Innovation and value chains

IDS' work on innovation and value chains explores opportunities for poor people to enhance their income when businesses in developing countries participate in global value chains.

Workers on a kettle production line in a household electronics factory, producing goods for both the Chinese and export market. Guangdong Province. Credit: Mark Henley / Panos

IDS work on global value chains has explored how businesses in developing countries are increasingly tied into trans-national networks of firms that coordinate the design, production and sale of products around the world. In the past four decades there has been a significant transfer of manufacturing activities to developing countries, which has created jobs. However, to increase the benefits of participation in global value chains, firms in developing countries have to acquire the capabilities to produce more sophisticated products and take on additional functions along the value chain.

The same value chain diagnostic tools and perspectives on how firms link together to produce goods can be applied in national settings to explore how to promote business linkages and expand market opportunities for poor people.

IDS work on innovation and value chains is exploring:

Business Innovation Facility

The Business Innovation Facility (BIF) aims to catalyse market systems change in order to benefit poor producers, consumers and employees More details

Changing Knowledge Divide in the Global Economy

The question driving this project was how was the 'organisational decomposition of the innovation process' (ODIP) changing the global distribution of innovation activities. More details

Clusters in the Global Economy

While the debate on industrial clusters and local innovation systems was mainly concerned with local linkages, this work examined global linkages and how they affected local relationships. More details

Comparison of Upgrading in Global and National Value Chains

An analysis of whether firms in the Southern Brazilian clusters of the Sinos Valley (footwear) and the Serra Gaucha (furniture) show different patterns of industrial upgrading according to the global and national value chains they feed into. More details

Framework for Assessing the Impacts of Efforts to Enhance Access to Nutritious Foods

The objective of this research is to develop capacity and an analytical approach for the analysis of value chains-based initiatives aimed at enhancing access and consumption of nutritious foods by the poor and to use this learning to develop research proposals on leveraging value chains for nutrition. More details

Global Brands from China?

A comparative study of the acquisition of branding capabilities in domestic and global value chains. More details

Global Power Shift and Low Carbon Transformation

Two transformations are likely to dominate the first half of the twenty-first century. One is the shift in economic power from the West (North America and Western Europe) to the East (China and the East Asian production system). The second is the transition from a high to low carbon economy. More details

Outsourcing and Innovation in the Indian Software Industry

This research investigated whether the capabilities associated with the basic 'production' of software had led to increasing 'innovation' capabilities after the turn of the millennium. More details

Pathways to Inclusive Development through Innovation, Technology and Change

Pathways to Inclusive Development through Innovation, Technology and Change is developing a framework to analyse alternative pathways that link different forms of technological innovation, and evaluate resulting structural change and inclusion outcomes in low-income countries. More details

Policy Instruments and Public-Private Collaborations

The collaboration will assess policy approaches to economic inclusion of highly marginalised populations (displaced, indigenous, Afro-Colombian, extremely poor) in agricultural value chains in Colombia. It will focus on a key policy instrument – public-private partnerships – and on approaches that support stabilisation in post-conflict regions. More details

Public Private Partnerships (PPPs) in Agriculture: Enabling Factors and Impact on the Rural Poor

This research will identify the key factors driving the effectivness of public-private partnerships (PPPs) at bringing sustained increases in income for smallholder farmers at scale and delivering positive development outcomes across rural communities. More details

Rent Management: the Heart of Green Industrial Policy

At the heart of green industrial policy is rent management: government creating and withdrawing opportunities for highly profitable investment. This project asks what the key factors are for rent management to succeed. More details

Research on the Poverty Impact of Market and Enabling Business Environment Programmes in Kenya

To what extent does private sector development work in Kenya contribute to a reduction in poverty and inequality? This review aims to assess the evidence base for DFID Kenya’s Wealth Creation Pillar programming. More details

SMEs, Multinational Value Chains and 'Pro-poor' Policies Review

This review examined a range of donor initiatives that adopted a value chain aproach as part of their policy package for promoting the growth of small and medium enterprises. More details

Success Factors for Lead Firms to Shape Inclusive Procurement

This consultancy examines best practices both operationally and in the literature surrounding business models from the view point of inclusivity of smallholder farmers More details

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IDS Research Report

Value Chains, Donor Interventions and Poverty Reduction: A Review of Donor Practice

IDS Research Report 63 (2010)

Value chain interventions are increasingly popular amongst donors aiming to promote market-oriented growth and poverty reduction. More details

IDS Research Report

Adoption of Open Business Models in the West and Innovation in India’s Software Industry

