Clusters in the Global Economy

The Interaction of Global and Local Governance: Implications for Industrial Upgrading

For over a decade, IDS has been a leader in research on clusters in developing countries. Initially, during the 1990s, this research was driven by the hypothesis that competitiveness depends on the quality of relationships in the clusters. The results of this work can be found on our Clusters and Industrial Development webpage.

More recent research has concentrated on the interaction of local and global relationships. This work is driven by the following question: what is the scope for local upgrading strategies where clusters are inserted in global value chains. For the results of this work see below.

While the debate on industrial clusters and local innovation systems is mainly concerned with local linkages, this project examines the global linkages and how they affect local relationships. Examining clusters through this new lens transforms the understanding of local upgrading strategies and options.

A key question of the project is who sets the parameters for local producers. These producers do not just export into an anonymous global market; often they feed into value chains which are governed by powerful global players. They set and/or enforce the parameters under which other enterprises in the chain operate. Other parameters are set from outside the chain, notably the new quality and labour standards. In this project we ask whether and how they affect different upgrading strategies.

Key contact

Photo of Hubert Schmitz from Green Transformations Cluster


More details
Photo of Lizbeth Navas-Aleman


More details

Clusters and Chains: How Interfirm Organization Influences Industrial Upgrading

In 'Systems of Innovation and Development' (2003)
Cassiolato, J., Lastres, H. and Maciel, M.

Local Implementation of Quality, Labour and Environmental Standards: Opportunities for Upgrading in the Footwear Industry

SEED Working Paper Series on Upgrading in Small Enterprise Clusters and Global Value Chain 45 (2003)
Navas-Alemán, L. and Bazan, L.

Making Sense of Global Standards

INEF Report 58 (2002)
Nadvi, K. and Wältring, F.

Governance in Global Value Chains

IDS Bulletin 32.3 (2001)
Humphrey, J. and Schmitz, H.

Governance and Upgrading: Linking Industrial Cluster and Global Value Chain Research

IDS Working Paper 120 (2000)
Humphrey, J. and Schmitz, H.

Partner organisations

+49 (0)203-379-4420

Partner researchers

Project Dates:
January 1999 - July 2002
Project Status:
Volkswagen Foundation
Research Themes / Programmes:
Innovation and value chains