CAPTURING
THE
GAINS

economic and social upgrading
in global production networks



Capturing the Gains Briefing Notes 03

Global value chains, upgrading and poverty reduction

Joonkoo Lee, Gary Gereffi and Stephanie Barrientos

Abstract

Global value chains (GVCs) are changing the way trade is conducted and value is created and captured. As more trade is organized through close coordination between buyers and suppliers, moving to high value-added activities, or economic upgrading, is critically determined by lead firms, particularly global buyers. However, growing evidence shows that economic upgrading of producers does not necessarily lead to social upgrading of workers, and the relationship is complicated by GVC restructuring in a post-crisis world. Dynamic monitoring of global and regional chains, joint public-private support for value chain upgrading, and improved trade metrics will provide more effective policy interventions for poverty reduction in a rapidly changing global trade environment.

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