Jorge Katz, Carlo Pietrobelli · 2018
Resources Policy

Natural resource based growth, global value chains and domestic capabilities in the mining industry

Received theory of production is not very useful if we try to understand what the ‘sources’ of growth are when we deal with natural resource-based sectors of economic activity. In these industries, a complex set of interactions and co-evolution prevails between firms producing the commodity and leading the value chain, subcontractors supplying them with machinery, equipment, services and process engineering knowhow, public sector agencies monitoring their environmental impact and local communities engaged in the exploitation of the resource. These agents interact on a daily basis giving rise to a complex set of ‘sector specific’ rules of governance which vary from country to country and from sector to sector.

In this paper we look at the mining industry, that has experienced a very rapid process of change due to the dramatic expansion of demand from China, India and other economies, and to major changes in the international knowledge frontier in many different scientific and technological disciplines (e.g. geology, biotechnologies, digital and computer sciences, health sciences and engineering). These developments have induced dramatic changes in the industry and most notably in the patterns of interaction among the various agents mentioned above. A similar process of sector-specific dynamic interdependencies seems to prevail in other natural resource based sectors, such as aquaculture, forestry products and others. In this paper we present a model of these interactions and sketch out an analytical view as to how production organization takes place in the mining sector, and how these location-specific forces induce change in the industry over time. Our way of looking at these issues has strong policy implications which we briefly examine in the final pages of the paper.

Full publication is available on: DOI 10.1016/j.resourpol.2018.02.001

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Carlo Pietrobelli

Carlo Pietrobelli
Uni Roma Tre

Carlo Pietrobelli is a professor and policy advisor with over 30 years of experience on innovation and industrial development and policy. He is currently Professor of Economics at the University of Roma Tre, Italy, Professorial Fellow at UNU-MERIT, Maastricht, and Adjunct Professor at Georgetown University, Washington D.C.. He was Lead Economist at the Inter-American Development Bank (November 2009-November 2016), where he was in charge of designing and managing programs to promote competitiveness and innovation in Latin America and the Caribbean. His activities included: cluster and value chain programs, the impact evaluation of such programs, innovation and industrial policies, support to Competitiveness and Innovation Councils, programs for local economic development, productive corridors, programs and institutions to support technology transfer and small and medium-sized enterprises development.

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