Industrial Upgrading and Cluster Development in the Medical Devices and Aerospace Sectors in Baja California (Mexico)

Abstract

This study analyses the role of the medical device and aerospace sectors in Baja California’s recent process of productive transformation and integration into global value chains (GVCs). Drawing on a combined cluster development and GVC approach, it examines how firms, institutions, and public policies interact to shape upgrading opportunities and development outcomes at the subnational level. Baja California has undergone a significant restructuring of its industrial base, moving from large-scale consumer electronics assembly toward more knowledge-, regulation-, and quality-intensive manufacturing activities. The medical devices sector is organized around a set of global lead firms such as Medtronic, Cardinal Health, and Becton Dickinson, that structure production networks and define upgrading pathways for suppliers and workers. In contrast, the aerospace sector is characterized by a distributed anchor structure, with multiple Tier-1 and Tier-2 firms jointly shaping cluster dynamics. Despite their strong integration into North American production networks, both sectors remain concentrated in manufacturing and assembly functions. The study identifies opportunities to advance economic, social, and environmental upgrading through targeted policies that strengthen supplier development, workforce skills, innovation capacity, and sustainability.