental shift in how transnational production processes are conducted and reported and how supply chains are coordinated. Specifically, how and under what conditions does blockchain technology shape GVC processes, coordination, and governance? What are the resulting challenges of applying blockchain technology to GVCs? This article argues that blockchain technology enhances transparency, traceability, accountability, and coordination of production processes within GVCs and helps to shape socially responsible business policies, albeit national governments and lead firms still occupy powerful positions within supply chain networks. Using two illustrative case studies—the IBM Food Trust (IFT) and the De Beers diamond blockchain programs—this article contributes to the international political economy literature by considering the digitalization of international trade and the impact of disruptive technologies such as blockchains on the conduct, coordination, and governance of GVCs.