Call for papers: Early career researchers workshop 'From Rising Powers to Interdependent Futures', 21 June 2017, Manchester

The emergent economies, most notably China, India, Brazil, South Africa, and Russia are no longer ‘emergent’. They are at the centre of the global stage. As economic actors, these Rising Powers exercise large-scale influence on: global governance; global production, trade, labour and financial flows; the environment; the generation of new knowledge and innovation; and geo-political relationships. These changes have implications for other developing countries' engagement with the Rising Powers. They also have consequences for the developed world as it negotiates new relationships and partnerships with the Rising Powers. We are, thus, witnessing a key transformative moment in world history, with implications that will shape the global economy, and global economic and social relationships over the next few decades.

This early career researchers’ workshop is linked to a larger international conference on the same core themes, which concludes the ESRC ‘Rising Powers and Interdependent Futures’ research programme. The workshop aims to give early career researchers an opportunity to present and discuss their research related to the Rising Powers, and to exchange their ideas and findings with peers, senior academics and other experts on the subject.

We encourage proposals for papers from across the social sciences, including but not limited to anthropology, political science, development studies, geography, law, and economics.

Contributions are especially invited around the following themes:

• Innovation systems, emerging technologies, and the roles of the Rising Powers in shaping global innovation
• The roles of the Rising Powers in peace and security architectures at regional and global levels
• The roles played by the Rising Powers in cross-border relations and in shaping regional integration with neighbouring countries
• South-South cooperation and the emergence of Rising Powers as actors in international development
• Rising Powers, global partnerships and financing for development
• The impact of the Rising Powers on developing countries through changes in the global economy
• Social and environmental issues within the Rising Powers
• Impact of the Rising Powers on social and environmental issues beyond their borders, e.g. South-South cooperation and investment in low carbon technologies, engagement in global governance on social and environmental standards, climate change, etc
• Changing geographies of global development in the context of the Sustainable Development Goals
• Southern identities or the cultural dimension of ‘Southerness’ that is implicit in claims of affinities within the global South
• Rising Powers roles in changing geographies and governance of global value chains and global production networks
• Papers on any other areas that help understand the ways in which the Rising Powers shape our interdependent future

Deadlines:
- Abstract submission: 10 March 2017. Please send your abstract (max. 300 words) to natalie.langford@manchester.ac.uk and corinna.braun-munzinger@manchester.ac.uk indicating 'early career workshop' in the subject line

- Full paper submission: 12 May 2017 (max. 8,000 words excl. abstract, notes, references etc.) Papers will be circulated to discussants prior to the workshop.

There is no registration fee for the workshop. Refreshments and lunch will be provided. Unfortunately, we are unable to reimburse travel and accommodation expenses.

Filling “institutional voids”? Pharmaceutical multinationals and intellectual property regimes in rising powers

By Rory Horner, University of Manchester

Image by jk1991, FreeDigitalPhotos.net

In a recent special issue of Critical Perspectives on International Business Rory Horner observes how established multinational pharmaceutical firms are seeking, with different degrees of success, to alter the intellectual property institutional environment in rising power economies. The contrasting cases of India and South Africa highlight that MNEs’ attempts to fill so-called “institutional voids” may not always fit with societal best interests.

Rising power economies are potentially major growth opportunities for multinational companies. In the pharmaceutical industry, the “pharmerging” markets include the BRIC (Brazil, Russia, China and India) countries as well as Mexico, Turkey and South Korea, are a major focus for expansion.

Established multinationals counter a different institutional environment in emerging economies. Notably, they can encounter different systems of pharmaceutical patent protection – with either shorter duration and/or narrower scope of patentability in the global South.

The rising power economies are currently a key focus of contestation around the setting of IP rules. The dramatic growth of the BRIC countries could potentially challenge the trade rules around patents, including those in pharmaceuticals, which have been mostly driven by firms and countries from the Global North.

Continued business and diplomatic pressure from the Global North has and is being placed to secure and maintain extensive and long patent protection, with rising powers subject to particular attention. This was true in the formation of the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement, as well as recently with intense debate around proposed recent changes in India, Brazil and South Africa.

The contrasting cases of India and South Africa are explored in this new article. Although both involve MNEs seeking to influence pharmaceutical patent law, South Africa has been quite prolific in granting patents, whereas India has been less so and has long been a thorn in the side of multinationals as a result.

India – MNEs’ struggle for institutional change
India has also been at the centre of contestation around pharmaceutical patent laws. Benefiting from local technological capabilities and restrictions on MNEs, product patents were removed in 1970 and domestically-owned pharmaceutical companies grew rapidly. With the onset of economic reforms in 1991, India has since risen to become the supplier of the third largest volume of pharmaceutical products in the world. In response, multinationals consistently sought and succeeded in securing patent law change in India, and India was even seen as a key motivation for the broader US efforts in relation to patents in the trade negotiations leading to the formation of the WTO and the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement.

Even since TRIPs was agreed to in the late 1980s, multinationals have continued to seek to influence India’s pharmaceutical patent laws. India has constantly featured in the United States Trade Representative’s annual Special 301 Report, introduced in 1989 to identify trade barriers for US companies due to IP laws. India has never dipped below “Priority Watch List” level on the Special 301 Report in its 27 editions to 2015. This pressure continued after India issued its first compulsory license under TRIPs in March 2012 to Natco Pharma to produce Nexavar.

South Africa – MNEs’ efforts to maintain broad patentability
South Africa is a contrasting case to India, with a much wider degree of patentability. With patent legislation in place as early as 1916 and the current statute since 1978, a later Intellectual Property Laws Amendment Act was passed in 1997 (subsequently amended in 2002 and 2005) to make South Africa TRIPs-compliant. MNEs have engaged in significant efforts to maintain the relatively broad scope of patentability, notably in two quite recent controversies.

