The purpose of this paper is to explore how, given the contingent nature of supplier agency, SME subcontractors respond to the power dynamics currently at play in the space global value chain (GVC).
This paper presents a case study of four subcontracting SMEs in south-west France. The region hosts two leading European space systems integrators – Thales Alenia Space and Airbus Defence and Space – along with their suppliers and subcontractors. The area is also home to the headquarters of the French space agency (Centre National d’Études Spatiales) and to a major competitive cluster (Aerospace Valley). Data collection drew on primary sources, including semi-structured interviews and both participant and nonparticipant observations, as well as on secondary sources such as extensive industry literature. The Gioia methodology was employed to structure and categorize the data.
First, the study reveals a power dynamic shaped by four types of power – bargaining, demonstrative, institutional and constitutive. Specifically, it shows that interactions among these types of power generate governance uncertainty. Second, it identifies three distinct strategies – disconnected, hybrid and aligned – that subcontractors implement in response to this uncertainty. In doing so, it highlights both the contingent nature of subcontractors’ agency and their perceptions of French-based MNE contractors’ roles in the power dynamics of the space GVC.
The main contribution of the study is to illuminate the strategic responses of less powerful actors to power dynamics in the GVC. Future research could examine the performance of these strategies and explore knowledge management processes, which this paper does not address. While the generalizability of the findings is limited, they remain transferable to contexts characterized by similar contingencies in suppliers’ agency. Finally, the study opens avenues for further research on power dynamics in the space GVC, particularly with regard to urgent issues such as sustainable orbit management and ensuring safe access to space for all.
The analysis of power dynamics in the space GVC may help practitioners better understand the mechanisms and actors involved. For subcontractors, this paper provides insights into the range of strategies they can adopt, as well as the internal and external resources needed for their effective implementation. It also presents subcontractors’ feedback on the limited effectiveness of geographic return procurement and the persistence of structural knowledge stickiness in the European space industry. Ultimately, the study contributes to ongoing reflections on the strategic refinement of this sector in the “New Space” era.
The paper’s originality lies in its comprehensive analysis of power dynamics from the perspective of subcontractors in an under-researched yet increasingly significant sector for the international business community: the space GVC. Its value stems from revealing a new outcome of power dynamics (governance uncertainty), as well as from providing insights into the factors that both enable (intra-sectoral upgrading) and hinder (structural knowledge stickiness) captive suppliers in implementing strategic responses to these dynamics.
