Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Global Production NetworksBy Matt Coty<br />
A Review of <br />“Whither Global Production Networks in Economic Geography”<br />By Hess, Martin and Yeung, Henry<br />A ...
Overview<br />Structures in which to study global production systems<br />National to international innovation systems<br ...
Structures in which to study Global Production Systems<br />How to study global production networks?<br />How to explain s...
Structures in which to study Global Production Systems<br />
National to international innovation systems<br />National Innovation Systems – the institutional determinants of learning...
National to international innovation systems<br />National vs. International linkages<br />National:<br />Nation contains ...
National to international innovation systems<br />National vs. International linkages<br />International linkages of the h...
National to international innovation systems<br />National vs. International linkages<br />Problem is that developing coun...
Mobility and diffusion of knowledge<br />Is innovation Immobile? <br />
Mobility and diffusion of knowledge<br />Knowledge and innovation tend to move slower than production or financial flows<b...
Mobility and diffusion of knowledge<br />How then does knowledge and innovation move?<br />Unlike production, knowledge mo...
Mobility and diffusion of knowledge<br />
Mobility and diffusion of knowledge<br />
Mobility and diffusion of knowledge<br />Advantages of location are important in determining knowledge flows<br />Product ...
Mobility and diffusion of knowledge<br />Extension of these advantages<br />Through time the knowledge flows through the G...
Mobility and diffusion of knowledge<br />Disadvantages of location are important in determining knowledge flows (when the ...
Mobility and diffusion of knowledge<br />Diffuse<br />Cluster<br /><ul><li>Standardized production
Take advantage of cost savings
Knowledge diffusion - slow
High End Production
Take advantage of knowledge spillovers
Knowledge diffusion - quick</li></li></ul><li>Mobility and diffusion of knowledge<br />How to deal with these problems:<br...
Implications for developing countries<br />Integration of developing countries into global production networks<br />Help t...
Implications for developing countries<br />Knowledge Diffusion into  a Developing Country<br />Parent Company<br />Knowled...
Implications for developing countries<br />Knowledge Diffusion into  a Developing Country<br />Parent Company<br />Knowled...
Implications for developing countries<br />Industrial upgrading – shifting to higher value added products and production s...
Implications for developing countries<br />Specialization<br />Inter-industry<br />Inter-factorial<br />Demand upgrade<br ...
Upcoming SlideShare
Loading in …5
×

Global Production Networks

3,523 views

Published on

Structures in which to study global production systems.
National to international innovation systems.
Mobility and diffusion of knowledge.