South Africa’s pharmaceutical patent laws initially came to global attention in the late 1990s with a high-profile court case over proposed reforms to the Medicines and Related Control Substances Act to allow for parallel importing and compulsory licensing. The Pharmaceutical Manufacturers’ Association (PMA) of South Africa (mainly comprised of multinational or MNE subsidiaries as members) claimed the proposed reforms were in violation of WTO TRIPs obligations and unconstitutional. The MNE campaign however was visibly challenged by civil society organisations, most notably the Treatment Action Campaign (formed in December 1998). Although the lawsuit was eventually abandoned, South Africa has continued to be quite generous in granting of patents, more than international law requires and lacking many of the flexibilities present in the WTO’s TRIPs Agreement.

Recent proposed reforms to South Africa’s laws, in the form of a Draft National Policy on Intellectual Property put forward by the South African Department of Trade and Industry in 2013, have also attracted considerable controversy. Providing for higher standards for patentability, as well as possibilities of pre-grant opposition, the draft policy has attracted concern from international business groups and pharmaceutical MNEs. For example, the proposal was noted in the US Chamber of Commerce’s (GIPC) submission (7 February 2014, USTR– 2013-0040) to USTR’s 2014 Special 301 Report. A campaign coordinated by a firm Public Affairs Engagement, funded by PhRMA and the Pharmaceutical Association of South Africa (IPASA), to derail the reforms, attracted widespread condemnation. This campaign of MNEs attracted criticism from the Director General of the World Health Organisation, from Médicines Sans Frontières and from the South African Health Minister.

Beyond the “institutional void”
Rising powers cannot be accurately characterised as “institutional voids” which MNEs should fill for societal benefit, as some business strategy literature would suggest. Instead, in emerging economies, MNEs encounter a plethora of institutions that may be suited to serving local societal interests, such as the growth of emerging economy firms and serving health interests. Ultimately, rising powers may not be expected to inevitably converge towards or emulate those institutional environments practised in the Global North, but instead are likely to set their own agendas in accordance with their increasingly heterogeneous interests.

Call for papers: Workshop on ‘Rising Powers and Labour Standards in Global Production Networks’, 19-20 June 2017, Manchester

The ‘Rising Powers’, especially China, India and Brazil, have now become key players in the global economy. Yet, we still know too little about how these economies are engaging with and potentially shaping, the rules that govern international trade and global production, in particular global labour and social standards. For producers around the world, meeting international standards on social and environmental sustainability is increasingly critical. We are now more aware about the food we eat and how it came to our plates, or whether what we wear implied sweatshop labour. Nonetheless, gains from social compliance – especially for workers and poor producers – remain unclear. Expanding trade between the Rising Power economies, their growing domestic consumer markets and the emergence of leading firms from China, India and Brazil raise questions on how global standards will be shaped in the future, who the key drivers will be, and what implications arise for workers in both these emerging economies and throughout the global economy.

This workshop will present findings from work undertaken in Brazil, China, India and the EU, as part of an ESRC funded project on labour standards and the governance of global production networks. It also aims to bring together a wider community of academics and practitioners working on labour and sustainability standards in the global economy, but with a particular interest on the ‘Rising Powers’ and how they might sustain, challenge, or change the global discourse on labour and sustainability standards. Hence, we particularly invite proposals for papers around the following themes:

• The emergence of rising power MNCs, their engagement with CSR and social standards, and the implications for global labour and social standards in global value chains
• The role of innovation, CSR, and human rights in global value chains
• The engagement of civil society actors in the rising powers with local and/or global CSR initiatives and social standards
• Public labour regulation in Brazil, China and India and the engagement of these countries in the international institutions where trade rules on labour and social standards are defined
• The implications of the rise of Brazil, China and India for labour and social standards in OECD and developing economies

Deadlines:

• Abstract submission: 24 February 2017. Please send your abstract (max. 300 words) to khalid.nadvi@manchester.ac.uk and natalie.langford@manchester.ac.uk

• Full paper submission: 12 May 2017 (max. 8,000 words excl. abstract, notes, references etc.) Papers will be circulated to discussants prior to the workshop.

Accommodation costs in Manchester will be covered for authors of accepted papers.

Giving workers employment rights increases productivity and profitability

By Boni Sones, University of Cambridge

Image by Stuart Miles. FreeDigitalPhotos.net

We live in a globalised world and buy products produced by workers’ from all over the World. Increasingly consumers are demanding that those who produce our goods are employed on decent terms and conditions whether they work in Europe, Africa, India, Russia, China or South America. Sweatshop labour used in one continent is often named and shamed in another and these reputational effects can affect demand for goods. But as consumers ask for more fairtrade goods from the developing world, workers in the so called global North are finding that their employment is more insecure, as greater numbers are employed on zero hour contracts, while all workers are finding it harder to access employment tribunals to enforce their employment rights.

The Centre for Business Research at the University of Cambridge has turned conventional wisdom on its head, and through a series of quantitative research projects over a number of recent years, has constructed a new database that reveals how improvements in labour rights can lead to increased productivity and employment as well as greater equality in society. These datasets are now online for others to access and use.

International organisations are taking note of these findings and national governments would do well to consider them. Globalisation, rather than inducing a so called ‘race to the bottom’ as many commentators predicted, is making governments more aware of the need for improved protections for workers, and of the importance of enforcement. Better informed and discerning consumers who are switched on to the web and social media where they can check the sourcing of the products they buy, along with campaigning civil society groups and NGOs, are helping to enforce these values.

The statistical studies carried out by the CBR complement qualitative research carried out by the Global Development Institute at The University of Manchester.

In a recent CBR workshop held in Cambridge in September 2016 researchers from both Universities discussed the findings from ESRC-funded research on labour law reforms, labour standards and corporate social responsibility (CSR) practices in Rising Powers, including China, India, South Africa and Brazil.

Many commentators have doubted that worker-protective labour laws can be made effective in developing countries with high levels of informal work and weak states. This has led to interest in alternative modes of regulation including codes of practice and consumer boycotts focused on global supply chains. But this focus neglects important changes on the ground in low- and middle-income countries in Africa and Asia which over the past decade have been implementing systematic reforms to their labour laws and codes, sometimes after much publicised strikes.

