Production and Innovation Networks, Global

The emergence of global corporate networks that integrate dispersed production, engineering, product development, and research activities across geographic borders poses new challenges and opportunities for global studies. The challenge is to trace and decipher the increasingly complex forms of these networks that have expanded well beyond the traditional centers of the global economy in the United States, the European Union, and Japan. Much of the action now is in Asia, especially in China and India. But the list of new locations includes both large countries like Russia, Brazil, Argentina, Mexico, South Africa, and (possibly) Vietnam, and many smaller countries, like Korea, Taiwan, Malaysia, Singapore, Israel, the Gulf states, Poland, the Czech Republic, Hungary, and the Baltic states.

An equally important challenge for global studies is to identify the drivers and impacts of these global networks that are pushing interdependence among national economies to historically unprecedented levels. Global corporations are the main drivers, as they seek to increase return on investment and penetrate high-growth emerging markets. Although governments until recently have been only marginal players, the global economic recession has forced them to redefine and increase their involvement.

The study of global production and innovation networks (GPN and GIN) also provides a powerful tool for sharpening the research agenda of global studies and for developing new policy responses. As global networks encompass production as well as research and development (R&D), it is no longer sufficient to focus political debates about globalization on offshore outsourcing of manufacturing and services.

Offshoring of R&D through GIN gives rise to a new geography of knowledge, which however is not a flatter world. Although the United States, Europe, and Japan retain their dominance in science and technology, new yet very diverse and intensely competing locations for innovation in emerging economies have entered the stage. Compared with the established leaders, the new players have different needs and institutions, business models, and capability sets. Hence, they will seek to adjust the rules of the game.

Some of them, especially China, are strong enough to challenge the existing rules of the game, requiring changes in the governance of international trade, investment, and finance. The study of [Page 1393]GPN and GIN helps to guide necessary adjustments in national policies, economic governance, and institutions, both in incumbent leaders and in emerging economies.

This entry first looks first at the defining characteristics of GPN and how they developed over time, then documents the rapid expansion of GIN and their extension into Asia, and in the final section presents the findings on impacts.