Working Paper

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

Published on 1 January 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.

This paper seeks to fill these gaps. Using the case of the global surgical instrument industry, it analyses connections and differences between the industry’s leading production sites, namely small firm clusters in Tuttlingen, Germany and in Sialkot, Pakistan. In terms of knowledge, the two clusters mark the high and low technology ends of the industry. Yet, in terms of production, there are significant links between German and Pakistani firms. Moreover, quality upgrading, low-cost competition, and developments in medical technology raise new challenges for firms in both Pakistan and Germany. The paper draws on evidence from both clusters to assess the upgrading responses to these challenges. Cluster and value chain approaches are used to explore local and external linkages. The distinction between knowledge and production systems helps illustrate differentiation within each cluster, and underlines their diverging trajectories.

Publication details

published by
Nadvi, K. and Halder, G.
IDS Working Paper, issue 152
1 85864 420 8


About this publication

Germany Pakistan

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