Giant Transnational Contractors in East Asia: Emergent Trends in Global Supply Chains

Abstract

There is growing evidence that consolidation in consumer goods industries, with increasingly integrated production and distribution systems between large retailers and contractors, may be increasing the degree of vertical integration in global supply chains. While the growing size and power of large retailers is well recognized, little attention has been paid to a related phenomenon: the growth of giant contractors, based in East Asia, that are producing much of the world's consumer goods. This paper argues that the growth of large contractors may partially address the power asymmetry between ‘big buyers’ and their suppliers, as well as provide an avenue for the latter to move up into higher value-added activities. The emergence of giant factories may also favor labor militancy, both because of the opportunities they afford for coordinated actions among workers, and because work actions can be more disruptive of global supply chains.

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