Introduction

In the Introduction, we held, modifying Gereffi et al. (2005), that knowledge, both in terms of complexity and codifiability, is the key in the out-sourcing of tasks. Alongside this, of course, is the fact that the costs of production are lower in developing countries for tasks where the capability to carry out those tasks exists. We also identified distributional issues (the distribution of rents within the chain) and business practices (the flexibility of orders), both working within the context of national institutional conditions, including that of the labour market, as other aspects of GVC relations that impact on employment relations. How do these knowledge-based GVC relationships, along with distributional factors, business practices and national institutional factors relate to the quality of employment? That is the question we will take up in this chapter, utilizing the case studies in this book, as well as some supplementary material. The attempt is to generalize from the case studies, particularly in linking governance types with employment systems.

The next two sections discuss the concepts of employment systems and governance types. This is followed by a summarization of the case studies in the book on the basis of governance types and employment systems. Section 20.4 discusses the connection between governance types and employment systems.

Employment systems

The case studies have revealed a number of aspects of employment relations – the security or otherwise of employment; the levels of remuneration, including whether they are around the minimum wage or living wage levels, or somewhat above that; types of incentive payments; and the type of supervision that is carried out, whether that of the strictly hierarchical method or some sort of quality circle (QC) approach.

In making a connection between governance types and employment, we need to go beyond a simple listing of employment practices, such as the security of employment, wages paid, and so on. Rather, we work on the premise that ‘… employment policies, procedures, and institutions … [have] to be conceived of as fitting into systems of interlocking and mutually reinforcing elements. The individual components of such systems cannot be understood in isolation or changed piecemeal’ (Locke et al., 1997, p. xxiii, emphasis in original).