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Global production networks and the changing geography of innovation systems. Implications for developing countries

  • Dieter Ernst

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

Volume (Year): 11 (2002)
Issue (Month): 6 ()
Pages: 497-523

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Handle: RePEc:taf:ecinnt:v:11:y:2002:i:6:p:497-523
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  1. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
  2. 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.
  3. Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
  4. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. 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.
  6. 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.
  7. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  8. Shone,Ronald, 2002. "Economic Dynamics," Cambridge Books, Cambridge University Press, number 9780521017039.
  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.
  10. Best, Michael H, 1999. "Regional Growth Dynamics: A Capabilities Perspective," Contributions to Political Economy, Oxford University Press, vol. 18(0), pages 105-19.
  11. 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.
  12. Anthony Bartzokas & Morris Teubal, 2002. "The Political Economy Of Innovation Policy Implementation In Developing Countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(4-5), pages 271-274.
  13. Pari Patel & Keith Pavitt, 1991. "Large Firms in the Production of the World’s Technology: An Important Case of “Non-Globalisation”," Journal of International Business Studies, Palgrave Macmillan, vol. 22(1), pages 1-21, March.
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