Diverse paths of upgrading in high-tech manufacturing: Costa Rica in the electronics and medical devices global value chains

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2019-01-01

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Abstract

© 2019 UNCTAD United Nations Conference on Trade and Development. All rights reserved. Costa Rica has sought to improve its position in the global economy by prioritizing export growth in two high-tech manufacturing industries led by foreign direct investment (FDI): electronics and medical devices. We use a global value chain (GVC) perspective to identify key commonalities and contrasts in Costa Rica's performance in upgrading these two sectors. Because the electronics and medical devices GVCs have very different structures in Costa Rica (electronics is dominated by a single large firm, Intel, whereas medical devices has a highly diversified set of foreign manufacturers), multiple forms of upgrading, downgrading and knowledge spillovers are possible. Although the experience of these two industries illustrates different paths to upgrading, developing backward linkages in Costa Rica was not the preferred nor the only way of moving up the value chain. The medical devices sector exhibited more traditional knowledge spillovers and labor market features of local industrial agglomerations, whereas the electronics sector demonstrated significant wage and skill-level gains because of the incorporation of high-value service activities due to the evolving global strategy of its GVC lead firm, Intel. By combining a GVC perspective with a focus on knowledge flows and value creation at the local level, we seek to promote more explicit integration of international business and economic geography concepts and methods.

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Scholars@Duke

Gereffi

Gary Gereffi

Professor Emeritus of Sociology

Gary Gereffi is Emeritus Professor of Sociology and Director of the Global Value Chains Center at Duke University (https://gvcc.duke.edu/).  He has published over a dozen books and numerous articles on globalization, industrial upgrading, and social and economic development, and he is one of the originators of the global value chains framework.  His most recent books are:  Handbook on Global Value Chains (co-edited by Stefano Ponte, Gary Gereffi and Gale Raj-Reichert), Cheltenham, UK: Edward Elgar Publishing. 2019); and Global Value Chains and Development: Redefining the Contours of 21st Century Capitalism (Cambridge University Press, 2018).  Current projects include:  (1) the impact of U.S. protectionism on jobs and regional trade agreements; (2) evaluating how the digital economy and Industry 4.0 are likely to affect international business strategies and industrial upgrading; and (3) shifting regional interdependencies in East Asia and North America, with a focus on China, South Korea and Mexico vis-à-vis the United States.

Bamber

Penny Bamber

Affiliate

Penny is a global value chain specialist, with over a decade of experience in research and consulting. Her work focuses on how countries, companies and workers – particularly those in developing countries – can more sustainably compete in the global economy. Her expertise lies in examining global industry dynamics to identify opportunities for different actors to engage, and developing strategies and solutions for them to do so. Widely cited, her work has covered a broad range of sectors and geographies, from inserting marginalized actors into the agricultural and mining industries in Latin America, advising on industrial policy development in the Philippines and identifying nearshoring opportunities in the healthcare sector for Central America, to examining the impact of automation on the future of Chinese industry.

With extensive contributions to the development of the global value chain framework, Penny has authored and contributed to numerous books, reports and journal articles on economic growth and development, circular economy, gender and trade, technology and skills for the future. Recent publications include the edited volume China’s New Development Strategies: Upgrading from Above and from Below in Global Value Chains together with fellow editors Gary Gereffi and Karina Fernandez-Stark. She has consulted and provided policy analysis for national and international organizations, including the World Bank, the OECD, UNCTAD, ILO, the African Development Bank and the Inter-American Development Bank.  She has led capacity-building programs for policymakers to boost national competitiveness in global trade in Africa, Asia, Latin America and the Middle East. Penny has a Master’s degree in Public Policy from the University of Chile, a Diploma in Public Policy from the University of Chicago, and a Bachelor’s degree in International Relations from the University of Pennsylvania.    


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