Abstract

"Seven Generations of Global Value Chain"

Haruo Horaguchi, Hosei University (horaguch@hosei.ac.jp)

This research proposes a yardstick to measure the evolution of global value chain (GVC) in terms of relative ages. We define a generation of GVC as an epoch in which international businesses have evolved. Understanding the historical evolution of capitalism is essential for gaining a long-term historical perspective regarding the measurement of the chronological rate. We identify seven generations of the GVC and discover that technological innovation diffused over a few generations of GVCs. This proposition is verified by tracing the GVC generations and the innovation of typical products and production systems. The first generation, mercantilism, began at the end of the 15th century. The second generation, the Industrial Revolution, commenced around the second half of the 18th century. They lasted for exceptionally long periods. The third generation, imperialism; the fourth, the inter-war period; the fifth generation, Cold War period, and the sixth generation, globalism, lasted for about 31–45 years. A non-linear regression analysis indicates that the seventh generation, which began in 2020, may last approximately 22 years. The first two generations of GVCs lasted for an exceptionally long time-span. The third to sixth generations each lasted a range of about 31–45 years. Since the COVID-19 pandemic, we have been experiencing the seventh generation of GVC. Thus, the duration of one generation of capitalism has become shorter than humans’ lifetime. The generations of GVC change faster than human life expectancy or the duration of business enterprises, indicating that they do not follow natural selection processes but can be built purposefully by corporate strategy. This study has an implication for businesses and policy makers that long-term planning is essential for surviving future generations of GVC. Hence, humans’ conscious efforts in GVC will play a pivotal role in shaping the seventh generation.