In this thesis we have analysed the global value chain structures of the leather footwear industries in Ethiopia and Vietnam, in order to find out how a suitable set of industrial policies to promote a sustainable development in the respective industries can be constructed. The GVC analysis, was based on theories of GVC governance and GVC upgrading, arguing that the structure of the former shape the possible opportunities and challenges for an industry’s participation in GVCs. By including the theoretical perspective of industrial policy strategies, we discussed the role of governments in promoting a sustainable participation in GVCs. The GVC analysis concluded that Ethiopia and Vietnam are engaged in two separately distinctive GVCs, based on end-markets, market segments, export channels and other varying configurations based on quality conventions. The Ethiopian industry is yet in an early stage and currently lack market/industrial-conventions to create conditions for economic development. However, Ethiopia has the potential of building a diversified and flexible industry with low scale production and exports to the higher quality segments of the European end-markets with first hand access to high quality raw materials and supporting industries, and in this way occupy a position of high added value along the GVC. Vietnam, on the other hand, is engaged in large scale and highly specialised production focused on final assembly production with the access to low cost labour as premier competitive advantage. While Vietnam does have significant potential to secure a sustainable position in the global footwear industry, Vietnam need to find a strategy to escape getting stuck in the middle income trap, where their domestic firms solely participate in low skilled final assembly production contracted by foreign firms, with a relatively low share of value added. In conclusion, there are important structures within the GVCs, in which Ethiopia’s and Vietnam’s footwear firms are engaged, that needs to be considered in their respective upgrading strategies.
|Educations||MSc in International Business and Politics, (Graduate Programme) Final Thesis|
|Number of pages||135|