  • Be the first to comment

Global Production Networks

  1. 1. Global Production NetworksBy Matt Coty<br />
  2. 2. A Review of <br />“Whither Global Production Networks in Economic Geography”<br />By Hess, Martin and Yeung, Henry<br />A Review of <br />“Global Production Networks and the Changing Geography of Innovation Systems. Implications for Developing Countries” <br />By Ernst, Dieter<br />
  3. 3. Overview<br />Structures in which to study global production systems<br />National to international innovation systems<br />Mobility and diffusion of knowledge<br />Implications for developing countries<br />Conclusions<br />
  4. 4. Structures in which to study Global Production Systems<br />How to study global production networks?<br />How to explain spatially uneven development in capitalist economies?<br />
  5. 5. Structures in which to study Global Production Systems<br />
  6. 6. National to international innovation systems<br />National Innovation Systems – the institutional determinants of learning, knowledge creation, and innovation<br />Assumptions:<br />Innovation is essential for growth and welfare<br />Want to gain as a nation<br />
  7. 7. National to international innovation systems<br />National vs. International linkages<br />National:<br />Nation contains a unique economic structure<br />Determines its specialization<br />Determines its path of innovation<br />Determines its linkages (both national and international)<br />
  8. 8. National to international innovation systems<br />National vs. International linkages<br />International linkages of the host economy<br />Suppliers to multi-national firms<br />Licensed partners<br />
  9. 9. National to international innovation systems<br />National vs. International linkages<br />Problem is that developing countries often lack linkages in their own country<br />So international linkages fill in the gaps<br />R&D<br />Production<br />Supply<br />
  10. 10. Mobility and diffusion of knowledge<br />Is innovation Immobile? <br />
  11. 11. Mobility and diffusion of knowledge<br />Knowledge and innovation tend to move slower than production or financial flows<br />Tacit knowledge – slow<br />Implicit knowledge – fast<br />Desire to keep information to sustain competitive advantages<br />Synergy created from geographic clustering <br />
  12. 12. Mobility and diffusion of knowledge<br />How then does knowledge and innovation move?<br />Unlike production, knowledge moves and concentrates in specific clusters (semi conductor industry)<br />Standardized production and implicit knowledge<br />High end production and tacit knowledge<br />
  13. 13. Mobility and diffusion of knowledge<br />
  14. 14. Mobility and diffusion of knowledge<br />
  15. 15. Mobility and diffusion of knowledge<br />Advantages of location are important in determining knowledge flows<br />Product Life Cycle<br />Short – suppliers and assemblers need to locate near one another<br />Implication: advantages of clustering – (spillovers, efficiency…)<br />Long – no need for co location<br />Implication: more even geographic dispersion (take advantage of cheap labor etc…)<br />
  16. 16. Mobility and diffusion of knowledge<br />Extension of these advantages<br />Through time the knowledge flows through the GPN<br />Low end producers gain knowledge and produce higher end products while outsourcing the lower end products (thus further extending the chain and moving up it themselves) <br />Solectron <br />This is one way developing countries increase knowledge<br />
  17. 17. Mobility and diffusion of knowledge<br />Disadvantages of location are important in determining knowledge flows (when the chain grows spatially)<br />General:<br />Delivery and distribution <br />Communication<br />Demand fluctuation<br />International: <br />Political<br />Managerial<br />Inferior processes<br />Exchange rate fluctuations<br />
  18. 18. Mobility and diffusion of knowledge<br />Diffuse<br />Cluster<br /><ul><li>Standardized production
  19. 19. Take advantage of cost savings
  20. 20. Knowledge diffusion - slow
  21. 21. High End Production
  22. 22. Take advantage of knowledge spillovers
  23. 23. Knowledge diffusion - quick</li></li></ul><li>Mobility and diffusion of knowledge<br />How to deal with these problems:<br />Standardized processes can be located far away<br />Hi end production close (cluster advantages)<br />Production location near high growth markets<br />
  24. 24. Implications for developing countries<br />Integration of developing countries into global production networks<br />Help the country– diffusion of knowledge<br />Hurt the country – erode competitive advantages<br />
  25. 25. Implications for developing countries<br />Knowledge Diffusion into a Developing Country<br />Parent Company<br />Knowledge Flow<br />
  26. 26. Implications for developing countries<br />Knowledge Diffusion into a Developing Country<br />Parent Company<br />Knowledge Flow<br />
  27. 27. Implications for developing countries<br />Industrial upgrading – shifting to higher value added products and production stages through increasing specialization.<br />-Ernst 2001<br />Assumptions:<br />Knowledge<br />Innovation<br />
  28. 28. Implications for developing countries<br />Specialization<br />Inter-industry<br />Inter-factorial<br />Demand upgrade<br />Functions upgrade<br />Identify links between <br />innovation<br />Linkages<br />specializations<br />Sustained Growth<br />
  29. 29. Demand Upgrades<br />Inter-Industry<br />Functional Upgrades<br />Inter-Factorial<br />Sustained Growth<br />
  30. 30. Implications for developing countries<br />Policy Roles for Government concerning integration of GPN’s<br />Globalization makes governments enact policies<br />Investment policies<br />Trade policies<br />Targeted industrial development to take advantage of specializations and competitive advantages<br />Not to do so would be detrimental<br />vulnerability to MNC’s<br />international financial fluctuations<br />
  31. 31. Implications for developing countries<br />Interesting Theory: Intellectual property rights<br />Should developing countries encourage the diffusion of intellectual property? (i.e. weak property rights?) Then gradually increase protection as knowledge increases?<br />
  32. 32. Conclusions<br />Global Production Networks and Developing Countries<br />Absorption of foreign ideas and knowledge<br />Reduce risk through diversification<br />Increase in knowledge leads to increase in innovation which leads to sustained growth<br />

×