Admittedly the aims of these reforms are diverse: they include promoting industrial peace, encouraging employers to invest in training, and cushioning the effects of labour migration. Often these interventions have had the effect of encouraging formalisation of work and building state capacity. They have also operated in conjunction with, rather than in opposition to, voluntary measures and soft-law initiatives aimed at improving labour governance in value chains.

Encouragingly, while there are still many difficulties associated with the operation of labour standards in emerging markets, empirical work is revealing a more complex and differentiated picture than that frequently presented. There is good reason to be optimistic about these trends.

The two day workshop presented findings of two main types:

• Results from quantitative research analysing a unique dataset of labour laws around the world, constructed at the CBR in Cambridge. 
• Research from fieldwork conducted in case study countries, including China, Brazil, India, and South Africa, by teams based respectively at the Universities of Cambridge (Simon Deakin and colleagues) and Manchester (Khalid Nadvi and colleagues). 

The research undertaken by the Cambridge team deploys a unique dataset, the CBR Labour Regulation Index, which codes for labour laws in 117 countries over the period 1970 to 2013 (43 years). It is the first time that the laws of so many countries have been coded in this way and the dataset will be of very considerable interest to research users and policy makers.

The fieldwork research also breaks new ground in offering in-depth analyses of the implementation of labour law reforms in such contexts as Guangdong province in China, and on the interaction of labour laws with private labour standards operating in global supply chains.

The qualitative case studies undertaken by the Manchester team explore how lead firms in the rising powers engage with labour standards and CSR practices in their now increasingly global supply chains, and investigate the influence of civil society actors as well as the state in the development of private regulatory initiatives and in framing the discourse on labour standards.

For more details:

Listen to our CBR podcast series that features interviews with speakers at the workshop on Labour Standards and Labour Law Reforms in the Rising Powers, held in Cambridge on 5-6 September 2016.

Publications from the two projects are also available here:

• output from the Manchester project on the Rising Powers website 
• output from the Cambridge project on the Rising Powers website and on the University of Cambridge website

Professionals from across sectors meet to discuss and deliberate on India and Sustainability Standards

By Centre for Responsible Business (CRB)

Hon’ble Minister for Micro, Small and Medium

Scale Enterprises, Shri. Kalraj Mishra,
inaugurating the conference

The Centre for Responsible Business (CRB) along with its partners organised a three-day international conference on Sustainability Standards at Hyatt Regency, New Delhi, from 18th - 20th November, 2015. With 50 partners, 23 sessions and 500 plus delegates & speakers, India and Sustainability Standards: International Dialogues and Conference 2015, was a landmark event that succeeded in achieving its goal of convening international and Indian stakeholders to initiate dialogue, build understanding, and exchange proposals centered on paths forward on sustainability across a range of industry sectors, commodities and themes. Some of the key partners of the three-day event included the Ministry of Environment, Forests & Climate Change, Government of India, Ministry of Consumer Affairs, Government of India, ISEAL Alliance, UNICEF, UNDP, C&A Foundation, OECD, GIZ and Alliance for Integrity.

Dr. Bimal Arora, Chairperson, Centre for Responsible Business (CRB) setting the context for the conference said, “Sustainability standards offer the frameworks for businesses to set their sustainability agendas and provide tools to drive sustainable processes within their organization. Business community must play a proactive role and overcome challenges to take leadership roles in supporting these processes. Voluntary Sustainability Standards (VSS) provide these guiding frameworks to businesses and complement government policies. For Standards to be credible, however, multi-stakeholder engagement is required, especially with businesses which are expected to implement these standards. Hence we found it useful to put together this platform to bring together policy makers, businesses, standard setting bodies, civil society and the academia to address challenges and design way forward for standard setting and their implementation in the Indian context.”

Dr. BimalArora, Chairperson, Centre for Responsible Business, 
welcoming the gathering to the 3-day conference

The conference agenda was meticulously designed and structured in three parts to enable active exchange and learning, as well as space for developing roadmaps across themes and sectors. Plenary Sessions of the conference with high profile Indian and international business leaders and policymakers and international speakers set the context on issues around the development and implementation of sustainability standards in India. A series of thematic and sector-specific Roundtables and Workshops were planned over 19th and 20th November and occupied the majority of the conference agenda. These roundtables and workshops were convened by interested international and Indian organizations and standard setters, as conference partners and co-hosts, to focus on specific issues, opportunities, challenges, and needs for the given sector, theme and topic. The final section of the conference returned to plenary and offered an opportunity to share, learn about and engage on the outcomes of the roundtables and workshops and set the agenda for way forward to be followed through in 2016 and beyond, and take stock in a conference annually.

Chief Guest of the Inaugural function, Hon’ble Minister Shri. Kalraj Mishra lauded CRB and Bimal Arora for the pro-active role being played by the organization in defining the contours of the discussions on sustainability standards in India. The Minister further mentioned that he would extend all possible support to the organization in its efforts to scale up business sustainability in India. Guest of Honour, Hon’ble Minister Shri. Suresh P Prabhu said, “When we talk about sustainability, it means different things to different people and the concept of sustainability has a very important social dimension. Standards should be an ambition that eventually can be codified into something that can be applied in the Indian context.”

Perhaps for the first time, sustainability standards have been perceived and deliberated as a journey to achieving sustainability goals, rather than mere compliances. The perception has moved beyond a mere check-box compliance-based approach. The eminent speakers emphasized the importance of sustainability standards in India and highlighted how India is being continuously watched by the World due to its key role in the global supply chain.

