Technological upgrading in global value chains and clusters and their contribution to sustaining economic growth in low and middle income economies
Raphael Kaplinsky
#2015-027
This paper begins with a discussion of the role played by upgrading in
the promotion of sustainable growth. Upgrading is discussed in two
different contexts, that of industrial clusters and that of global value
chains (GVCs). Drawing on global and African experiences, the paper
addresses the upgrading agenda required to enable dynamic clusters to
meet both domestic needs and progressively also needs in external
markets. In the discussion of value chains, the paper distinguishes
between vertically specialised and additive GVCs and shows how the
upgrading agenda necessarily varies between these two families of GVCs.
The paper concludes by briefly discussing two issues. The first is to
distinguish between the upgrading agenda which is essential for
sustaining economic growth and that which addresses the inclusivity (and
thus sustainability) of the growth path. The second addresses the
circumstances in which it may be possible to pursue these varied
upgrading strategies simultaneously.
JEL Classification: O10, O33, F14, F60
Keywords: Global Value Chains, Industrial Clusters, Upgrading, Africa,
Additive Value Chains, Vertically Specialised Value Chains