For the last few decades, 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.
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 examined 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 was 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 asked whether and how they affect different upgrading strategies.