IDS Research Report 62 (2010)

Over the last three decades, outsourcing has had a big influence on the international division of labour. It is clear that it has been a major reason for the enormous build-up of production capabilities in the developing world, in particular in the export platforms of Asia. More details

IDS Research Summary

Adoption of Open Business Models in the West and Innovation in India's Software Industry

IDS Research Summary of IDS Research Report 62 (2010)

Recent research has shown that segments of the Bangalore software industry have made the difficult transition from production to innovation capability. More details

IDS publications on international development research

Small-scale Farmer Participation in New Agri-Food Supply Chains

Journal of International Development 21.7 (2009)

The Organisational Decomposition of Innovation and Global Distribution of Innovative Activities

International Journal of Technological Innovation, Learning and Development 2.4 (2009)

The starting point for this paper is a fundamental change currently occurring in the way innovation is organised in developed countries: it tended to be centralised at or near headquarters, but is now much more decentralised within the company. Equally if not more significant, innovation activities that used to be carried out in-house by innovating firms themselves are carried out by independent suppliers of knowledge intensive business services or are transferred to key suppliers. More details

IDS publications on international development research

The Possible Dynamic Role of Natural Resource-Based Networks in Latin American Development Strategies

Economic Commission for Latin America and the Caribbean (ECLAC) - SEGIB Project Document (2009)

Also presented at the GLOBELICS Conference in 2010 More details

Inter-firm Relationships in Global Value Chains: Trends in Chain Governance and Their Policy Implications

International Journal of Technological Learning, Innovation and Development 1.3 (2008)

Much of international trade is coordinated by the lead firms of Global Value Chains (GVCs) and regulated through global standards. The way in which this global governance is exercised has a significant impact on the organisation of Small and Medium-sized Enterprises (SME) clusters and their upgrading opportunities. This paper is particularly concerned with the global governance structures themselves – i.e. with GVCs, global standards and their interaction. More details

IDS Working Paper

The Organisational Decomposition of the Innovation Process: What Does it Mean for Global Distribution of Innovation Activities

IDS Working Paper 304 (2008)

The question driving this paper is how this 'organisational decomposition of the innovation process' changes the global distribution of innovation of activities. Does it contribute to their global dispersal to the developing world or does it strengthen the existing concentration? More details

Learning and Earning in Global Garment and Footwear Chains

The European Journal of Development Research 18.4 (2006)

This article explores the power of the global value chain approach in explaining the growth of production capabilities and the distribution of gains. It suggests that the upgrading opportunities of local enterprises are structured by the relationships in global value chains. This is shown clearly for the case of the garment and footwear industry, where advances have been rapid in product and process upgrading but more limited in functional upgrading. With regard to the distribution of gains, the global value chain approach also provides clear hypotheses but the empirical evidence remains weak. More details

IDS publications on international development research

Policy Implications of Trends in Agribusiness Value Chains

European Journal of Development Research 18.4 (2006)
The International Labour Organization (ILO) is devoted to advancing opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity.

Value Chain Analysis for Policy Makers and Practitioners

Are you a policy maker in the Ministry of Industry and Trade, trying to improve the competitiveness of small and medium enterprises? Do you work in a local government agency with a brief to improve the earning opportunities of entrepreneurs and workers? More details

IDS Working Paper

The Struggle to Develop Regional Industry Policy: The Role of the Plastics and Auto Sectors in the Regional Chamber of ABC, São Paulo

IDS Working Paper 154 (2002)

Much of the current policy debate on fostering the industrial upgrading focuses on the importance of local or regional policy networks. The question, which has been neglected in this debate, is whether conducting local or regional industrial policy is possible where local enterprises are part of a global production system. More details

IDS Working Paper

Local Clusters in Global Value Chains: Exploring Dynamic Linkages Between Germany and Pakistan

IDS Working Paper 152 (2002)

Industrial clusters and global value chains command growing interest in regional studies. Yet, there is a paucity of empirical material on how clusters are linked into global value chains, and limited research on ties between clusters in the developed and developing world. More details

Improving nutrition in Tanzania: experiences from food markets

17 Apr 2015
By (incomplete), (incomplete)

BLOG: After the hunger summit

14 Aug 2012
By (incomplete)

BLOG: Is The New Alliance the true alliance?

28 May 2012
By (incomplete)

Is China innovating in renewables?

08 May 2012
By Hubert Schmitz, (incomplete)

When is business ‘inclusive’?

03 May 2012
By Elise Wach