Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?

The role of emerging economies in the global economy via embeddedness in Global Value Chains (GVCs) is increasing, but their ability to become innovation leaders is less certain. The GVC approach stresses that the inter-firm linkages afforded by being part of a chain are crucial for transferring knowledge. However, their impact on the innovation performance of the developing country firms involved in these GVCs remains controversial and requires more research. The present study provides a systematic review of the literature on developing country GVCs to investigate the learning channels used by local firms, both within (firm level, collective level) and outside of these value chains (i.e. external sources of learning), and the extent to which this activity promotes innovation. We use cluster analysis to classify the cases identified in a literature review to propose a novel typology of local GVC innovators: (a) GVC-led Innovators that achieve high levels of innovation, relying mainly on sources of knowledge within the GVC; (b) Autonomous Innovators whose innovation activity is based on external sources of learning; (c) Marginal Innovators, which constitute the largest group and are characterized by low levels of innovativeness and some use of knowledge available within the GVCs, but scarce use of external sources.