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							  CHINA, INDIA AND GLOBAL
         DEVELOPMENT
Identifying a research agenda on
   production and innovation
               International Conference on Globalisation and
               Development in the Chinese Economic Region

               National Taiwan University, Taipei,
               22-23 June 2007

               Dr Khalid Nadvi
               IDPM, School of Environment & Development
               University of Manchester
The Changing Geography of Global
Production - Global Value Chains and
Production Networks

   Global Value Chains (see www.globalvaluechains.org)
    –   Engagement and organisation of local producers by global
        lead firms for production for global markets. The approach
        focuses on:

            Identification of distinct aspects of rent generating activities
             within the chain
            Governance of intra-firm ties (market to hierarchical ties, and
             in-between)
               –   Power relations within firm-ties, in particular the relative power of
                   the lead firm
            Prospects for upgrading – product, process, functional, chain
From ‘Northern’ to ‘Asian’ led GVCs

   Traditionally GVC lead firms are ‘Northern-based’. But increasingly
    Asian firms are taking on more substantive tasks in organising (e.g.,
    ‘triangular manufacturing’ in garments).

   Are Asian firms leading GVCs? If so, this raises various questions:

     –   Are Asian led GVCs organised differently then ‘Northern-led’GVCs?
     –   Do other developing country producers face different challenges to enter
         into Asian-led chains?
     –   What are the upgrading prospects for developing country producers within
         such chains
     –   How do Asian-led chains engage with global challenges around standards
         – especially labour, social and environmental standards?
What implications for Innovation?

   How is the changing patterns of GVC ties in production
    affecting processes of knowledge development and innovation
    within Asian firms, and Asian economies?

    –   Are there common patterns in the evolution of innovation
        capabilities and innovation systems in leading Asian economies?
    –   How has this influenced development of capabilities in local firms?
    –   How does this challenge existing governance ties within GVCs
        organised by northern lead firms, or chart new arrangements
        within Asian-led GVCs?
    –   What challenges and opportunities arise from this for other
        developing country firms and economies?
Globalisation and Standards

   A key agenda in global production today is
    related to standards compliance
    –   Technical standards (product specific standards)
            Industry-led
            Closely tied to innovation and technology-led
             competition
    –   Process standards
            Quality, Environmental, Labour, Social, Ethical
            Global (Northern) Public and Private Actors engaged in
             standard formulation and monitoring
Standards Takers or Standard Makers?

   Are Asian-led GVCs, allowing Asian actors (firms,
    NGOs, Govt) to become standard makers?
    –   Technical Standards
    –   Process Standards


   What consequences for?
    –   Global standards regimes (new rules of trade)
    –   Local Regulatory processes – public and private
    –   For other developing country economies, firms and workers
Regional Networks in Production and
Innovation

   East Asia (‘greater China’?) marked by strong
    regional production networks
    –   How critical is this to regional production dynamism?
    –   To the ability of East-Asian lead firms to organise regional
        GVCs, and the consequences for producers outside of the
        region to enter into such chains?
    –   To stimulate regional innovation networks
   South Asia (‘greater India’?) marked by weak
    regional production networks
    –   To what extent does this limit the prospects for further
        growth in production and innovation for South Asian led
        GVCs?
Towards a framework for comparative
research

   Conceptual models
     –   GVC analysis; Innovation and learning systems literature
   Cross-country sectoral case studies on:
     –   Garments
     –   Electronics
     –   Software services (BPO)
   Focus on case studies of Taiwanese led GVCs
     –   FDI into mainland China and the organisation of production chains
         within China
     –   FDI to other developing countries and the organisation of
         production chains in other developing countries
     –   Innovation networks
     –   Standards regimes