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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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Integration in global IT value chains does not necessarily improve innovation capacity
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Innovation in global value chains

In this chapter, the authors focus on innovation in global value chains and on the role that such chains play in building and deepening capability. They also focus on the trajectories along which firms, located in developing countries, once inserted into global value chains acquire or lose innovation capability. To do so, they bring together the global value chains and innovation systems approaches. Their key arguments are that global value chains interact with innovation systems in multiple ways and that these interactions have important implications for the speed, depth and overall quality of capability building in developing-country firms. They outline five innovation capability trajectories and show how capability building at the firm level interrelates with the various ways in which global value chains and innovation systems co-evolve.

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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.

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Innovation in mining value chains: New evidence from Latin America

The paper investigates new opportunities for innovation and linkages associated to mining activities in Brazil, Chile and Peru. Three types of opportunities were researched: demand side, supply side and local specificities. The last source of opportunities is key for natural resource related activities. The evidence shows that an increasing demand is introducing important incentives for innovation and local suppliers. Nevertheless, a hierarchical value chain, dominated by few large firms, and poor linkages is blocking the diffusion of innovations and hindering suppliers’ development. The emergence of a group of highly innovative suppliers, which were identified in the three countries, is explained mostly by new technological and knowledge opportunities, which are not exploited by large incumbents and open spaces for new entrants. Local specificities are also key in the explanation of local suppliers. It remains a challenge however, how these, most of which were created to satisfy local needs, will move from local to global.

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Upgrading, Interactive Learning, and Innovation Systems in Value Chain Interventions

Value chain interventions are increasingly used by donors in the context of private sector development. The paper develops a typology of such interventions, and presents the case of one multilateral lending institution – the Inter-American Development Bank. It argues that interventions risk transforming into an empty label and that an understanding of core global value chain (GVC) concepts, such as power, governance, and rents, is necessary. Further, interventions need to consider different learning channels internal and external to GVCs and particularly the interaction of GVCs with local innovation systems, and the interactive and systemic nature of knowledge and learning. These dimensions have often been overlooked in actual policies and programs. The paper concludes that an improvement in the definition of main concepts and approaches derived from the critical tradition of the GVC literature and of learning and innovation concepts is urgently called for. This reinforces the need for a new generation of industrial policies.

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