The role of design in upgrading within Global Value Chains. Evidence from Italy

The concept of upgrading plays an important role within the global value chain (GVC) theoretical framework (Gereffi et al. 2005). The globalization of supply chains and the presence in the market of low cost producers coming from emergent economies pose serious threats for business that based their competitive advantages on efficiency and manufacturing. Although the literature gathered important results in highlighting the economic impact of upgrading, little research has been done on how design is used as a strategic tool for product innovation within the firm (Ravasi and Lojacono 2005) and how it improves the capability of the firm to upgrade within global value chain. This paper aims at shedding light on the evolution of the role of design in the firm's strategy and value creation. We decide to focus our research on Italian Small and Medium firms (SMEs), with a special interest on those coming from Italian Industrial Districts. The aim of this paper is twofold: a) to study how design is evolving within leading firms and which are the implications of this changes in terms of knowledge creation and sharing, b) to analyse and investigate the relation between design and company's performance. To this end, the authors have assessed the data collected by TeDIS survey, which for over a decade has studied the evolution of Italian small and medium-sized enterprises. The results highlight two particularly significant issues: a) medium-sized companies have a clearer design strategy than in the past and there is a gradual convergence between innovation models based on technology and those based on aesthetics; b) the capacity to invest in a more structured design function enables companies to achieve positive results in terms of both growth and of income generation within global value chains.