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Global Production Networks and the Changing Geography of Innovation Systems: Implications for Developing Countries

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  • Dieter Ernst

    () (Economics Study Area, East-West Center)

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 nee 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 are possible, as globalization reduces the spatial stickiness of innovation: the spread of global production networks (GPN) combines concentrated dispersion with systemic integration, creating new opportunities for international 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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Bibliographic Info

Paper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 09.

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Length: 34 pages
Date of creation: Nov 2000
Date of revision:
Handle: RePEc:ewc:wpaper:wp09

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References

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  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.
  2. Scott, Allen J., 1995. "The Geographic Foundations of Industrial Performance," Mathematical Social Sciences, Elsevier, vol. 30(3), pages 319-320, December.
  3. Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
  4. 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.
  5. Best, Michael H, 1999. "Regional Growth Dynamics: A Capabilities Perspective," Contributions to Political Economy, Oxford University Press, vol. 18(0), pages 105-19.
  6. Shone,Ronald, 2002. "Economic Dynamics," Cambridge Books, Cambridge University Press, number 9780521017039.
  7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  8. Dieter Ernst, 2000. "Inter-Organizational Knowledge Outsourcing: What Permits Small Taiwanese Firms to Compete in the Computer Industry?," Economics Study Area Working Papers 01, East-West Center, Economics Study Area.
  9. Dieter Ernst, 1997. "Partners for the China Circle? The Asian Production Networks of Japanese Electronics Firms," DRUID Working Papers 97-3, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  10. 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.
  11. Dieter Ernst & Bengt-Åke Lundvall, 1997. "Information Technology in The Learning Economy -Challenges for Developing Countries," DRUID Working Papers 97-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. Anthony Bartzokas & Morris Teubal, 2002. "The Political Economy Of Innovation Policy Implementation In Developing Countries," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 11(4-5), pages 271-274.
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