Rising Power Clusters and the Challenges of Local and Global Standards

Abstract

This paper explores the intersection between three processes associated with globalisation. First, the rise of emerging economies like China, Brazil and India, the so-called ‘Rising Powers’, and their potential to define the contours of globalisation, global production arrangements and global governance in the twenty-first century. Second, the importance of corporate social responsibility (CSR) goals in the shaping of global trade rules and industrial practices. Third, the significance of small firm clusters as critical sites of industrial competitiveness. Some of the most significant examples of successful, innovative and internationally competitive small firm clusters from the developing world are located in the ‘Rising Powers’ and cluster promotion is a core element of national industrial policy in some of these countries. There is also evidence of engagement by clustered actors with corporate social responsibility goals around labour and environmental impacts. While these three processes have been separately studied there has been no attempt to explore their intersections. This paper addresses this gap through a comparative analysis of secondary data, and a detailed reading of the literature, on CSR and clusters in Brazil, China and India. It assesses the evidence on small firm clusters in the Rising Power economies and considers how these Rising Power clusters engage with CSR goals pertaining to labour, social and environmental standards. It argues for a greater focus on the formal and informal institutional context, termed the ‘social contract’, in explaining divergent experiences and practices observed across these countries. This raises important questions for future academic and policy research on clusters, CSR and the Rising Powers. The paper concludes by outlining a research agenda to explore the local and global consequences of the relationship between Rising Power clusters and international labour and environmental standards.