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Global Production Networks And The Changing Geography Of Innovation Systems. Implications For Developing Countries

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DIETER ERNST

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Abstract

The paper addresses disruptive changes that globalization imposes on the geography of innovation systems, and identifies potential benefits that developing countries could reap from international linkages. The analysis is centered on three propositions. First, developing countries need to blend diverse international and domestic sources of knowledge to compensate for initially weak national production and innovation systems. Second, a greater variety of international knowledge linkages is possible, as globalization reduces the spatial stickiness of innovation. Third, globalization has culminated in an important organizational innovation: the spread of global production networks (GPN) combines concentrated dispersion with systemic integration, creating new opportunities for international knowledge diffusion. We argue that GPN provide firms and industrial districts in developing countries with new opportunities for reverse knowledge outsourcing. We explore resultant challenges that define the need for public policy response, define the new agenda for industrial upgrading, and discuss what types of policies and support institutions may help to reap the benefits from network participation.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 11 (2002)
Issue (Month): 6 (January)
Pages: 497-523
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Handle: RePEc:taf:ecinnt:v:11:y:2002:i:6:p:497-523

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Related research
Keywords: Globalization; Development And Diffusion Of Technology; Growth Of The Firm And Networks; Innovation And Knowledge; Industrial Dynamics;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dieter Ernst, 2003. "The New Mobility of Knowledge: Digital Information Systems and Global Flagship Networks," Economics Study Area Working Papers 56, East-West Center, Economics Study Area. [Downloadable!]
    Other versions:
  2. Dieter Ernst, 1997. "Partners For The China Circle? The Asian Production Networks Of Japanese Electronics Firms," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series 1094, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley. [Downloadable!]
    Other versions:
  3. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
  4. Scott, Allen J., 1995. "The Geographic Foundations of Industrial Performance," Mathematical Social Sciences, Elsevier, vol. 30(3), pages 319-320, December. [Downloadable!] (restricted)
  5. Dieter Ernst, 1997. "High-Tech Competition Puzzles. How Globalization Affects Firm Behavior and Market Structure in the Electronics Industry," DRUID Working Papers 97-9, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  6. Dieter Ernst, 2000. "Catching-Up and Post-Crisis Industrial Upgrading: Searching for New Sources of Growth in Korea's Electronics Industry," Economics Study Area Working Papers 02, East-West Center, Economics Study Area. [Downloadable!]
  7. Dieter Ernst & Bengt-Ake Lundvall, 2000. "Information Technology in the Learning Economy: Challenges for Developing Countries," Economics Study Area Working Papers 08, East-West Center, Economics Study Area. [Downloadable!]
    Other versions:
  8. Best, Michael H, 1999. "Regional Growth Dynamics: A Capabilities Perspective," Contributions to Political Economy, Oxford University Press, vol. 18(0), pages 105-19.
  9. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January. [Downloadable!] (restricted)
  10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  11. Dieter Ernst, 2001. "Global Production Networks and Industrial Upgrading - A Knowledge-Centered Approach," Economics Study Area Working Papers 25, East-West Center, Economics Study Area. [Downloadable!]
  12. Dieter Ernst, 2000. "Placing the Networks on the Web: Challenges and Opportunities for Managing in Developing Asia," Economics Study Area Working Papers 05, East-West Center, Economics Study Area. [Downloadable!]
  13. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
    Other versions:
  14. Dieter Ernst, 2000. "The Economics of Electronics Industry: Competitive Dynamics and Industrial Organization," Economics Study Area Working Papers 07, East-West Center, Economics Study Area. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dieter Ernst, 2004. "Searching for a New Role in East Asian Regionlization: Japanese Production Networks in the Electronics Industry," Economics Study Area Working Papers 68, East-West Center, Economics Study Area. [Downloadable!]
  2. Boy Luethje, 2004. "Global Production Networks and Industrial Upgrading in China: The Case in Electronics Contract Manufacturing," Economics Study Area Working Papers 74, East-West Center, Economics Study Area. [Downloadable!]
  3. Dieter Ernst, 2001. "The Evolution of a "Digital Economy": Research Issues and Policy Challanges," Economics Study Area Working Papers 28, East-West Center, Economics Study Area. [Downloadable!]
  4. Rakesh Basant, 2003. "U.S.-India Technology Cooperation and Capability Building: The Role of Inter-Firm Alliances in Knowledge-Based Industries," Economics Study Area Working Papers 53, East-West Center, Economics Study Area. [Downloadable!]
  5. Dieter Ernst, 2001. "The Internet's Effects on Global Production Networks: Challenges and Opportunities for Managing in Developing Asia," Economics Study Area Working Papers 33, East-West Center, Economics Study Area. [Downloadable!]
  6. Ernst, Dieter & East-West Center (ed.), 2006. "Innovation Offshoring:Asia's Emerging Role in Global Innovation Networks," Economics Study Area Special Reports, East-West Center, Economics Study Area, volume 10, number ewcsreport1, March. [Downloadable!]
  7. Rakesh Basant, 2002. "Knowledge Flows and Industrial Clusters: An Analytical Review of Literature," Economics Study Area Working Papers 40, East-West Center, Economics Study Area. [Downloadable!]
  8. Basant Rakesh, 2003. "US-India Technology Co-operation and Capability Building: The Role of Inter-firm Alliances in Knowledge Based Industries," IIMA Working Papers 2003-02-01, Indian Institute of Management Ahmedabad, Research and Publication Department. [Downloadable!]
  9. Terutomo Ozawa, 2001. "The "Hidden" Side of the "Flying-Geese" Model of Catch-Up Growth: Japan's Dirigiste Institutional Setup and a Deepening Financial Morass," Economics Study Area Working Papers 20, East-West Center, Economics Study Area. [Downloadable!]
  10. Javier Revilla Diez & Matthias Kiese, 2006. "Scaling Innovation in South East Asia: Empirical Evidence from Singapore, Penang (Malaysia) and Bangkok," Regional Studies, Taylor and Francis Journals, vol. 40(9), pages 1005-1023, December. [Downloadable!] (restricted)
  11. Metcalfe, Stan & Ramlogan, Ronnie, 2005. "Innovation Systems and the Competitive Progress in Developing Economies," Centre on Regulation and Competition (CRC) Working papers 30672, University of Manchester, Institute for Development Policy and Management (IDPM). [Downloadable!]
    Other versions:
  12. Lazonick, William, 2006. "Corporate Governance, Innovative Enterprise, and Economic Development," Working Papers RP2006/71, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  13. Dieter Ernst, 2001. "The New Mobility of Knowledge: Digital Information Systems and Global Flagship Networks," Economics Study Area Working Papers 30, East-West Center, Economics Study Area. [Downloadable!]
    Other versions:
  14. Sanjaya Lall and Manuel Albaladejo (QEH), . "China’s Competitive Performance: A Threat To East Asian Manufactured Exports?," QEH Working Papers qehwps110, Queen Elizabeth House, University of Oxford. [Downloadable!]
    Other versions:
  15. Henderson, Jeffrey, 2002. "Globalisation on the Ground: Global Production Networks, Competition, Regulation and Economic Development," Centre on Regulation and Competition (CRC) Working papers 30605, University of Manchester, Institute for Development Policy and Management (IDPM). [Downloadable!]
  16. Basant Rakesh, 2002. "Knowledge Flows and IndustrialClusters: An Analytical Review of Literature," IIMA Working Papers 2002-02-01, Indian Institute of Management Ahmedabad, Research and Publication Department. [Downloadable!]
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