Competitiveness and Technological Upgrading in Global Value Chains: Evidence from the Indonesian Electronics and Garment Sectors

Indonesia is a rapidly growing and internationally competitive economy that is well integrated into globalized production systems. The global value chain (GVC) model has proven to be a popular analytical framework to explain how global lead firms structure and organize global production through dispersed global suppliers. Indonesia's leading export sectors, garments and electronics, are well integrated into GVCs. Engagement in GVCs, often led by leading global brands, is seen as a basis for local producers to become globally competitive and to grow. It also comes with challenges—local producers must meet the demanding pressures from lead firms on prices, on-time delivery, product quality, and social, environmental and labour standards. The possibilities for local producers to learn, acquire new capabilities and upgrade to enhance their competitiveness are often conditioned by the nature of ties that they have with their global lead firms. Yet, this paper argues, the GVC model fails to recognize agency on the part of local firms in this learning process. Moreover, particular forms of governance arrangements within GVC ties can restrict the prospects for local producers to enhance capabilities and upgrade. Drawing on selected case study evidence from the Indonesian garments and electronics sectors, the paper explores the relationship between distinct types of GVC engagements and firm-level learning and upgrading, and considers how some GVC ties may restrict upgrading.     

Twenty‐first Century Industrial Policy in a Small Developing Country: The Challenges of Reviving Manufacturing in Rwanda

The Rwandan government — widely lauded for its political commitment to development — has refocused its efforts on reviving growth in the manufacturing sector. This article examines how pressures from different levels — international, regional and domestic — have shaped the evolving political economy of two priority sectors (apparel and cement). To achieve its goals of manufacturing sector growth, the Rwandan government aims to access foreign markets (on preferential terms) and larger regional markets while developing effective state–business relationships with locally based firms. Despite the government's political commitment to reviving its manufacturing sector, its strategy has been both shaped and impeded by shifting pressures at the international level (through Rwanda's recent suspension from the African Growth and Opportunity Act), the regional level (through competition from regional firms) and the domestic level (through over‐reliance on single firms). Within the current industrial policy literature, there is limited reflection on how developing countries are dealing with the multi‐scalar challenges of enacting industrial policy in a much‐changed global trading environment. This article contributes to the industrial policy literature by addressing this lacuna.     

Three worlds of global value chains: multiple governance and upgrading paths in the Korean animation industry

Cultural production is increasingly fragmented and dispersed organizationally and geographically as a result of growing offshore outsourcing within and across firms, giving rise to global value chains (GVCs). Yet, a GVC perspective has been applied limitedly to the study of cultural industries without serious consideration of inter-firm governance structure and its consequences on upgrading. Building upon the GVC literature on multiple governance structure, this paper examines three GVCs in Korea with distinctive governance forms: U.S. outsourcing chains, Japanese outsourcing chains, and international coproduction chains. The two outsourcing chains exhibited marked differences in various governance dimensions with distinctive upgrading patterns. International coproduction chains emerged as an alternative pathway of upgrading after the rapid decline of outsourcing exports, posing unique opportunities and challenges to firms and policy-makers. The findings are discussed in the context of multiple governance structure in GVCs and its implications to upgrading in networked global cultural production.     

权力集中化、生产片断化与全球价值链下本土产业的升级

全球领先企业的权力集中化和生产的片断化导致价值分配的非均衡,并进一步加剧了全球生产网络中权力结构的不对称。本文提出全球价值链上的权力是一种建立在战略资源基础上的不对称的话语权,并归纳了八种基本的市场权力形式。通过对全球十大工业制成品及服务业的市场份额分析,发现技术能力和品牌能力是全球领先企业市场权力集中的主要根源,也是决定全球价值链上价值分配的决定性因素。嵌入全球价值链有利于发展中国家的本土企业迅速提高生产能力、接近全球市场和技术通道,但是从生产能力到创新能力的升级过程并非自动发生;全球价值链生产片断化带来创新过程的垂直分离和重新整合,发展中国家产业升级的关键在于本土企业的吸收能力和学习速度。     

产业联系与外资溢出效应-对浙江省制造业的实证研究

本文探讨水平联系、前向联系和后向联系对外商直接投资溢出效应的影响。利用浙江省制造业数据,通过实证分析发现,浙江省制造业外资总体上具有水平负向溢出效应,同时通过后向联系产生正向溢出效应。水平负向溢出效应主要是外资企业带来的激烈竞争所导致的,产业后向联系产生的正向溢出效应主要通过外资企业的本地采购发生。浙江省内资制造业企业并没有从购买外资企业中间投入品而显著提升效率。     

