Global Value Chains and Innovation Systems
In this paper we study the relationship between innovation, upgrading and Global Value Chains (GVCs) We first introduce what is meant by innovation in developing countries in an evolutionary economics perspective. Then we discuss why an innovation perspective is important for the discussion of upgrading in GVCs, and how GVCs may crucially influence (foster or hinder) innovation in developing countries. To this aim, a proper understanding of the concept of innovation systems in a development context is essential, and this is presented in the third section, in which we also discuss a conceptual framework to investigate how GVCs and innovation systems jointly contribute to innovation in developing countries. We conclude the paper by summarizing our argument and drawing some essential considerations for public policies. JEL Codes: O14, O32, O43