Global Value Chains and Technological Capabilities: A Framework to Study Industrial Innovation in Developing Countries

Oxford Development Studies, 36(1): 39-58

The paper is co-authored with Andrea Morrison and Carlo Pietrobelli.

It presents a critical review of the Global Value Chain literature in light of the “Technological Capabilities” approach to innovation in LDCs. Participation in GVC is beneficial for firms in LDCs, which are bound to source technology internationally. However, the issues of learning and technological efforts at the firm-level remain largely uncovered by the GVC literature.
We propose a shift in the empirical and theoretical agenda, arguing that research should integrate the analysis of the endogenous process of technological capability development, of the specific firm-level efforts and of the mechanisms allowing knowledge to flow within and between different global value chains into the GVC literature.

Economia della Corea del Sud

Economia della Corea del Sud

Published by Carocci Editore

Written together with Giovanna Hirsch and Vasco Molini

This book analyses the economic model of development of South Korea. Since the Second World War, many economists have tried to understand how a poor country could develop and reach life standards similar to rich countries. What has happened in South Korea since the 1960’s is for sure extremely interesting from a development point of view. In a few decades South Korea has transformed itself from a case basket of underdevelopment to a high-income country. In this book, we analyze the main reasons for Korea’s economic miracle and its prospects of growth for the future.

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ICTs in Industrial Districts: An Empirical Analysis on Adoption, Use and Impact in the Biella Textile District

Industry and Innovation, 14(3): 277-303

The paper is in collaboration with Tommaso Ciarli.

The aim of this study is to analyse the main determinants of the adoption and use of ICT (Information and Communication Technologies) and the relationship between ICT and the patterns of innovation in an Italian industrial district. The analysis is carried out on a database of 118 textile enterprises located in Biella, a well known industrial district specialised in medium to high quality woollen yarns and textiles, which have been interviewed following a structured questionnaire.
On the whole, the rate of adoption and use of ICT in Biella is rather low, confirming the results of other studies on industrial districts specialised in traditional sectors. Nevertheless, our analysis also shows that considering ICT as a general technology may be misleading. It is instead useful to disentangle among different ICT; in particular, there are significant differences between IT involving production, administration and logistic processes and communication technologies (CT). Moreover, we have tested on a smaller sample of 50 firms the hypothesis that adoption and use of ICT may positively influence innovation. Here, the most interesting finding is that different types of innovations, i.e. product, process and organisational innovations, are influenced by very different variables.


The Role of Research in Wine: the Emergence of a Regional Research Area in an Italian Wine Production System

International Journal of Technology and Globalization 3(2/3): 155- 178

The article is written in collaboration with Andrea Morrison.

In recent years, the wine industry has undergone a radical technological modernisation in which scientific research has become extremely prominent. Focusing on a regional research system related to wine, we provide a detailed account of the structural features of the research and extension institutions in the Piedmont region and how they interact. The empirical analysis is based on detailed interviews with people from research centres, universities, extension agencies as well as on a database of research projects on topics relevant to the wine industry. Social network analysis is employed to describe the structural properties of the networks that have been established among universities, research and business organisations and firms, as a result of these projects. Based on these two data sources we provide a detailed picture of the actors, linkages and processes underpinning the regional wine research system.


Business Development Service Centres in Italy: close to firms far from innovation

World Review of Science, Technology and Sustainable Development, 4(1): 38-55 

The article is co-authored with Carlo Pietrobelli.

The notion of ‘Business Development Service’ (BDS) is quickly gaining popularity among policy makers and scholars of management, industrial organization and development. Similarly, attention is increasingly paid to the institutions and centers offering BDS, as an essential part of the ‘local’ or ‘regional innovation system’. The paper analyses the experience of BDS Centres in three highly developed Italian regions, Emilia Romagna, Lombardia and Veneto, and evaluates their performance and contribution to the regional industrial, and notably SME, development. The paper is based on a survey of 30 BDS Centres and it uses quantitative together with qualitative evidence.

Download the pdf, JA WRSTSD 2007-01

Upgrading to Compete: SMEs, Clusters and Value Chains in Latin America

Upgrading to Compete: SMEs, Clusters and Value Chains in Latin America

Published by Harvard University Press

Edited with Carlo Pietrobelli

This books investigates clusters and value chains in Latin America. Globalization imposes new conditions and rules for competitiveness in international markets. It poses the imperative to link up with other actors, both at the local and at the global level, and find new ways to interact and learn from the relationship. Can local markets and clusters represent a powerful alternative to global markets? Do transnational corporations and global buyers play a role and enhance or undermine local firms’ upgrading and learning? What opportunities do clustering and global value chains offer to SMEs in global markets?
Upgrading to Compete shows that both the local and the global dimensions matter at once. Clustering and collaborating with other local firms offers substantial advantages, while also participating in global value chains and interacting with foreign buyers and companies may enhance local firms’ capabilities and access to distant markets. However, what remarkably matters is the form of governance of value chains and clusters that importantly affects the upgrading process of local SMEs.
The book illustrates this with original empirical evidence from several clusters in Latin America. New case studies from Brazil, Chile, Mexico and Nicaragua are supplemented by desk studies on other experiences in the region.

«At a time when there is growing interest in Latin America on active production sector strategies and on the role of SMEs, Pietrobelli and Rabellotti make in this book an essential contribution. “Upgrading to Compete” is full of quality information and insights. I look forward for the introduction of many of the ideas and recommendations of this book into policy action.»
Jose Antonio Ocampo
Under-Secretary-General of the United Nations for Economic and Social Affairs

«This book offers a new way of thinking into fundamental aspects of industrial organization and international trade and exploits original case studies to develop new ideas and stylized facts.»
Michael Piore
David W. Skinner Professor of Political Economy, Massachusetts Institute of Technology

The book was reviewed in Foreign Affairs

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The effects of globalization on Italian industrial districts: Evidence from the footwear sector

European Planning Studies, 14(4): 485-502

This paper is in collaboration with Alessia Amighini.