The Competitive Position of the Basque Aeroespatial Cluster in Global Value Chains: A Historical Analysis

In this paper, based on the case study of the aerospace cluster of the Basque Country (Spain), we aimed at analysing how local industries develop a new specialization, that is, how a cluster emerges, and how it evolves over time. For that purpose, apart from considering local factors (both forces that are internal to the cluster and to the territory), we explicitly consider the role of institutional and technological changes, and how they affect industry structure and governance patterns of global value chains (GVCs). We observe that global-scale regulations (deregulation and competition policy) and technological change, together with local factors such as the existence of anchor firms, local policies, related variety and social capital at regional and cluster levels played a significant role in the emergence of the cluster and how it became inserted in the GVCs. Later on, the development of suppliers' capabilities also had a relevant role in the evolution of the governance patterns of GVCs.     

Technological Learning and Innovation in China in the Context of Globalization

A team of China- and U.S.-based geographers develops the theoretical concept of "learning field" to advance the study of technological innovation through networking under conditions of ongoing globalization. The concept is applied in a survey of ca. 100 firms in the Zhengzhou Economic and Technological Development Zone, located in a relatively underdeveloped region of China. The findings emphasize the different patterns and challenges confronting companies of differing size, property rights, and R&D capacities, as well as the variable extent to which technological learning is based on local versus global linkages and networking. Key elements involved in successful technological upgrading (in addition to networking) are identified, including market structure, competitive strategies, and capital. Also examined are the roles played by geographic, relational, and institutional factors in providing opportunities for learning and cooperation among firms in an industrial district. Journal of Economic Literature, Classification Numbers: D21, D83, O31, P20. 8 figures, 3 tables, 67 references.     

全球视野下的价值链治理研究

在全球化背景下,以地方产业集群为发展模式的区域经济,其竞争力的提升需要在全球价值链中与区域外的经济行为主体积极互动,并实现升级。而价值链治理分析是经济地理学理论研究地方产业集群升级的关键。在这种研究视角下,本文以价值链治理为研究对象,首先界定了价值链治理的概念;并从理论上讨论了全球价值链治理模式的主要类型和演化过程;然后,进一步分析了价值链治理产生的原因、价值链治理的应用,以及价值链治理对地方产业网络升级的影响;最后,本文对国际现有的价值链治理理论进行了比较深入的讨论,并提出进一步研究的展望。     

Does Spatial Clustering of Foreign Direct Investment Foster Global Production Networks? The Case of Qingdao,China

This article examines how spatial clustering of foreign direct investment (FDI) can foster a global production network (GPN). The cluster concept, in general, stressed inter-firm relations between local and regional firms while neglecting global–local linkages in the spatial context. In contrast, GPN focuses on the advantages of international production organization and governance structure but underestimates regional or localized channels of production arrangement. By integrating the conceptual framework of spatial clustering of FDI and GPN, this paper provides empirical evidence of various channels to knowledge and innovation transfer between domestic firms and foreign-invested enterprises. This paper demonstrates that the different types of linkages formation are key determinant factors for establishing cluster through contributing to local economic development.     

DOES FIRM OWNERSHIP AFFECT SPILLOVER OPPORTUNITIES? EVIDENCE FROM CHINESE MANUFACTURING

The clustering of economic activity is believed to generate both positive own‐industry (localization) spillovers and negative competitive pressures. Using data on manufacturing enterprises operating in China during 1998–2006, this paper provides evidence on the net effect of opposing spillovers from nearby economic activity. Central to the analysis is the opportunity to distinguish local manufacturing enterprises by state, private, or foreign ownership. Systematic differences in average productivity of these firms enable inferences about differences in the strength of spillovers from one type of firm to another type. Results indicate that spillovers are larger within the same ownership type than they are across them, consistent with localization economies that operate within segmented channels of influence.     

