Innovation and technological change play an important role in poverty reduction through their contribution to growth, their use of factors of production, their environmental spillovers, the social ...relations associated with production and the characteristics of the products which they produce. It was only after the 1960s that these linkages were identified, with the recognition that much of global technological progress was directed to meet the needs of the global rich, and was best-suited to operation in high-income environments. The development and diffusion of “appropriate technologies” was an agenda largely pursued by the not-for-profit Appropriate Technology movement. However, with the global diffusion of innovative capabilities, and the rapid rise of incomes of the very poor – the “second bottom billion” – innovation for the poor and innovation appropriate for production in low-wage and poor-infrastructure environments has increasingly become an arena for profitable production. The very large size of China and India, coupled with their growing technological capabilities and the rapid growth of low-incomes, makes it likely that they will become the dominant sources of innovation for the poor.
This paper addresses the generation of rents and the distribution of gains in the global operations of governed Global Value Chains (GVCs) and seeks to provide an architecture ...for analyzing the governance of GVCs. It distinguishes between four sets of rent—gifts of nature; innovation rents; exogenously defined rents; and market power—and three spheres of governance—setting the rules -“legislative governance”; implementing the rules -“executive governance”; and monitoring rules and sanctioning malfeasance -“judicial governance.” The exercise of governance power in GVCs over the generation, protection and appropriation of rents is considered though the lens of four sets of key GVC stakeholders—the corporate sector, civil society organizations, the nation state and supranational institutions. This general analysis is given flesh through three case studies: food-safety standards in GVCs; taxation policies and competition policies. In these sectors, the corporate sector is generally much more effective in governing rent generation and appropriation in the global operations of GVCs than are the three sets of non-corporate stakeholders. From this observation we offer a hypothesis that the capacity of non-corporate stakeholders, including national states, to govern GVCs is contingent upon the extent to which this coincides with the interest of the corporate sector. However, as noted, this balance of power between private and non-corporate actors is a contested terrain and dynamic in nature.
•Emerging economies are beset by massive social and economic exclusion.•Limited opportunities for emerging economies to replicate the success of China and other dynamic Asian exporting economies.•New ...opportunities for innovation in emerging economies to promote sustainable growth, fuelled by the diffusion of ICTs.•Expanded South-south trade provides opportunity for a more sustainable growth trajectory.•Both the crisis in development trajectory and the opportunity for more sustainable innovation and growth paths are informed by the pioneering contributions of Chris Freeman.
This essay begins with a recounting of the rise of the Mass Production techno-economic paradigm and the emergence of the systemic economic crisis in the early 1970s. It then explains how this crisis was stemmed by the deepening of globalisation, which accelerated during the 1980s. However, shortly before the turn of the millennium, the internal fissures of the paradigm became more apparent, resulting in a renewed slowdown in growth and global financial crises. In the context of these global developments, most emerging economies are confronted by two structural problems. The first is the prevalence of a massive informal sector; the second is the erosion of the possibilities for a flying geese policy replicating the export success of China. However, crisis presents both challenge and opportunity, and three sets of innovation opportunities are addressed in the paper. These are the largely unrecognised innovative potential within the informal sector, the possibilities opened up by growing regional and South-South trade, and the transformative potential of the heartland technology driving the new techno-economic paradigm, ICTs. Building on seminal contribution to ideas by Freeman, we argue that these are important pillars to build an innovation agenda for inclusion in developing countries. The essay concludes with a discussion of the main policy implications to maximise the development impact of these new opportunities.
Este documento analiza el papel desempeñado por las cadenas globales de valor (CGV) en el mantenimiento a partir de los años ochenta del paradigma de la producción en masa, relacionando el declive de ...la participación de las CGV con la fractura de dicho paradigma. En la segunda parte, se analiza el surgimiento del nuevo paradigma tecno-económico de las TIC, concluyendo que, si bien no provocará el colapso de la globalización, sí cambiará su naturaleza. Las finanzas, la inversión, el conocimiento, la tecnología y los valores seguirán difundiéndose a escala mundial, pero la producción se acercará cada vez más al consumo. Pero las cadenas de valor transfronterizas seguirán expandiéndose, y serán predominantemente regionales y no mundiales
Effective insertion into global export markets offers the potential for sustainable income growth. However, inappropriate positioning in global markets may well lead to immiserising growth. The key ...to achieving the beneficial outcome lies in the capacity to identify, appropriate and protect rents, and in the context of intense global competition, to develop the capacity to master dynamic capabilities in order to generate rents on a sustainable basis. This rent policy agenda is necessarily contextual. We argue that the current temporal context is one in which an increasing share of global trade occurs within global value chains (GVCs), and that this is widely recognised. Less widely recognised (and we believe that this is the value added in this article) is the key sectorial distinction between vertically specialised GVCs and additive GVCs. These two families of GVCs require different corporate strategies and different forms of policy support. We refer to the two strategic agendas as ‘thinning’ (in the case of vertically specialised GVCs) and ‘thickening’ (in the case of additive GVCs). The additive GVCs tend to be relatively more important in low- and middle-income economies, particularly in Africa and Latin America and parts of South and East Asia. Critically, since effective policy support applies to the agricultural, resource, manufacturing and services sectors (and to the interconnections between them), we argue that ‘industrial policy’ is a misnomer, and instead we conceive of the policy agenda as one that addresses the ‘productive sector’.
ABSTRACT
Despite rapid economic growth, the numbers living in absolute poverty in Africa have grown. China's rapidly expanding presence in Africa is widely considered to be a prime source of this ...unequalization. However, at the same time, its presence also supports countervailing and unrecognized processes of equalization, although this varies by country, class, gender and age grouping. China has the capacity to help Africa move to a more sustainable and less unequal growth path by providing low‐cost consumer and capital goods, new market opportunities which can be accessed by small‐scale producers and new, more appropriate capital goods. Taking advantage of the China‐induced commodities price boom to promote more equal patterns of growth will depend on the capacity of African actors to promote linkages effectively. The extent to which Africa is able to take advantage of opportunities opened up by China to move to a new, more inclusive growth path will largely be determined by political developments in Africa. But these political dynamics are not independent of China's increasing economic and political footprint, both globally and in its direct relations with Africa.
In challenging the conventional wisdom at the time, Singer and Prebisch posited a number of explanations for declining terms of trade of developing economies, including both country- and ...product-specific factors. Over the past decade, we have begun to witness a simultaneous process of price differentiation within commodities (with the prices of some commodities increasing) and within manufacturing (with the price of many manufactures falling). These price changes may reverse the decline in the terms of trade of commodity producers. The entry of China into the global market has played an important role in this, augmenting the demand for many “hard commodities.” Its role as an exporter of manufactures, coupled with concentration in global buying may undermine the prices of many manufactures.
First published in 1984, this work explores the issues surrounding the industrialisation of the Third World at the beginning of the 1980s. The expectation that Newly Industrialising Countries would ...facilitate industrial growth via an outward-orientated strategy had begun to be the combination of growing recession, growing protectionism and the diffusion of radical microelectronics-related technical change. In addition, the high indebtedness of developing countries made them increasingly dependent on assistance from the IMF and IBRD, whose policies increased the tendency towards de-industrialisation.
The papers in this volume explore all of these issues and their implication for LDC industrial strategy in the 1980s.
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