Leveraging Global Value Chains to Bridge the Gap between Rural and Global Economies: Case of North Carolina’s Appalachian Automotive Industry

Shruti Rao


Globalization has intensified challenges for rural regions. As countries have become increasingly aware of the need to increase innovation, resources are being allocated towards making cities and technology-intensive industries more competitive. While urban areas focus on knowledge and technology intensive areas, rural regions face distinct challenges in the push for greater economic prosperity. This article examines how the Global Value Chain (GVC) framework can be a key asset to policy makers interested in rural development by providing guidance on how to connect rural regions to globalized industries. GVC analysis has grown in popularity as a framework to facilitate economic prosperity, but has not yet been rigorously applied towards specific rural regions, only rural countries. This paper demonstrates the potential for the GVC framework to help rural areas leverage their strengths to become players in the global economy. The application of the GVC framework is focused on North Carolina’s automotive industry, in which researchers studied employment and wage data, educational infrastructure, key firms, and broader industry trends. The results of the GVC analysis led to several recommendations for North Carolina to increase its global competitiveness in the automotive sector by continuing to strengthen the community college system, invest in light-weight technologies and capture more of the value in high-tech parts manufacturing. The implications of the case study in Appalachia reveal the strengths of the GVC framework to applications in rural regions and communities. The holistic nature of the framework allows for the successful use of the GVC framework to both understand the advantages of a rural region and identify key strategies that will allow the region to generate value in globalized industries. By using Appalachia’s trucking industry as a case study, the findings of this study lay a foundation for the future application of GVC analysis to be used by rural regions seeking greater participation in globalized industries.

Keywords: global value chains (GVCs), Appalachia, economic development, automotive industry, manufacturing

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The Journal of Rural and Community Development is supported by SSHRC.