Production and Innovation Networks, Global

Encyclopedia of Global Studies, Vol. 3, 2012

6 Pages Posted: 9 Mar 2016 Last revised: 16 Mar 2016

See all articles by Dieter Ernst

Dieter Ernst

East-West Center; Centre for International Governance Innovation (CIGI)

Date Written: March 6, 2016


The emergence of global corporate networks that integrate dispersed production, engineering, product development and research activities across geographic borders poses new challenges and opportunities for global studies. The challenge is to trace down and decipher the increasingly complex forms of these networks that have expanded well beyond the traditional centers of the global economy in the US, the EU and Japan. Much of the action now is in Asia, especially in China and India.

An equally important challenge for global studies is to identify the drivers and impacts of these global networks that are pushing interdependence among national economies to historically unprecedented levels. Global corporations are at the main drivers, as they seek to increase return-on-investment and penetrate high-growth emerging markets. While governments until recently have been only marginal players, the global economic recession has forced them to redefine and increase their involvement.

The study of global production and innovation networks (GPN and GIN) also provides a powerful tool for sharpening the research agenda of global studies and for developing new policy responses. As global networks encompass production as well as research and development (R&D), it is no longer sufficient to focus political debates about globalization on offshore outsourcing of manufacturing and services.

Offshoring of R&D through GIN gives rise to a new geography of knowledge which however is not a flatter world. While the US, Europe and Japan retain their dominance in science and technology, new, yet very diverse and intensely competing locations for innovation in emerging economies have entered the stage. Compared to the established leaders, the new players have different needs and institutions, business models and capability sets. Hence, they will seek to adjust the rules of the game.

Some of them, especially China, are strong enough to challenge the existing rules of the game, requiring changes in the governance of international trade, investment and finance. The study of GPN and GIN helps to guide necessary adjustments in national policies, economic governance and institutions, both in incumbent leaders and in emerging economies.

Part one looks at defining characteristics of GPN and how they developed over time. Part two documents the rapid expansion of GIN and their extension into Asia. Part three presents findings on impacts.

Keywords: Global production networks, global innovation networks, global corporations

JEL Classification: F2, F6, O3

Suggested Citation

Ernst, Dieter, Production and Innovation Networks, Global (March 6, 2016). Encyclopedia of Global Studies, Vol. 3, 2012. Available at SSRN: or

Dieter Ernst (Contact Author)

East-West Center ( email )

1601 East-West Road
Honolulu, HI 96848-1601
United States

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2

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