Innovation Trajectories in Developing Countries: How Global Value Chains and Innovation Systems Coevolve

The increasing involvement of developing countries in Global Value Chains (GVCs) when supported by well-developed Innovation Systems (ISs) could influence the building of technological and innovation capabilities of their firms and sectors. Introducing the notion of co-evolution of global value chains and innovation systems to reflect this dynamic, we propose some illustrative trajectories for learning and innovation. The trajectories proposed are supported by examples that offer up evidence on improvement in local innovation capabilities with potentially positive effects on overall competitiveness, but also cases in which there is little progress or even a loss of previous innovation capacity.