Diverse Paths of Upgrading in High-Tech Manufacturing: Costa Rica in the Electronics and Medical Devices Global Value Chains

30 Pages Posted: 11 Jun 2020

See all articles by G. Gereffi

G. Gereffi

Duke University - Department of Sociology - Director, Center on Globalization, Governance & Competitiveness

Stacey Frederick

Duke University - Center on Globalization, Governance, & Competitiveness; North Carolina State University - College of Textiles

Penny Bamber

Duke University

Date Written: April 26, 2019

Abstract

Costa Rica has sought to improve its position in the global economy by prioritizing export growth in two high-tech manufacturing industries led by foreign direct investment (FDI): electronics and medical devices. We use a global value chain (GVC) perspective to identify key commonalities and contrasts in Costa Rica’s performance in upgrading these two sectors. Because the electronics and medical devices GVCs have very different structures in Costa Rica (electronics is dominated by a single large firm, Intel, whereas medical devices has a highly diversified set of foreign manufacturers), multiple forms of upgrading, downgrading and knowledge spillovers are possible. Although the experience of these two industries illustrates different paths to upgrading, developing backward linkages in Costa Rica was not the preferred nor the only way of moving up the value chain. The medical devices sector exhibited more traditional knowledge spillovers and labor market features of local industrial agglomerations, whereas the electronics sector demonstrated significant wage and skill-level gains because of the incorporation of high-value service activities due to the evolving global strategy of its GVC lead firm, Intel. By combining a GVC perspective with a focus on knowledge flows and value creation at the local level, we seek to promote more explicit integration of international business and economic geography concepts and methods.

Keywords: global value chains; electronics; medical devices; upgrading; downgrading; knowledge spillovers; local linkages; servicification; industrial agglomerations

Suggested Citation

Gereffi, Gary and Frederick, Stacey and Bamber, Penny, Diverse Paths of Upgrading in High-Tech Manufacturing: Costa Rica in the Electronics and Medical Devices Global Value Chains (April 26, 2019). Transnational Corporations Journal, Vol. 26, No. 1, 2019, Available at SSRN: https://ssrn.com/abstract=3621987

Gary Gereffi (Contact Author)

Duke University - Department of Sociology - Director, Center on Globalization, Governance & Competitiveness ( email )

Box 90088
Durham, NC 27708-0204
United States
919-660-5880 (Phone)
919-684-2855 (Fax)

Stacey Frederick

Duke University - Center on Globalization, Governance, & Competitiveness ( email )

2020 W. Main St.
Durham, NC 27705
United States

HOME PAGE: http://www.gvcc.duke.edu

North Carolina State University - College of Textiles ( email )

Raleigh, NC 27695
United States

Penny Bamber

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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