Towards more (un)balanced trade. Production linkages between China and the Visegrad countries: country-level and sector-level analysis*

This article presents the Visegrad Group member countries with special focus on the role of these countries in global value chains (GVCs). The goal of this paper is to analyse the role these states play in global production linkages and evaluation of connections between the VG states and China. We verified two hypotheses: (1) the Visegrad countries have deteriorated their positions in GVCs in relation to China recently; (2) the Visegrad states have become more dependent on Chinese value added in selected sectors. The analysis consists of two steps. Firstly, we evaluated the role of the Visegrad countries in international production linkages with China using value-added foreign trade using country-level approach. Secondly, we focused on the sectoral links between China and the Visegrad countries.     

R&D Cooperation in Innovation Systems—Some Lessons from the European Regional Innovation Survey (ERIS)

Our paper summarizes some of the main results of the European Regional Innovation Survey (ERIS) as far as they are discussed in this special issue of European Planning Studies . The overall target of the ERIS project is a quantitative and qualitative assessment of determinants crucial for the innovation potential of any region, i.e. innovative and non-innovative manufacturing firms, business services and research institutions, as well as the innovative linkages and networks between these actors. Empirical research is based upon almost 8600 questionnaires collected in 11 European regions. Results confirm some of the common hypotheses on the relationship between space and innovation networks but others are contrary to existing scientific knowledge. Obviously the impact of national innovation systems on the innovation activities of manufacturing firms in a given European region is-at least-as strong as the impact of the respective regional innovation system. The spatial range of innovative linkages significantly depends on the size, the type of the cooperation partner, the R&D intensity and the industry of the analysed manufacturing firm. For example, the higher the technology intensity of the industry, the greater is the need of each firm to use intraregional knowledge via innovation linkages. It is therefore an important task in regional innovation policy to promote network-building among firms and other actors of a regional innovation system and to interlink these intraregional networks with national and international knowledge sources.     

Transnational corporations and the geographical transfer of localised technology: a multi-industry study of foreign affiliates in Sweden

Based on unique firm-level data from 323 majority-owned foreignaffiliates (MOFAs) located in West Sweden in the beginning of2000, we show that foreign-located affiliates of transnationalcorporations (TNCs) generate technological competencies, bothinternally as well as through organised cooperation with externalbusiness partners in the host country. This seems true not onlyfor manufacturing affiliates, but also for wholesale affiliatessupplying industrial products, as well as professional serviceaffiliates providing technical services. In addition, all threecategories of affiliates are engaged in ‘dynamic technologicalintegration’, i.e. a geographical transfer to parent andsister firms of technological competence that MOFAs have developedin cooperation with external business partners in Sweden. Thisindicates that not only the technological competence of MOFAsthemselves, but even the geographical context in which theyare embedded is a relational asset that is crucial for the overalltechnological competitiveness of TNCs. Above all, technological linkages were established with hostcountry customers. Important technological linkages were establishedboth with local business partners in West Sweden, as well asbusiness partners in the Rest of Sweden. Using a logistic regression analysis, we found that technologicalintegration is especially associated with affiliates operatingin competitive host country clusters, indicating that a largepool of indigenous technological competence acts as an importantpull-factor for inward asset-seeking FDI. However, technologicallinkages between foreign TNCs and host country partners doesnot come automatically, instead they need substantial and long-terminvestments in personal and non-personal resources.     

全球化背景下的广东省制造业地理集中研究

本文利用2004年经济普查的数据,分析了广东省制造业的地理分布特征。广东省大多数的制造业地理集中程度都较高,并且主要集中在珠三角地区,很多地理集中程度较高的制造业分布都存在较高的空间自相关性。对广东省制造业集中的实证研究表明,资源和能源投入强度较高的产业较为集聚,并且出口显著提高了产业集聚程度。尽管外资是广东省制造业发展的重要力量,但是并没有促进产业的集聚,说明制造业外资已经进入扩散阶段。本文的结果和全国尺度的研究结果存在差异,这说明地理尺度对于研究产业集聚非常重要。     

Do industrial districts influence export performance and export intensity? Evidence for Spanish SMEs' internationalization process

This paper seeks to enhance the understanding of the role of the industrial districts in the internationalization process of small and medium-sized enterprises (SMEs). The study focuses essentially upon the following issue: Can the location inside industrial districts influence the export performance and export intensity of the Spanish SMEs? To address this question, this study draws upon a sample of 285 manufacturing firms located in the Valencian community (a Spanish region) surveyed during the period January 2000 to March 2000. It is shown that industrial district location, marketing differentiation, institutional networks, clients' networks, competitors' networks and global orientation of sector and company have a clear influence on firms export performance and export intensity. The results are basically consistent with the limited previous research.     

