Researchers gather to improve understanding of how national economies can escape poverty and middle income traps

On May 22nd 2015, scholars gathered at AAU in Copenhagen to discuss the development of a new research program. Using Globelics as a platform, they aim to uncover how two seemingly opposing approaches, Global Value Chains and National Innovation Systems, can in fact complement one other.

The Global Value Chain (GVC) approach examines the full and globally spanning range of activities that are required to bring a product from its original conception to the hands of the consumer. The National Innovation System (NIS) approach, on the other hand, focuses on local interactive learning: put simply, the diffusion of new technologies within a nation state, and how this reflects that nation’s innovative learning capacity.

Two seemingly contradictory approaches, one focused on the global and another on the local, have in fact many aspects in common. Including, but not limited to, the importance given to networking and organized markets as a form the governance.

The ultimate goal for the researchers is to find a way for countries stuck in poverty and middle income traps to combine domestic capacity building with participation in international economic transactions. By clarifying conceptual issues and looking at both common ground and conceptual differences, the intention is to understand better the crucial link between innovation and development.

One fundamental issue to be addressed is the relationship between trade and development – asking the big question, under what circumstances do developing countries benefit from domestic firms’ participation in global value chains? By comparing the experiences of trade and foreign direct investment in countries in Asia, Africa and Latin America, the hope is to uncover under what circumstances the national innovation system contributes to economic and social upgrading in domestic firms participating in global value chains. And, vice versa, under what circumstances does the participation contribute to strengthening the national innovation system.

In line with the core Globelics agenda, this research should also aim to understand global low carbon development and sustainable development, the process of trade and innovation and how it can affect inclusive development, and whether value chains directly built upon natural resource commodities require special strategies compared to those rooted in manufacturing.

By delving into these issues, synthesizing common theoretical grounds from NIS and GVC and comparing patterns and strategies for development across the globe this could open the door for national economies to escape poverty and middle income traps.

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