Trade and Innovation in Global Networks Regional Policy Implications, a Think Piece
Chapter 3 in Jos Leijten, ed., Can Policy Follow the Dynamics of Global Innovation Platforms? The International Innovation Policy Network of the Six Countries Programme, Delft
33 Pages Posted: 26 Apr 2016
Date Written: October 10, 2014
This Think Piece explores how integration into international trade through global networks of production (GPNs) and innovation (GINs) might affect a region’s innovation capacity. As regions across the globe are progressively integrated into those global networks – some certainly more than others – these regions are all faced with a fundamental challenge: How might progressive integration of its firms into GPNs and GINs affect learning, capability development and innovation? Will network integration unlock new sources of industrial innovation? Or will it act as a poisoned chalice that will sap and erode the region’s accumulated capabilities?
The paper presents illustrative examples of how “ubiquitous globalization” increases the diversity and complexity of GPNs and GINs, and briefly discusses the underlying systemic pressures and enabling forces. In order to capture the gains for innovation that a region might reap from global network integration, the paper suggests moving from a one-way analysis of the external impacts on a region’s innovation capacity to an analysis of two-way interactions. The paper concludes with Policy Implications and highlights Unresolved Issues for Future Research, including the critically important issues of spillover employment effects and inequality.
Keywords: Trade and innovation, global production networks, global innovation networks, industrial upgrading, regional policy
JEL Classification: F1, F68, L63, L98, M16, O25, O52
Suggested Citation: Suggested Citation