Roundtable on Inidan Multinationationals
 and Sustainability, 

Co-hosted by University of Manchester

University of Manchester and CRB co-hosted a dedicated roundtable on Indian Multinationals and Sustainability during the conference and invited presentations by and conversations with Indian Multinationals on their internationalisation strategies and engagement with sustainability standards and collaborative sustainability initiatives in India and globally. The AMBS and Global Development Institute (GDI) at the University of Manchester are jointly leading an ambitious and exciting research project around globalizing firms from emerging economies and their engagement with Voluntary Sustainability Standards (VSS) and Collaborative Sustainability Initiatives (CSI). This research project is part of the UK’s Economic and Social Research Council’s (ESRC) larger research programme, ‘Rising Powers and Integrated Futures’ (see http://www.risingpowers.net). The session convened by Prof Rudolf Sinkovics from the Alliance Manchester Business School (AMBS) and moderated by Prof. Pawan Budhwar from Aston Business School, saw a presentations from senior sustainability managers from companies like Essar, Tata Consultancy Services (TCS), Gas Authority of India Limited (GAIL), Tata Sustainability Group (TSG) and Ambuja Cement.

The Centre for Responsible Business (CRB) provided a historic opportunity: to promote pathways to sustainability in India and globally. Company executives gathered with government officials and civil society leaders along with Indian and international standard setters, policymakers, businesses and civil society organizations, to look at how sustainability standards can be adopted, implemented or adapted to promote better environmental and social practices in India, including in the Micro, Small and Medium Enterprises (MSME) world as part of the global production networks and value chains.

For more information, please visit the conference website here.

A new economic geography of trade and development?

By Rory Horner

In a new article published via Territory, Politics, Governance, Rory Horner reviews emerging evidence of the growth of South-South trade and argues for the need to move beyond win-win notions from development cooperation to highlight the commercial realities and very uneven geographies and development outcomes associated with this new economic landscape. 

The new geography of trade
More than a decade ago, UNCTAD declared that “a new geography of trade is emerging and reshaping the global economic landscape”. In 2012, a milestone was passed with the value of trade between developing countries (South-South trade) overtaking developing country exports to the global North.

Various indicators confirm this shifting geography as demonstrated in the below table. Claims such as those outlined in the UNDP’s The Rise of the South or the increasingly widespread notion of an “Africa Rising” are reflected in the growing share of global GDP generated in the global South. South-South trade is growing significantly, while the geography of demand is also changing – with import demand increasing rapidly within the global South. Notably, these trends are led by the rising power economies of Brazil, India, China and South Africa.

Summary indicators of the shifting geography of income and trade in the world economy:

	Then	2012
South % of global GDP	21.7 (1980)	35.8
Export as % of GDP for Southern countries	16.7 (1981)	29.5
South % of world exports	29.6 (1980)	44.7
South-South % of global trade	11.7 (1995)	25.5
North-North % of global trade	51.2 (1995)	33.9

Source: Horner (2015, 7)

South-South trade raises the exciting prospect of moving beyond the more unequal and hierarchical North-South trade relationship. Specifically, South-South trade has been heralded as “vital for development” (OECD, 2006) and such trade integration viewed as “key to rebalancing the global economy” (UNCTAD, 2011). Much of the excitement in relation to South-South trade draws on “win-win” ideas of horizontal, more equal interaction drawn from the arena of development cooperation. Given that North-South trade has been characterised by high levels of inequality and hierarchy, the implicit suggestion is that South-South may offer at least some better opportunities.

Many of these optimistic viewpoints are somewhat speculative, however. It is questionable whether and how the intended “win-win” notions of South-South development cooperation translate into the commercial realities of South-South trade. The now quite significant body of research on China, and to a lesser extent India, in Africa suggests that while trading relationships may overlap with some of the intended aims of South-South cooperation, the associated impacts are not necessarily win-win. New hierarchies can characterise these relationships, leading to some suggestions of forms of neo-colonialism.

An emerging agenda on South-South value chains and production networks
Research on global value chains (GVCs) and global production networks (GPNs) can move beyond some more macro-scale, geopolitical interpretations to take an actor-centric approach to understand the variegated, region and industry-specific development implications of trade. However, such research has, to date, largely had a North-South orientation, focussing on those firms and farms in the global South participating in chains and networks mostly governed by lead firms from the global North.

Emerging evidence on South-South value chains also highlights two competing possibilities. As summarised in the table below, nascent empirical evidence has charted the potential for easier access to South-South markets in comparison to those of the global North, but also the new competition and unevenness within the South.

Emerging evidence on South-South value chains and production networks:

	Pros: More accessible markets	Cons: Greater competition
Volume/price	Greater volumes	Lower prices, more competitors
Standards	Lower requirements	Lower requirements may be short-lived
Upgrading	Learning and functional upgrading opportunity	Uneven capabilities among firms to benefit
Dependency	Diversification of end-market risk	Potential new dependency

Source: Author’s construction

Governance of, and upgrading within, South-South value chains and production networks are two issues which deserve particular attention. In relation to private governance, new lead firms from the global South are playing increasingly prominent roles in coordinating trade. With firms from outside the global North comprising an increasing share of the world’s largest firms, it is necessary to understand the forms of governance these firms exert, including through private standards requirements. Public governance, a less focussed-on topic within GVC and GPN research, is also crucial to understand in terms of the varying capacity of state policymakers to shape South-South GVCs and GPNs. Upgrading opportunities deserves attention, including in relation to the possibilities arising from different end markets and the associated strategies required. With increasing heterogeneity within the South, the differential possibilities for upgrading, but also the possibilities for downgrading and negative outcomes from South-South trade warrant attention.

In June 2015, I organised an early career conference on this theme of “Global production networks and new contours of development” at the University of Manchester. We had 20 presentations from early career scholars moving beyond the North-South orientation of much research on GVCs and GPNs.

In two ongoing projects, I am now researching more deeply the nature of South-South production networks and their development implications, through an investigation of the economic, social and political relationships that constitute India’s “pharmacy to the developing world”. In South Africa, funded by a British Academy small research grant, I am exploring the various engagements of Indian firms and their local development implications. In East Africa (specifically, Uganda, Kenya and Tanzania and with the support of a Regional Studies Association early career grant), I am investigating the challenges for local pharmaceutical production and its viability vis-à-vis competition from Indian supply. The initial stages of these projects confirm comparatively lower entry barriers in such production networks, and find quite diverse implications for local stakeholders – with key differences, for example, between local industrial and consumer interests. Such outcomes fall in various positions along the spectrum between the two polar extremes of the discourse on South-South relations – as “win-win” development cooperation or neocolonialism.

