Matching global service standards—the role of intermediaries in economic upgrading of support-service firms in global production networks

Abstract

Economic upgrading of local firms in developing countries is a central theme in research on global value chains/production networks. Within this literature, few studies have concentrated on upgrading in non-tradable services. Even when serving international business clients these tend to be understood as locally rendered, peripheral activities that offer limited upgrading opportunities. Using the facilities management sector in Mumbai as a case in point, this article argues that such a view overlooks how: (1) more sophisticated demands from advanced international business service firms lead to enhanced standards and economic upgrading in low-end, non-tradable services, and (2) the emergence of global support-service providers acting as intermediaries in global production networks (GPNs) has contributed to enhanced operational standards in low-end support services. At the conceptual level, this article aims to elucidate the capital and labor dimensions of economic upgrading. This allows for a better understanding of the variations in economic upgrading across sectors and the ripple effects of economic upgrading in places where GPNs are grounded.