Presentations and Authors
| Innovation Policy for Firm Upgrading in Buyer-Driven Global Value Chains: A Case Study of the Peruvian Textile Industry |
Miklos Lukacs de Pereny , |
On a recent January edition of “The Economist”, the UK-based influential magazine presented a 14-page special report entitled “The Rise of State Capitalism” to highlight the strengths and weaknesses of this not-so-novel economic model adopted by the large BRIC economies. Announcing the “crisis of Western liberal capitalism” (The Economist, 2012) and the visible hand’s renewed and vigorous role, the report further described and explained how large state-led firms were successfully competing in global markets ranging from low value-added commodities to high-tech industries such as telecommunications and aircraft manufacturing. At the core of the argument, the development of innovation, institutional and organizational capabilities needed to compete in geographically and functionally fragmented global production systems were considered fundamental for emerging economies firms’ competitiveness and long term economic growth. During the last three decades, economic, social and cultural globalization has generated profound changes in international trade and the organization of production activities around the world. The geographical and functional fragmentation of global production systems has forced firms in both developed and emerging economies from different sectors and embedded within context-specific institutional environments to learn how to adapt and respond to these changes. In this regard, in an attempt to better describe, explain and map the entire range of activities involved in the production of goods and services – from raw materials to end consumers -, the Global Value Chain (GVC) theoretical framework has proven useful for guiding policy interventions aimed at fostering firms´ engagement and upgrading within and along these production chains. Although most of the attention has been paid to the economic performance of large BRICs, in particular China, global market changes also present new opportunities and challenges for smaller emerging economies aiming to reduce industrial and technological gaps with the leaders. In this regard, competitiveness strategies and new industrial/innovation policies designed and implemented to shift from primary resource based to higher value-added industries will be crucial to promote and sustain economic growth of smaller market players. Following this introduction and making use of the GVC framework, this paper aims to answer the following questions: (i) How can innovation policy support product, process and functional upgrading in buyer-driven GVCs? and; (ii) How does the institutional environment influence innovation policy design and implementation to achieve these purposes? The paper will be empirically founded on a case study of the Peruvian textile industry for the following reasons: (i) Peru is an emerging economy; (ii) the textile industry (alpaca fibre luxury garments) resembles the low value-added industrial realities of more than two thirds of the world´s countries, and; (iii) the institutional, governance and upgrading mechanisms involved in this geographically and functionally fragmented GVC provide fertile ground for new-industrial/innovation policy rationale and interventions. This paper stands as a building block for a PhD in Management dissertation |
Source: http://www.aaaa.org.cn/im2012/accept_info.php?id=250 |