It examines the impact of globalisation of production on the Italian footwear sector and investigates the structural changes taking place in some shoe districts as they join international production networks.
The following questions are discussed: Are Italian footwear districts specialising in particular phases of the production cycle? Is there a trend towards the reduction of activities carried out within districts? Or are different patterns emerging according to the districts’ main market segment and to the value chains (e.g. luxury fashion market or mass market) they belong to?
The study explores these issues using data on outward processing trade (OPT) collected by Associazione Nazionale Calzaturieri Italiani (ANCI) to analyse the fragmentation of production in the footwear sector at “provincia” level. The available disaggregation of data allows us to investigate the different outsourcing strategies and emerging trends within the district. Two case studies are presented; one on Riviera del Brenta in Veneto and the other on Barletta in Puglia.
In the footwear districts investigated, we find evidence of different international delocalisation strategies. We argue that these different patterns of specialisation are closely related to the clusters’ market position and suggest that these patterns influence the clusters’ potential for future competitiveness.

Is Korea catching up? An analysis of labour productivity growth in South Korea

Oxford Development Studies, 34(3): 323-339

The paper is written in collaboration with Giulio Guarini e Vasco Molini.

Comparing the Korean labour productivity growth in the last two decades with the
Japanese and US labour productivity growth, data confirm a process of catching up in several important manufacturing sectors. The paper investigates its determinants using a non-neoclassical model. Investments in skills and capabilities are found to be crucial in explaining this trend. Important policy implications for developing countries are then discussed. In the long run, a targeted education policy with government intervention and a strong emphasis on technical education can give high pay-offs. This conclusion holds in particular when the aim of the country is to compete in the international markets, not along the low road to competitiveness, based on squeezing wages and profit margins, but along the high road (i.e. improving productivity, wages and profits).


Upgrading in global value chains: lessons from Latin America clusters

World Development, 33(4): 549-73

The article is in collaboration with Elisa Giuliani and Carlo Pietrobelli.

It has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries. Nevertheless, recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels. In this study, we contribute to this debate focusing on the analysis of the relationships existing between clustering, global value chains, upgrading and sectoral patterns of innovation in Latin America. We find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains.
Download the pdf, JA World Development 2005-04

Clusters facing competition: the role of external linkages

Clusters facing competition: the role of external linkages

Published by Ashgate

Edited with Elisa Giuliani and Meine Pieter van Dijk

The book is a collection of papers on clusters in developing countries. The book explores the external sources of industrial cluster competitiveness and examines how they complement, integrate and substitute local, intra-cluster networks. The novelty of this book is to merge the cluster approach with two other conceptual approaches which have become increasingly popular in cluster and development studies: on the one hand, the Global Value Chains and their role in cluster upgrading processes; on the other, the National Systems of Innovation (NSIs) and their role in supporting the development of clusters in a national territory. The book explores these issues with empirical evidence from different countries in Latin America, Asia and the industrialized world.

«This book provides numerous and timely insights into new strategies for enhancing the competitiveness of firms and local clusters in the global economy. Replete with in-depth case studies across a broad range of industries and countries, this volume is must reading for anyone seeking to identify pragmatic as well as effective responses to the challenges of international competition today.»
Gary Gereffi,
Professor, Duke University, Durham, NC / USA

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An Empirical Study of the Determinants of Self-Employment in Developing Countries

Journal of International Development, 16: 803-820

The paper is co-authored with Matteo Aqulina e Carlo Pietrobelli.

Official statistics record a tremendous diversity in the level and dynamics of the self-employment rate across countries. Such diversity is even more pronounced for developing countries than for industrial countries. In these countries, self-employment figures may represent evidence of the spark of an emerging entrepreneurial class still in its infant stages, or conceal marginal urban manufacturing employment at the mere level of subsistence and disguising actual unemployment in years of economic depression. This paper documents this diversity for developing and developed countries with new empirical evidence, and tests the determinants of this diversity with econometric techniques. Estimates are presented on a sample of 64 developing countries and 19 developed countries in a period from the 1960s through the 1990s.
The results generally confirm a negative association between the rate of self-employment and the stage of development: self-employment would tend to disappear with the development process. However, we present evidence suggesting that in some cases self-employment is also related to high value-added manufactured exports, representing a dynamic and emerging form of entrepreneurship. To this aim, self-employment would not be motivated by the desire to evade taxes, but rather an active role of the government may enhance it. The relationships with the development of the financial sector, educational levels, and other cultural factors tend to vary.


Distretti industriali e globalizzazione: upgrading e downgrading nella Riviera del Brenta

Economia e Politica Industriale

This paper is concerned with the impact of globalisation on local competitiveness in Brenta, one of the most important Italian footwear districts. The aim is to integrate the typical industrial district approach with the global value chain approach. To understand the changes confronting Brenta, the paper distinguishes between enterprises operating in a) the top brand chain, dominated by the owners of global brands in the luxury market, and b) the high quality chain in which German buying groups aggregate many independent footwear stores. The questions addressed are: Is globalisation pushing Brenta towards new value chains? What types of governance characterise the relationships between local and outside actors? Do the chains’ leaders come from inside or outside the districts? Does the integration of industrial clusters in global value chains enhance or weaken local upgrading strategies? One of the main findings is the increasing importance of the top brand value chain in the district. To be part of the chain, Brenta’s shoe producers accept a functional downgrading, abandoning design and marketing and focusing on production. Nonetheless, the remarkable recent growth rates in the luxury industry, which is built around global top brands, have allowed local producers in this chain to perform better that those in other chains.