Deepening or delinking? Innovative capacity and global value chain participation in the ICT sectors

Rasmus Lema, Carlo Pietrobelli, Roberta Rabellotti & Antonio Vezzani


Innovation trajectories in global value chains can take highly differentiated pathways. Firms and other organisations operating in a sector in a given country may gain or lose innovative capacity over time compared to their peers in other countries. In this paper we address the question: do stylised trajectories emerge from the analysis of countries' relative innovative capacity and global value chain participation? We draw explorative insights from a cluster analysis of 45 countries on the subsectors of the information and communication technology industry: hardware and software. Our analysis uncovers remarkable differences across sectors and countries. We identify different trajectories and discuss the sub-sectoral specificities which contribute to explaining these differences. The association between the strengthening of innovative capacity and deeper insertion in global value chains applies to only a handful of countries and only in the software subsector. These findings raise questions for future research on innovation in global value chains.

Keywords: Global value chains, Innovation capacity, Innovation trajectories, Hardware, Software, ICT

JEL Classification: F23, D23, L22, L25, O10, O32, O38

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