The Value Chain Configuration in the Digital Entrepreneurship Age: The Paradoxical Role of Digital Technologies

Abstract

This chapter analyzes the configuration of global value chains in the digital entrepreneurship age by clarifying past contributions, examining work resulting from the Covid-19 pandemic, and outlining suggestions for future research. First, we provide a conceptual framework to understand how digitalization has driven its transformation. Specifically, we discuss the main changes in the slicing of value chain activities, the control and location decisions of these activities, and the paradoxical role played by digital technologies in shaping the way entrepreneurs organize them. In doing this, we highlight the location paradox, which rests on the idea that digital technologies help firms expand their geographical scope and reduce co-ordination costs in large and dispersed networks (which favors offshoring), while reducing the importance of the location of activities and shortening supply chains (which favors reshoring). Second, we critically review the research on value chain configurations that has appeared because of the Covid-19 pandemic. Lastly, we discuss some promising areas of research that could yield insights that will advance our understanding of value chain configurations in the digital entrepreneurship age.