Digital Control in Value Chains: Challenges of Connectivity for East African Firms
Open accessAbstract
In recent years, Internet connectivity has greatly improved across the African continent. This article examines the consequences that this shift has had for East African firms that are part of global value chains (GVCs). Prior work yielded contradictory expectations: firms might benefit from connectivity through increased efficiencies and improved access to markets, although they might also be further marginalized through increasing control of lead firms. Drawing on extensive qualitative research in Kenya and Rwanda, including 264 interviews, we examine 3 sectors (tea, tourism, and business process outsourcing) exploring overarching, cross-cutting themes. The findings support more pessimistic expectations: small African producers are only thinly digitally integrated in GVCs. Moreover, shifting modes of value chain governance, supported by lead firms and facilitated by digital information platforms and data standards are leading to new challenges for firms looking to digitally integrate. Nevertheless, we also find examples in these sectors of opportunities where small firms are able to cater to emerging niche customers, and local or regional markets. Overall, the study shows that improving connectivity does not inherently benefit African firms in GVCs without support for complementary capacity and competitive advantages.
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The preference for control without ownership is enabled by increasing digital connectivity, which allows lead firms to influence various units in the GVC without directly managing them.
“The preference for control without ownership is enabled by increasing digital connectivity, which allows lead firms to influence various units in the GVC without directly managing them (Foster, Graham, Mann, Waema, & Friederici, 2018).”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Foster, Graham, Mann, Waema, & Friederici, 2018
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References 85 · Cited by 169
Research works printed but not linked: 5
- Geoffrey Kirkman, P. K. Cornelius, and Jeffrey D. Sachs, 62-74. Oxford: Oxford University Press.
- Foster, C., and Graham, M., 2017. Reconsidering the role of the digital in global production networks. Global Networks 17 (1): 66-88.
- Foster, C., and Graham, M., 2015a. The Internet and tourism in Rwanda (project report). Oxford: Oxford Internet Institute.
- Foster, C., and Graham, M., 2015b. Connectivity and the tea sector in Rwanda (project report). Oxford: Oxford Internet Institute.
- Mann, L., Graham, M., and Friederici, N., 2015. The Internet and Business Process Outsourcing in East Africa (project report). Oxford: Oxford Internet Institute.
- Authors
- Foster, C., Graham, M., Mann, L., Waema, T., & Friederici, N.
- Affiliations
- University of Sheffield (GB)
- University of Oxford (GB)
- London School of Economics and Political Science (GB)
- University of Nairobi (KE)
- Venue
- Economic Geography
- Publisher
- Informa UK Limited
- Published
- 2017-12-18
- Volume
- 94
- Issue
- 1
- Pages
- 68-86
- ISSN
- 0013-0095 (ISSN-L)
- 1944-8287
- OpenAlex
- W2623254040
- Cited by
- 169
- References
- 85
- Citations by year
- 2026: 10 · 2025: 12 · 2024: 20 · 2023: 25 · 2022: 31 · 2021: 48 · 2020: 10 · 2019: 9 · 2018: 3 · 2017: 1
- FWCI
- 12.50
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Economic Geography (publishedVersion, cc-by)
- London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
- White Rose Research Online (University of Leeds, The University of Sheffield, University of York) (acceptedVersion)
- London School of Economics and Political Science Research Online (London School of Economics and Political Science) (submittedVersion)
- London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Research Explorer (The University of Manchester) (submittedVersion, cc-by)
- Funders
- Department for International Development, UK Government (RES-167-25-0701)
- Economic and Social Research Council
- European Research Council (335716)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
- Physical Sciences › Engineering › Media Technology › ICT Impact and Policies
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Keywords
- digital control, global value chains, internet access, digital integration, value chain governance, lead firms, small producers, digital information platform, data standards, tea industry, tourism industry, business process outsourcing, East Africa, Kenya, Rwanda, niche markets
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