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Local Heroes, Global Impact: The Unsung Power of Micro and Small Enterprises in Global Value Chain Reconfiguration

Project description

The big role of small enterprises in reshaping global value chains

Geopolitical and economic changes are prompting companies to relocate operations closer to home, reshaping global value chains (GVCs). The role of micro and small enterprises (MSEs) in this shift is often overlooked, despite their potential to repatriate activities and support local subcontracting networks. The ERC-funded SOS-GVC project will introduce a framework to assess how MSEs influence GVC structures and their territorial implications. These dynamics can strengthen regions with MSEs, boosting their resilience to economic shocks. Using unique georeferenced data (2010-2022), the project will assess the interplay between MSEs, GVCs, and regional resilience, offering guidance to policymakers and stakeholders in a shifting global economy.

Objective

Recent geopolitical and economic shocks have led to a profound transformation in global production processes. In response, many companies are restructuring their operations by relocating business activities closer to or within their home countries. This shift is altering the dynamics of Global Value Chains (GVCs), intricate networks that are central to producing a variety of goods. While scholarly attention focuses on large multinational firms, the role of Micro and Small Enterprises (MSEs) in GVC reconfiguration remains an unexplored frontier. SOS-GVC aims to introduce a pioneering theoretical and empirical framework to assess the role of MSEs in reshaping GVCs structure, with a focus on the territorial implications of their strategies. The project will provide evidence of the various ways MSEs can influence global production processes. Firstly, MSEs directly involved in GVCs can repatriate offshored activities, generating impacts in the domestic regions where they are located. Secondly, MSEs indirectly participating in GVCs can safeguard local subcontracting networks by implementing risk prevention strategies to reduce the likelihood of disruptive events. The combined effect of these actions can empower the territories where MSEs operate, enhancing their ability to react to shocks. To construct the empirical framework, I will employ distinctive georeferenced firm-level data obtained from the Italian Ministry of Economy and Finance Annual Survey covering the 2010-2022 period. This database, untapped by the academic community, provides a unique advantage. The project has significant societal implications. As deglobalization trends persist, the crucial role of MSEs in GVCs is expected to grow, along with the regional impact of their activities. The societal impact lies in fostering a nuanced understanding of the intricate interplay between MSEs, GVC, and regional resilience, informing policymakers and stakeholders in navigating the evolving global economic landscape.

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Programme(s)

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Topic(s)

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Funding Scheme

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HORIZON-ERC - HORIZON ERC Grants

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Call for proposal

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(opens in new window) ERC-2024-COG

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Host institution

UNIVERSITA DEGLI STUDI DI PARMA
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 1 248 100,00
Address
VIA UNIVERSITA 12
43121 PARMA
Italy

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Region
Nord-Est Emilia-Romagna Parma
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 1 248 100,00

Beneficiaries (1)

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