Article
Journal of World Business

Variety of Innovation in Global Value Chains

By: Giulio Buciuni and Gary P. Pisano

Format:Print

Abstract

This article analyzes how the geography and organization of pre- and production stages in Global Value Chains (GVC) contribute to lead firms' innovation development. A novel approach in GVC studies is introduced based on transaction cost economics (TCE) and the innovation strategy's Modularity-Maturity matrix. The combination of these two perspectives allowed the conceptualization and assessment of two key dimensions in the generation of innovation in GVC: the geographic dispersion of value chain stages and lead firms' control over operations. The study of the intersection of the two dimensions led to the identification of four distinct innovation models in GVC. Evidence from four global manufacturing industries—pharmaceuticals, bicycle, design furniture and wine—suggests that lead firms' innovation capabilities and product innovation cycle are shaped by the specific structure of the GVC wherein they operate.

Keywords

GVC; Global Value Chains; Manufacturing; Production; Global Range; Innovation and Invention

Citation

Buciuni, Giulio, and Gary P. Pisano. "Variety of Innovation in Global Value Chains." Art. 101167. Journal of World Business 56, no. 2 (February 2021).