Global value chains and digital platforms: Implications for strategy. (19th January 2022) - Loonam, John
Abstract: The emergence of global value chains (GVCs) appears due to the rise of international trade deregulation and market liberalization over the past decades. The rise of information and communication technologies, which supports knowledge‐intensive activities, has also radically transformed value capture across GVCs and raises the bar for value‐creating opportunities as a new generation of technologies emerges. Of particular relevance to GVCs is the rise of digital technologies, such as big data, the Internet of Things, and artificial intelligence. These technologies promise to herald a new era of connectedness, collaboration, and innovation, affording significant growth opportunities for GVCs. Digital platforms will play a key role for GVCs in orchestrating such value‐creating opportunities. There remains a lack of empirical understanding of how digital platforms can enable GVC strategy. The study seeks to address this question by reviewing the digital platform literature to support key GVC strategy learnings. Specifically, 61 "digital platform"–titled articles across 38 Chartered Association of Business Schools (ABS)‐ranked journals were reviewed. The study adopts Mainardi and Kleiner's (Strategy + Business, 2010, 61, pp. 1–14) "strategy landscape" framework to organize emerging findings. Eight key themes emerged from the literature to reveal critical issues for digital platforms. Implications for strategy are then discussed, revealing four key learnings for GVCs, namely, (i) boundary management, (ii) definition of the unit of analysis, (iii) alignment of capabilities, and (iv) governance and leadership.