Handbook on Global Value Chains
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Handbook on Global Value Chains

Edited by Stefano Ponte, Gary Gereffi and Gale Raj-Reichert

Global value chains (GVCs) are a key feature of the global economy in the 21st century. They show how international investment and trade create cross-border production networks that link countries, firms and workers around the globe. This Handbook describes how GVCs arise and vary across industries and countries, and how they have evolved over time in response to economic and political forces. With chapters written by leading interdisciplinary scholars, the Handbook unpacks the key concepts of GVC governance and upgrading, and explores policy implications for advanced and developing economies alike.
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Chapter 23: Innovation in global value chains

Rasmus Lema, Carlo Pietrobelli and Roberta Rabellotti

Abstract

In this chapter, the authors focus on innovation in global value chains and on the role that such chains play in building and deepening capability. They also focus on the trajectories along which firms, located in developing countries, once inserted into global value chains acquire or lose innovation capability. To do so, they bring together the global value chains and innovation systems approaches. Their key arguments are that global value chains interact with innovation systems in multiple ways and that these interactions have important implications for the speed, depth and overall quality of capability building in developing-country firms. They outline five innovation capability trajectories and show how capability building at the firm level interrelates with the various ways in which global value chains and innovation systems co-evolve.

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