Ultimately, new research can move beyond the win-win notions often drawn from an earlier era of South-South cooperation to unveil the commercial realities, varied outcomes and very uneven geographies of expanding South-South trade.

This blog post was originally published on Development@Manchester on 10 November 2015.

Rising Power multinationals and global development

Image by jscreationzs, FreeDigitalPhotos.net

By Mo Yamin and Rudolf Sinkovics

Mo Yamin and Rudolf Sinkovics introduce a special issue of critical perspectives on international business, Vol 11, No.3/4 on the developmental impact of Rising Power firms.

Huawei phones, Nando’s chicken, Tata cars – brands from Rising Power countries are present in more and more countries across the globe. The new multinationals that produce these brands are increasingly competing with established Western multinationals, in the Europe and America as well as in Africa and Asia. But what impact do these Rising Power multinationals have on global development? As they expand their global operations, how do they influence the economy, people and the environment? These questions are at the core of a special issue in Critical Perspectives on International Business.

The developmental promises and challenges of Chinese, Indian, or Brazilian companies’ international operations are controversial. One argument in favour of South-South FDI is that firms from emerging economies might adapt more easily to local realities in a developing country than multinationals from the US or Europe. So, do they better understand the needs of low-income consumers, and can they provide these with goods and services that used to be available only for the rich? Or, on the other hand, should we believe media reports on land grabbing and giant infrastructure projects by Chinese or Indian investors that destroy the environment and harm local communities?

Against this debate, the special issue takes a closer look at the nature and strategies of these Rising Power firms. Four articles in the collection look at how capabilities of these firms differ from those of Western multinationals. First, Peter J. Williamson finds that Rising Power firms have distinctive capabilities of innovation and reconfiguration that can give them an edge over competitors. Peter Konijn and Rob van Tulder examine “Resources-for-infrastructure (R4I) Swaps” as a specific market entry strategy of Chinese firms in African countries.  Taking a different angle, Jaya Prakash Pradhan and Keshab Das highlight regional differences within Rising Power countries and their effects on export performance of local SMEs. Further, Rory Horner shows how the emergence of Rising Power firms in the pharmaceutical sector has led established multinationals to increase pressure around intellectual property rights in India and South Africa.

Three further articles examine how the concept of global value chains (GVCs) can help to understand Rising Power firms’ developmental impact. Zaheer Khan, Yong Kyu Lew and Rudolf R. Sinkovics show why Pakistani automobile suppliers have benefited relatively little from their integration into GVCs. Joonkoo Lee and Gary Gereffi  point out that new markets in emerging economies and new regional value chains can be an opportunity for developing country firms to upgrade economically. However, they warn of a risk that this economic upgrading may be accompanied by negative social effects. Finally, contributing to the debate about the social impact of Rising Power firms, Noemi Sinkovics, Rudolf R. Sinkovics, Samia Ferdous Hoque and Laszlo Czaban propose a reconceptualization of social value creation, focusing on the “root causes” of constraints to creating social value.

Overall, the special issue contributes both conceptual thinking and empirical insights to the debate around the developmental impact of Rising Power firms. In sum, the articles show that there is no easy answer to the question of whether these new Chinese, Indian or Brazilian multinationals are good or bad for global development. But one thing is sure: We should keep an eye on them.

For more details, please refer to:

Mo Yamin , Rudolf R. Sinkovics , (2015) "Rising power firms – the developmental promises and challenges: an introduction", critical perspectives on international business, Vol. 11 Iss: 3/4. http://dx.doi.org/10.1108/cpoib-04-2015-0016

Read the full special issue of critical perspectives on international business, Vol 11, No. 3/4.

Bioinformatics in the UK, India and China

By Brian Salter, Yinhua Zhou and Saheli Datta

Bioinformatics has recently been recognised in the UK as a ‘huge priority for government’ with the ‘potential to drive research and development, increase productivity and innovation and ultimately transform lives.’ (UK Medical Research Council, 2014). While there is wide agreement among nations regarding the importance of bioinformatics, there is little consensus over possible pathways for maximising its contribution to the life sciences. A recent paper by Salter, Zhou and Datta (2015) explores the extent to which bioinformatics have become a strategic priority for India, China and the UK, and how these efforts are shaping or are in turn being shaped by the existing norms, rules and institutions in the global lifesciences.

Bioinformatics is the combination of knowledge, skills and techniques of biology made 'readable' with computer science, statistics and mathematics. The traditional view of the role of mathematics and computer science in bioinformatics was that of a 'means' to the end of capturing and understanding increasingly data-intensive biological knowledge production e.g. as with genomic data. However, in the last few years a more balanced view has emerged that considers computer science and mathematical tools as both the object and instrument of knowledge production. Leonelli’s (2012: 2) comment that ‘data-intensive methods are changing what counts as good science’- is perhaps nowhere more relevant today than in bioinformatics where the tug-of-war for primacy between two disparate branches of science (mathematics and biology) has become increasingly polarized.

For nations, in particular emerging economies, these spaces of rapidly advancing technology, uncertainty and political tensions that sit uncomfortably within the hegemonic norms, rules and institutions in the global lifesciences increasingly represent spaces of future growth and opportunities for catching up with the west. For emerging economies, the ensuing shift from ‘developmental state’ into what has been described as the ‘adaptive state’ and the ‘transformative state’ signals the opportunity to shape global lifesciences according to their national interests (Kim, 1999; Salter, 2009a; Wu, 2004; Wong, 2005). For the west, the changing nature of ‘science’ and simultaneously the changing role of emerging economies’ participation in global sciences, questions the established mutually beneficial relationship between ‘state and science’ – where science supplies the state with a flow of knowledge, and the state supplies science with the resources to pursue research interests – the fundamental question being how to accommodate transnational science with national interest?

