3.1 Changing demands and prerequisites for inter-firm trade

Increasingly, new competition has involved action within new forms of inter-firm organisation. A particularly significant development is the proliferation of innovative vertical supply chain organisations whereby lead firms, usually larger enterprises, use information technologies to organise their sourcing requirements through tightly linked networks of suppliers and sub-contractors, in many cases on a global scale. Such developments offer small enterprises new market opportunities, and with globalisation, in parts of the world previously poorly connected up to global markets.

Lead firms are expecting new levels of capability from their suppliers. Especially in areas, such as product quality, level of service, productivity, adaptability, and reliability - in many cases delivering just-in-time. Thus, small enterprises unable to achieve the new standards are likely to be cut out of the chains, whereas those that can achieve higher capabilities may experience good opportunities for growth. Even small enterprises not selling on final markets through the mediation of supply chains are finding that increased globalisation is forcing the same competitive requirements upon them, and the same pressures to upgrade their capabilities.

In responding to the need to meet the new competitive requirements qualitative aspects of employment could have important bearings. This may be the case both inside the enterprise or place of work, and in the broader community of which the enterprise is a part. Thus, strategies to address issues of enterprise competitiveness and qualitative conditions of work need to address both contexts. Already, there are signs of a growing awareness of the importance of qualitative factors for meeting new competitive needs, both inside the enterprise and inside the community.