CHINA, INDIA AND GLOBAL DEVELOPMENT Identifying a research agenda on production and innovation International Conference on Globalisation and Development in the Chinese Economic Region National Taiwan University, Taipei, June 2007 Dr Khalid Nadvi IDPM, School of Environment & Development University of Manchester

The Changing Geography of Global Production - Global Value Chains and Production Networks Global Value Chains (see – Engagement and organisation of local producers by global lead firms for production for global markets. The approach focuses on: Identification of distinct aspects of rent generating activities within the chain Governance of intra-firm ties (market to hierarchical ties, and in-between) – Power relations within firm-ties, in particular the relative power of the lead firm Prospects for upgrading – product, process, functional, chain

From ‘Northern’ to ‘Asian’ led GVCs Traditionally GVC lead firms are ‘Northern-based’. But increasingly Asian firms are taking on more substantive tasks in organising (e.g., ‘triangular manufacturing’ in garments). Are Asian firms leading GVCs? If so, this raises various questions: – Are Asian led GVCs organised differently then ‘Northern-led’GVCs? – Do other developing country producers face different challenges to enter into Asian-led chains? – What are the upgrading prospects for developing country producers within such chains – How do Asian-led chains engage with global challenges around standards – especially labour, social and environmental standards?

What implications for Innovation? How is the changing patterns of GVC ties in production affecting processes of knowledge development and innovation within Asian firms, and Asian economies? – Are there common patterns in the evolution of innovation capabilities and innovation systems in leading Asian economies? – How has this influenced development of capabilities in local firms? – How does this challenge existing governance ties within GVCs organised by northern lead firms, or chart new arrangements within Asian-led GVCs? – What challenges and opportunities arise from this for other developing country firms and economies?

Globalisation and Standards A key agenda in global production today is related to standards compliance – Technical standards (product specific standards) Industry-led Closely tied to innovation and technology-led competition – Process standards Quality, Environmental, Labour, Social, Ethical Global (Northern) Public and Private Actors engaged in standard formulation and monitoring

Standards Takers or Standard Makers? Are Asian-led GVCs, allowing Asian actors (firms, NGOs, Govt) to become standard makers? – Technical Standards – Process Standards What consequences for? – Global standards regimes (new rules of trade) – Local Regulatory processes – public and private – For other developing country economies, firms and workers

Regional Networks in Production and Innovation East Asia (‘greater China’?) marked by strong regional production networks – How critical is this to regional production dynamism? – To the ability of East-Asian lead firms to organise regional GVCs, and the consequences for producers outside of the region to enter into such chains? – To stimulate regional innovation networks South Asia (‘greater India’?) marked by weak regional production networks – To what extent does this limit the prospects for further growth in production and innovation for South Asian led GVCs?

Towards a framework for comparative research Conceptual models – GVC analysis; Innovation and learning systems literature Cross-country sectoral case studies on: – Garments – Electronics – Software services (BPO) Focus on case studies of Taiwanese led GVCs – FDI into mainland China and the organisation of production chains within China – FDI to other developing countries and the organisation of production chains in other developing countries – Innovation networks – Standards regimes