Yet, it would be mistake to presume that the changing nature of science presents only opportunities and few challenges for emerging economies. From a political perspective, the mutually beneficial state-science relationship at the heart of western domination of global lifesciences since WWII never really developed in India, China or Brazil. Simply put, science in the BRICS lacked political value – until now; thus today, for science to progress the key need is to forge and nurture the ‘science and state’ relationship. Furthermore, while a scientific elite is emerging in the BRICS, their experience in negotiating the key science-state relationship to take the national scientific ambition forward is lacking - although the reverse influx of seasoned diaspora (to the BRICS) from elite western scientific communities is helpful. Similarly, the institutional tools generated by more than sixty years of western domination of global lifesciences is reflected in the hegemonic dynamic of today's global bioinformatics governance and in turn disadvantages new entrants like the BRICS whose establishment of similar institutional strengths is still in its nascent stages. For instance, the Bermuda rules of 1996 enabled the development of bioinformatics self-regulation in western nations, but at the exclusion of China and India.

In the case of China, a top-down style of innovation governance has been adopted with the State Council setting the 'science' agenda with its Five Year Plans. Similarly, India’s Planning Commission’s (recently dissolved) has so far used a similar mechanism of Five Year Plans to set the agenda for the Ministry of Science and Technology (MOST) and the Department of Technology (DIT). In contrast the UK's bottom-up approach with funding from both public and private sources is strengthened by a state apparatus that collaborates closely with a science-led (and scientific elite led) agenda. Neverthless, the Chinese or Indian state's committment to becoming global players cannot be doubted. For instance, between 2005 and 2014, China invested a whopping £303 million in bioinformatics compared to India’s £18 million and UK’s £163.9 million. However, a close study reveals that the bulk of China’s funding of £216 million while earmarked under the broad category of ‘bioinformatics’ was further earmarked under the sub-category ‘New Drug Creation and Development (2009-2010)’ – implying that states differ in their interpretation of what constitutes or differentiates bioinformatics from biomedical innovation.

That western hegemonic domination of global lifesciences has extended into bioinformatics is an accepted fact. However, the extent to which this status quo will be retained given the changing nature of science and the spaces of opportunity it has created for the BRICS to climb ever higher in the global lifesciences value chain, is worth questioning.

This blog post originally appeared on the Global Biopolitics Research Centre blog on 15 July 2015.

Consumer choice, governance and the global stem cell therapy market

Image by dream designs, FreeDigitalPhotos.net

By Brian Salter, Yinyua Zhou and Saheli Datta

Existing modes of regulation in stem cell therapy innovation offer little recognition of the role of health consumer choice in the governance of this emerging global market. Instead, there is a strong, and familiar, emphasis on the roles of scientists, clinicians and bioethicists in determining what regulation should be provided, when and by whom. For the most part it is assumed that health consumers (patients) should be protected from themselves through regulation that renders consumer choice redundant because the apparatus of the state or professions has ensured on their behalf that available treatments are safe and efficacious. Their best interests are served, it is maintained, by their continuing faith in their regulatory guardians. This article argues that such an approach to regulation is outmoded and inefficient because it fails to address the governance needs of motivated, mobile consumers in the global stem cell therapy market. Such consumers require a balance between information that facilitates their ability to make rational choices and the confidence that provider regulation is fit for their purpose.

The dominant orthodox approach to governance works so long as the authority of science, medicine and, to a lesser extent, bioethics is able to control the operation of the health care market by convincing consumers that their choices of treatments should be what science, medicine and bioethics say they should be. The logic of this interpretation of the market is that consumer demand for stem cell therapies should adjust to the available supply generated by the orthodox scientific model of stem cell innovation characterised by the sequence of basic research, clinical experimentation, product development, clinical trials, product approval and clinical application, regardless of the timescale involved. In the case of stem cell therapies, this approach to market governance has clearly failed. The rapid and continuing expansion of a global market of innovative treatments measured in terms of hundreds of clinics treating thousands of patients has occurred independently of the very small stem cell therapy market supplied by the outputs of the orthodox model. Alternative, practice based models of stem cell innovation have developed that respond to consumer demand much more readily than the orthodox model. This poses demand side governance challenges which need to be recognised and addressed.

Much of the expansion in the supply of stem cell therapies has taken place in non-Western countries such as China and India where the assumptions of the orthodox model of stem cell innovation are less comprehensively embodied in regulatory arrangements and there is a greater tolerance of clinician led medical innovation. Whereas in Europe medical innovation supplies therapies for single or small groups of patients in what is presented, in the case of the Hospital Exemption at least, as a non-routine exercise, in non-Western countries this model routinely provides therapies for large populations of patients (see e.g. NutechMediworld, Zhongyuan Union Stem Cell, Celltex and Unique Cell Treatment Clinic). In other words, medical innovation and consumer demand responsiveness are regarded as normal rather than exceptional. In an interesting variant, some companies have combined elements of medical innovation and scientific innovation into a single business model. Here, profits from the stem cell medical innovation treatments for one set of diseases are re-invested in the funding of registered clinical trials for stem cell scientific innovation (orthodox model) with regard to a different set of diseases (e.g. Beike Biotechnology, Chaitanya Stem Cell Therapy Centre).

Health consumer demand for stem cell therapies is not easily diverted by the advice of leading authorities. It is not, as is frequently implied, merely a matter of toning down the hype and consumer demand ‘pull’ generated by the competing optimistic visions of the factions of stem cell science and stem cell clinics; there is also the very considerable demand ‘push’ created by the engagement between a consumer’s health status and the domestically available health care supply. The constraints imposed by a particular disease condition, the proximity of pain and/or death, and the limits of local treatment serve to structure a calculation of risks and benefits with its own internalist rationality. Where patient organisations are well organised, this economic demand for treatment may translate into political demand for changes in the orthodox model and its governance: for example, in the cases of AIDS and neuromuscular disorders. Most recently, in Italy protests from patient groups led the Italian Parliament to introduce legislation in May 2013 to allow experimental stem cell therapies on 32 terminally ill patients to proceed.

