Innovation and Technological Catch-Up

Innovation and Technological Catch-Up

The Changing Geography of Wine Production

Edited by Elisa Giuliani, Andrea Morrison and Roberta Rabellotti

Since the beginning of the 1990s, the supremacy of ‘Old World’ countries (France and Italy) in the international wine market has been challenged by new players, such as Australia, Argentina, Chile and South Africa, which are recording stunning performances in terms both of export volume and value. This book demonstrates that such a spectacular example of catch-up goes beyond simply copying new technologies; it entails creative adaptation and innovation, and introduces a new growth trajectory in which consistent investments in research and science play a key role.

Chapter 6: Recombining to Compete: Public–Private Institutions, Shifting Networks and the Remaking of the Argentine Wine Sector

Gerald A. McDermott and Rafael A. Corredoira

Subjects: economics and finance, economics of innovation, evolutionary economics, regional economics, geography, economic geography, innovation and technology, economics of innovation, urban and regional studies, regional economics


6. Recombining to compete: public– private institutions, shifting networks and the remaking of the Argentine wine sector Gerald A. McDermott and Rafael A. Corredoira 1 INTRODUCTION How can developing countries upgrade their industries to compete in the world? Scholars of international management and economic development have increasingly argued that the attendant ability of local firms to upgrade – combine existing resources in new ways to create new higher-value products – depends in large part on their access to a variety of knowledge resources (Moran and Ghoshal, 1999; Giuliani et al., 2005). But it is less clear what types of institutional infrastructure facilitate such access. A growing current in the innovation literature argues that access to knowledge often depends on whether firms are embedded in rich inter-firm networks, which enable them to build collaborative relationships, gain resources, learn and coordinate experiments (Powell et al., 1996). However, scholars also note how firm practices, social structures and institutions are slow to change and can constrain one’s access to new knowledge resources (Uzzi, 1996). This enabling and constraining nature of embeddedness resonates strongly in emerging market countries (Spicer et al., 2000), and especially in Latin America, where societies are often noted for their weak institutions and social capital (Schneider, 2004). Unfortunately much of the research on development has misinterpreted this dual nature of embeddedness as a function of a society’s immutable stock or endowment of social capital and ‘right’ institutions. For instance, researchers tend to argue that firms fail to learn and adapt because they are...

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