Globalisation of production and innovation: how outsourcing is reshaping an advanced manufacturing area
AbstractPervasive outsourcing is transforming business models and productive relations in advanced manufacturing areas. In particular, the international dimension of outsourcing, off-shoring, has been attracting great attention, as it leads to the emergence of global value chains and internationally distributed innovation processes, affecting the position of regions and countries in the international division of labour. The present paper investigates the diversified patterns of outsourcing and off-shoring across industries which have been characterising the recent dynamics of Lombardy, the Italian leading economic region. Based on a large firm-level survey, the work investigates extent, depth, regional embeddedness and degree of internationalisation of outsourcing processes, differentiating between stages of production, research and service activities. The evidence suggests that fragmentation is remarkably wide and interests all the industrial sectors to a similar extent. However, outsourcing has a clear regional dimension, concerning services at most, and taking the form of extended producer-driven chains, highly embedded in the regional system. Regionally confined fragmentation is driven by final producers of relatively small size, which nevertheless exhibit high skill intensity. Off-shoring is still, on the other hand, a limited phenomenon, encompassing only a minor fraction of the process of deverticalisation. The evidence depicts off-shoring as part of a wider process of internationalisation by mostly large firms or group subsidiaries at intermediate stages of the value chain, which increasingly rely on international intra-industry trade. The international outsourcing trend appears to be strongly driven by export-oriented firms, whereas foreign direct investment per se seems to play a minor role.
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Bibliographic InfoPaper provided by KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy in its series KITeS Working Papers with number 194.
Length: pages 30
Date of creation: Dec 2006
Date of revision: Dec 2006
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Other versions of this item:
- Lucia Cusmano & Maria Luisa Mancusi & Andrea Morrison, 2010. "Globalization of Production and Innovation: How Outsourcing is Reshaping an Advanced Manufacturing Area," Regional Studies, Taylor and Francis Journals, vol. 44(3), pages 235-252.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-10 (All new papers)
- NEP-BEC-2007-03-10 (Business Economics)
- NEP-CSE-2007-03-10 (Economics of Strategic Management)
- NEP-EEC-2007-03-10 (European Economics)
- NEP-INO-2007-03-10 (Innovation)
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