The general reticence to engage with the reality of the global market of stem cell therapies serves to perpetuate the present neglect of consumer demand led medical innovation and the forms of governance it requires. It is a reticence that has both supporters and opponents and is unlikely to remain politically unchallenged for long and bioethicists are beginning to acknowledge the issues posed by medical innovation in the stem cell field (5). It is important, also, that the present governance vacuum surrounding practice-based medical innovation is addressed by the medical profession itself through changes in its normal systems of self-regulation and professional guidance. Commenting on the ‘sclerotic’ qualities of the established drug innovation model traditionally sponsored by the US and European Union, Joyce Tait observes of China and India that ‘these increasingly powerful components of the bioeconomy may see a competitive advantage in leading regulatory reform so as to encourage more innovative health care sectors to develop, initially for their large and increasingly wealthy home markets, and perhaps also to encourage change in the United States and European regulatory systems’. Given the market benefits that may accrue from the association of these emerging economies with stem cell medical innovation as documented in this paper, it would be irrational of them to do otherwise.

For more details, please refer to:
Brian Salter, Yinhua Zhou, Saheli Datta (2015). Hegemony in the marketplace of biomedical innovation: Consumer demand and stem cell science. Social Science and Medicine. 131: 156-163.
doi:10.1016/j.socscimed.2015.03.015

Two 'Rising Powers' articles among most downloaded articles in 2014

Two journal articles previously presented on this blog have now been included in an online article collection featuring the most downloaded articles published in Routledge Social Sciences journals in 2014. The collection features the top three most downloaded articles that were published and downloaded in 2014 in each Routledge Social Sciences journal. 

Guarín, A. and P. Knorringa (2014), New Middle-Class Consumers in Rising Powers: Responsible Consumption and Private Standards, Oxford Development Studies, Vol. 42, No. 2, pp. 151-171.

In this article, Alejandro Guarín and Peter Knorringa ask how new middle-class consumers in the Rising Powers will influence ethical consumption patterns and private standards on socially and environmentally responsible production. Read the full blog post here.

Nadvi, K. (2014), “Rising Powers” and Labour and Environmental Standards, Oxford Development Studies, Vol. 42, No. 2, pp.137-150.

In his introductory article to a special issue on "Rising Powers" and Labour and Environmental Standards, Khalid Nadvi outlines what makes the Rising Powers special and in what ways they affect global labour and environmental standards. Read the full blog post here.

Both articles will be freely available on the publisher's website until the 30th June 2015.

The full collection of most read articles can be accessed here: http://bit.ly/social-sciences-most-read 

Making Choices: Health Consumers, Regulation and the Global Stem Cell Therapy Market

Global Medical Discovery highlights a recent article by Brian Salter, Yinhua Zhou and Saheli Datta as a feature article for this month's issue. The excerpt below highlights the article's key findings.

The general reticence to engage with the reality of the global market of stem cell therapies serves to perpetuate the present neglect of consumer demand-led medical innovation and the forms of governance it requires. It is a reticence that has both supporters and opponents and is unlikely to remain politically unchallenged for long, and bioethicists are beginning to acknowledge the issues posed by medical innovation in the stem cell field [14]. It is important, also, that the present governance vacuum surrounding practice-based medical innovation is addressed by the medical profession itself through changes in its normal systems of self-regulation and professional guidance. Commenting on the ‘sclerotic’ qualities of the established drug innovation model traditionally sponsored by the USA and EU, Joyce Tait observes of China and India that ‘these increasingly powerful components of the bioeconomy may see a competitive advantage in leading regulatory reform so as to encourage more innovative health care sectors to develop, initially for their large and increasingly wealthy home markets, and perhaps also to encourage change in the United States and European regulatory systems’ [15]. Given the market benefits that may accrue from the association of these emerging economies with stem cell medical innovation as documented in this paper, it would be irrational of them to do otherwise.

For more details please refer to Global Medical Discovery.

The full article can be found at: Salter, Brian, Yinhua Zhou, and Saheli Datta. (2014). "Making Choices: Health Consumers, Regulation and the Global Stem Cell Therapy Market." BioDrugs: 1-4.  

Creating social value in 'bottom of the pyramid' markets: What can multinationals learn from businesses in rural India?

image by africa/FreeDigitalPhotos.net

By Noemi Sinkovics, Rudolf Sinkovics and Mo Yamin

In a recent article published in International Business Review, 23(4), 692-707, Noemi Sinkovics, Rudolf Sinkovics and Mo Yamin explore the role of social value creation in business model formulation at the bottom of the pyramid and the implications for MNEs.

'Bottom of the pyramid' markets in Rising Powers
Within International Business, Rising Power countries such as China, India, Brazil and Indonesia are not only important as home countries of emerging multinational enterprises (MNEs), but their large populations also present huge markets for MNEs from other countries. However, despite growing middle classes in the Rising Power countries, significant parts of their populations still live on low incomes at the bottom of the economic pyramid. In fact, the majority of people belonging to the 'bottom of the pyramid' (BOP) worldwide can be found in emerging economies. Thus, understanding how BOP markets work can be an important advantage for MNEs to be successful in Rising Power markets.

Creating social value at the bottom of the pyramid
Discussions on MNE strategies in BOP markets often centre around the notion of creating social value, in addition to making profits for the business. Social value creation can be defined as contributing to sustenance, self-esteem and freedom of servitude (Todaro & Smith 2011)1, which ranges from basic necessities such as food and shelter to issues such as dignity and personal freedom to make choices in life.

To better understand the phenomenon of social value creation, this paper looks at how social value is created by entrepreneurs within the bottom of the pyramid, and what MNEs entering BOP markets can learn from these businesses.

