Circular Economy and Social Upgrading in Global Value Chains: An Analytical Perspective on Social Upgrading in the Global South

This chapter presents a novel analytical framework that explores the potential role of Circular Economy (CE) strategies in promoting social upgrading within global value chains (GVCs), primarily situated in the global South. The framework is grounded in the affordance perspective, which recognizes that the adoption of the CE paradigm does not guarantee improvements in the working environments of participating firms. This is because the CE often prioritizes environmental goals and may overlook social considerations in its strategies focused on industry and products. The framework emphasizes the need to bridge the gap between CE and GVC domains to enhance working conditions in participating firms. The framework integrates the affordances of the CE model, based on the 9R CE strategies, with the five key themes for decent work identified by the International Labour Organization, while considering the influence of institutional enablers and barriers. To support its propositions, the study includes several examples. This research contributes to the literature on CE and GVCs by providing a fresh perspective on the intersection between the CE and social upgrading within GVCs. It highlights the challenges in realizing social improvements when the CE paradigm primarily focuses on environmental goals. Additionally, the study sheds light on the influence of the institutional context on delivering social upgrading in CE implementation.