Local innovation and global value chains in developing countries
Valentina De Marchi, Elisa Giuliani & Roberta Rabellotti
#2015-022
The GVC approach has stressed that inter-firm linkages within GVCs can
play a crucial role in transferring technological knowledge and
promoting innovation. However, the exact nature of these GVC inter-firms
relationships, and their impact on the learning and innovative processes
of firms involved in such GVCs in developing countries is still
controversial and rather understudied. In this paper we argue that to
investigate whether and how firms involved in GVCs (as well as
industrial clusters, regions and countries) innovate, scholars should
not focus entirely on GVC characteristics and the role of lead firms,
but they also should take into account domestic technological
capabilities at the firm, industrial cluster/regional and local
innovation system-levels. In this study we undertake a systematic review
of the literature on GVCs in developing countries to investigate if and
how innovation has been undertaken at the local level. With cluster
analysis, we have identified three types of GVCs, defined as (a) GVC-led
Innovators, consisting of innovative local firms, which intensively use
knowledge sources from within the GVC; (b) Independent Innovators also
consisting of innovative firms, but whose learning sources mainly come
from outside the GVC; c) Weak Innovators, including a large group of
scarcely innovative firms, drawing selectively on some of the knowledge
sources available within the GVC but poorly using other forms of
learning.
Key words: Local Innovation, Upgrading, Global Value Chains, Developing Countries
JEL Classification: O14, O19, O33, O38