Five examples of social value creation: businesses in rural India
For this purpose, we interviewed the owners of five businesses in rural India, who are not only targeting BOP markets but also themselves come from a low-income background. Two of these explicitly created their business to create social value, in order to overcome specific difficulties experienced in the local community: A company selling traditional paintings was founded to stop dependence of local artists on middlemen, who were selling their artwork at high margins. In a more modern sector, an IT entrepreneur founded a rural business process outsourcing firm in response to high unemployment among skilled workers in the area. Three other companies did not explicitly see community benefit as their mission, but nevertheless created social value through their operations in a variety of ways. Two companies producing bangles and incense sticks both have a positive impact on the community by providing education and employment opportunities to people from disadvantaged social groups, such as physically handicapped or slum-dwellers. Similarly another company that grows and processes amla (Indian gooseberry) and grew out of a women's self-help group has not only improved incomes for its members and employees. It has also acted as an example for other entrepreneurs to start similar businesses lifting them out of poverty.

On the whole, these case studies illustrate that social value can be created independently of whether this is a stated objective of the business or not. Further, for those businesses that do explicitly aim to create social value, this tends to be in response to a very specific 'trigger constraint', i.e. a local constraint that entrepreneurs experience and try to overcome.

On top of this, all five businesses show that in order to make a difference for communities, a business model at the bottom of the pyramid needs to be closely linked to specific needs and constraints experienced by members of this community. All business models studied addressed such needs as part of their core business, no matter whether they consciously aimed to create social value or not.

What can MNEs learn from this?
For MNEs, this means that in order to be successful in BOP markets connecting to local communities is key, but also that they will likely find it difficult to do this. In practice, it may be hard for MNEs to establish close links in social networks at the bottom of the pyramid to find out about the needs experienced locally. This puts them at a disadvantage over local companies. Further, long term engagement is important to understand the local situation - again, this is unlikely to happen for many MNEs. MNEs originating from Rising Power countries may nevertheless have an advantage in understanding of BOP markets over Western MNEs, based on cultural or spatial proximity.

The question of how MNEs can know about and respond to the needs of BOP customers is important to find ways of creating social value by responding to local constraints, as practised by businesses originating from the BOP.


For more details, please refer to: Sinkovics,N., Sinkovics,R.R. & M.Yamin (2014) The role of social value creation in business model formulation at the bottom of the pyramid – Implications for MNEs?, International Business Review, 23(4), 692-707.
http://dx.doi.org/10.1016/j.ibusrev.2013.12.004


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1 Todaro, M.P., & Smith, S.C.(2011). Economic development (11th ed.). Harlow: Pearson Education Limited.

Small firms and Corporate Social Responsibility: comparing the social contract in Brazil, China and India

By Peter Knorringa and Khalid Nadvi 

image by David Castillo Dominici/

FreeDigitalPhotos.net

In a recent article published in the Journal of Business Ethics, Peter Knorringa and Khalid Nadvi compare the local institutional context for socially and environmentally sustainable behaviour in small firm clusters in Brazil, China and India. The paper points to a number of open questions around small firms and CSR in the Rising Powers.

Multinational companies have been adopting elaborate Corporate Social Responsibility (CSR) programmes at global level, but often face difficulties in implementing social and environmental standards throughout the supply chain - especially with many small suppliers located in emerging economies. To better understand how and when small firms are likely to improve their social and environmental performance, we propose to pay closer attention to the underlying social contract in these countries, including the formal and informal institutional context for CSR.

Important elements of such a social contract include both the national policy framework of labour and environmental regulation, as well as informal norms on ethical behaviour and traditions of compliance with formal rules that may exist in local industrial clusters. Hence, small firms that are located in industrial clusters in emerging economies and are supplying to multinationals not only face demands for compliance with global CSR standards from their international buyers, but they are also strongly influenced by the local context they operate in.

Nevertheless, we currently know very little about how these local and global forces interact. Do national labour laws and private social standards from MNCs complement each other in pushing for better working conditions in small firms? Are there informal ethical norms in local communities that small entrepreneurs belong to, which facilitate compliance with global CSR standards? Or, on the other hand, will small firms be less likely to comply with global social standards if they operate in a context where national labour laws are weakly enforced?

Comparing the social contracts in Brazil, China and India reveals differences in the local context for CSR, and in the ways in which these interact with global CSR standards:

In India, informal labour is common in small firms, which means that workers are not covered by formal labour laws. In addition, complex layers of subcontracting make it more difficult for international buyers to influence compliance with global CSR standards in suppliers. As a result, small firms in India face little pressure to improve social and environmental performance from the outside, and any willingness of entrepreneurs to engage in more social and environmentally sustainable production for ethical reasons is made more difficult by cut-throat competition in very price-sensitive markets.

In Brazil, on the contrary, there is relatively less informal employment. Labour laws in the formal sector are generally enforced, for example through a system of labour inspectors monitoring and facilitating compliance. Further, there is growing cooperation between the public and private sector around sustainability issues at national level which sets the scene for mutually reinforcing engagement including on global sustainability standards.

China is an intermediate case, where national labour and environmental laws have become stricter over the past decades, but the details of regulations and the effectiveness of enforcement differ across regions. Hence, the local institutional framework may be better positioned to accommodate global CSR demands than in India, but seems less conducive to effective enforcement of social and environmental standards than in Brazil.

Future research on CSR in emerging economy industrial clusters should explore in more detail the interactions between CSR pressures from global buyers and the localised social contract in which small firms operate. This requires paying attention to how public policies and informal norms at national and local level facilitate or hinder compliance with global social and environmental standards. In addition, it will be important to observe how the emergence of increasingly affluent middle classes in emerging economies such as China, India or Brazil influences the demand for social and environmentally sustainable goods in domestic markets. Potentially, such domestic sustainability standards in emerging economies may also begin to shape the formulation of global standards, as these countries increasingly engage in global governance fora.

For more details, please refer to:
Knorrigna, P. and Nadvi, K. (2014) 'Rising Power Clusters and the Challenges of Local and Global Standards', Journal of Business Ethics, September 2014.