When value chains go south:governance and upgrading of the Kenyan leather sector

In the last three decades, the global economy has witnessed an ambivalent phenomenon of integration through disintegration. Whilst the amount of regional and global trade dramatically increased, vertical specialisation prompted the outsourcing of manufacturing, assembling, and other business functions regionally and globally. The slicing up of value chains and the consequent surge in trade of intermediate goods drew the attention of scholars interested in the economic, social, and environmental consequences of this phenomenon. Yet, most of the literature on value chains has concentrated on the institutional and market linkages between firms in developed economies and delocalised suppliers in the global South. Conversely, less attention has been paid to the rise in South-South trade that accompanied the development of South- South and regional value chains. The following chapters provide new evidence on the opportunities and constraints that participation in value chains across North-South, South-South, and regional trajectories entails for local suppliers in developing countries. This is achieved by means of a mixed-methods approach that combines firm-level export data with over 100 semi-structured interviews across the Kenyan leather sector. On the one hand, results show how North-South value chains are characterised by more profitable and stable relationships between buyers and local suppliers. Nonetheless, whilst defined by higher product and process standards, linkages with developed economies appear to prevent rather than encourage local value addition. On the other hand, South-South value chains are governed by instability and distrust underpinned by pressures to reduce prices and lack of upgrading opportunities. Like the global South, regional value chains are characterised by fierce competition and low profitability. Even so, they often constitute an alternative for small suppliers willing to venture into new products and functions. Particularly, the local and regional markets represent an upgrading platform for innovative firms whose low capital endowments prevent them from accessing premium North-South value chains. In this case, industrial policy and entrepreneurship play a crucial role in enabling smallholders to upgrade in a competitive environment.</p

How Much Should Society Fuel the Greed of Innovators? On the Relations between Appropriability, Opportunities and Rates of Innovation

The paper attempts a critical assessment of both the theory and the empirical evidence on the role of appropriability and in particular of Intellectual Property Right (IPR) as incentives for technological innovation. We start with a critical discussion of the standard justification of the attribution of IPR in terms of "market failures" in knowledge generation. Such an approach we argue misses important features of technological knowledge and also neglects the importance of non-market institutions in the innovation process. Next, we examine the recent changes in the IPR regimes and their influence upon both rates of patenting and underlying rates of innovation. The evidence broadly suggests that, first, IPRs are not the most important device apt to "profit from innovation"; and second, they have at best no impact, or possibly even a negative impact on the underlying rates of innovation. Rather, we argued, technology- and industry-specific patterns of innovation are primarily driven by the opportunities associated with each technological paradigm. Conversely, firm-specific abilities to seize them and "profit from innovation" depend partly on adequacy of the strategic combinations identified by the taxonomy of Teece (1986) and partly on idiosyncratic capabilities embodied in the various firms.Appropriability, Intellectual Property Right, Innovation, Technological opportunities

The structure of problem-solving knowledge and the structure of organisations

This work presents a model of organisational problem solving able to account for the relationships between problem complexity, tasks decentralilzation and problem solving efficiency. Whenever problem solving requires the coordination of a multiplicity of interdependent elements, the varying degrees of decentralization of cognitive and operational tasks shape the solution which can be generated, tested and selected. Suboptimality and path-dependence are shown to be ubiquitous features of organisational problem solving. At the same time, the model allows a precise exploration of the possible trade-offs between decompostion patterns and search efficiency involved in different organisational architectures.-

Appropriability, Patents, and Rates of Innovation in Complex Products Industries

The economic theory of intellectual property rights is based on a rather narrow view of both competition and technological knowledge. We suggest some ways of enriching this framework with a more empirically grounded view of both and, by means of a simulation model, we analyze the impact of different property right regimes on the dynamics of a complex product industry, that is an industry where products are complex multi-component objects and competition takes place mainly through differentiation and component innovation. We show that, as the complexity of the product spaces increases, stronger patent regimes yield lower rates of innovation, lower product quality and lower consumers' welfare. localized ones.patents; appropriability of innovation; complex product industries; industrial dynamics

Knowledge, Competition and the Innovation: Is Stronger IPR Protection Really Needed for More and Better Innovations

The main questions addressed in this Article are thus: given that growth is a highly desirable phenomenon and that it is primarily spurred by technological innovation, how should society solve the problem of favoring a sufficient level of investments in R&D? In particular, is it necessarily true and always desirable that, independent of any other consideration, society should protect innovators from competition and shelter them in a legally protected and enforced monopoly? Is it true that the real source of economic value of new recipes is only found in the blueprints of ideas that those recipes implement? Is it necessarily true that an unavoidable trade-off exists between the growth rate of an economy and its static level of welfare

Appropriability, patents, and rates of innovation in complex products industries

The economic theory of intellectual property rights is based on a rather narrow view of both competition and technological knowledge. We suggest some ways of enriching this framework with a more empirically grounded view of both and, by means of a simulation model, we analyze the impact of different property right regimes on the dynamics of a complex product industry, that is an industry where products are complex multi-component objects and competition takes place mainly through differentiation and component innovation. We show that, as the complexity of the product spaces increases, stronger patent regimes yield lower rates of innovation, lower product quality and lower consumers' welfare