新时期粤港澳区域整合发展的若干制约因素及调控

区域整合是基于市场机制与宏观调控背景下构建区域产业、基础设施、城市网络等结构与功能协调发展的机制。自结束了长期分离的格局后,粤港澳三地以制造业为主的分工合作关系及外向型基地初步形成。但从积极融入全球经济体系,提升区域竞争创新能力的要求看,目前仍存在机制不健全,各自为政,重复建设和盲目竞争等弊端。从整合体制、统一规划、调整结构等战略角度出发,形成有序的城镇格局,优化资源配置,建设国际化体系和高新技术基地,使珠三角成为21世纪全球重要的"都会经济区"和亚太地区制造业、金融、贸易发展的龙头,应是三地政府共同面对的职能。     

The wider effects of inward foreign direct investment in manufacturing on UK industry

This paper examines the wider effects of inward foreign directinvestment (FDI) to the UK on improving the practices and competitivenessof domestic industry. Surveyed domestic suppliers, competitors,and customers to foreign investors reported extensive positiveimpacts on their practices, focused particularly on reductionsin X-inefficiencies, and on their competitiveness, althoughin the case of competitors benefits had to be balanced againstadverse effects. Knowledge transfers through personal contactsand the demonstration effect, were important to the transmissionof impacts, but a number of other channels were also important,including additional supplier sales, improved customer inputs,and the competitive spur. Regional policymakers should takethese wider benefits into account in the design of policiesfor attracting and embedding foreign investment. However, whilstthere was no evidence that foreign firms in assisted regionshad fewer benefits than those in core regions, there was a lotof leakage outside of the areas attracting foreign firms, suggestingthat policies to promote spillovers should not be developedentirely in a local or regional framework.     

PANEL ON THE SOVIET UNION IN THE YEAR 2000

A panel of geographers debates possible future developments in the Soviet Union in regional and environmental policy, water resource management, agriculture, industry, energy, population, urban growth and planning, transportation, and foreign trade. The present emphasis on modernization of existing plant capacity in cities of the western, more heavily settled regions of the USSR seems destined to continue, although it will be constrained by a growing shortage of industrial labor, declining terms of trade and resource oversupply in increasingly competitive export markets, and the continued resistance of Central Asian populations to urbanization and industrial employment.     

农区产业集群、网络与中部崛起

我国中部六省地区由于多种原因在全国区域经济格局中已经成为了"经济增长速度的相对塌陷地区",实施"中部崛起"战略是学术界、中央和地方政府达成的共识。本文在分析中部地区存在问题的基础上提出,实施产业集群战略、创建本地企业网络是实现中部崛起的有效途径。发展农区产业集群可以提高集群企业和区域产业的竞争力,推动农村工业化和城镇化进程,促进县域经济的发展。而企业之间的网络联系是产业集群的本质特征,培育产业集群必须从创建企业网络入手。最后,本文对如何在中部农区培育产业集群、创建企业网络作了探讨。     

External Ties and the Reduction of Knowledge Asymmetries among Clusters within Global Value Chains: The Case of the Ceramic Tile District of Castellon

Classical industrial districts' literature is not focused on the role played by external ties but gives more importance to the local districts' endogenous development. Global value chains connect clusters to other external agents through external linkages and constitute a framework to analyse the complex inter-linkages between clusters and other external agents. In the field of the external ties and the global value chain approach Academia is primarily focused on the ties which link clusters in developing nations to global markets, although global value chains also consider connections between clusters in similar activities and even when both are located in developed nations. Thus, external linkages are mainly performed by multinational enterprise (MNE) affiliates which play fundamental role of knowledge diffusers and absorbers in the process of knowledge exchange throughout global value chains. The work examines the process of knowledge exchange between clusters through external ties using the global value chain approach. For this purpose, empirical work is conducted with 22 face-to-face interviews to provide a case study about a leading cluster in the global ceramic tile industry. Results show that the basic knowledge to successfully compete is locally originated, although it can be complemented with global knowledge learnt or generated in other territories. MNE affiliates bridge structural holes through external ties and reduce knowledge asymmetries within global value chains. External ties on network-based governance chains exist, matter and affect clusters allowing upgrading even between developed nations.