Global Supply Chains as Drivers of Innovation in China

Murphree, M. and Breznitz, D. (2020) "Global Supply Chains as Drivers of Innovation in China." Chapter 6.2 in Xiaolan Fu, Jin Chen and Bruce McKern (Eds) Oxford Handbook of China Innovation. Oxford University Press.

31 Pages Posted: 9 Feb 2020

See all articles by Michael Murphree

Michael Murphree

University of South Carolina

Dan Breznitz

University of Toronto - Munk School of Global Affairs and Public Policy

Date Written: January 15, 2020

Abstract

China’s manufacturing and innovation capabilities are directly related. Availability of complementary resources in rapid prototyping, test production and components and the ability to deploy innovations at scale increasingly leads high-technology firms, including startups, to consider China as a developmental base across sectors from big data, to cloud computing, smart grid, renewable energy and alternative energy vehicles. Entry into global value chains (GVC) has led to vast transfers of knowledge, creating human resource capabilities which continuously facilitate the upgrading of Chinese firms. China’s most advanced industries were all those characterized by active participation in GVCs. China’s insertion into GVCs has differed significantly from the experiences of other emerging economies, arguably affording China greater innovation benefits. This is directly related to China’s institutional environment of “structured uncertainty.” Structured uncertainty shaped the pattern and impact of entry into GVCs, dictating which regions entered GVCs, when, and how with long-term knowledge transfer effects.

Keywords: Global Value Chains, Structured Uncertainty, Innovation Capabilities, Upgrading, China

Suggested Citation

Murphree, Michael and Breznitz, Dan, Global Supply Chains as Drivers of Innovation in China (January 15, 2020). Murphree, M. and Breznitz, D. (2020) "Global Supply Chains as Drivers of Innovation in China." Chapter 6.2 in Xiaolan Fu, Jin Chen and Bruce McKern (Eds) Oxford Handbook of China Innovation. Oxford University Press., Available at SSRN: https://ssrn.com/abstract=3520159 or http://dx.doi.org/10.2139/ssrn.3520159

Michael Murphree (Contact Author)

University of South Carolina ( email )

United States

Dan Breznitz

University of Toronto - Munk School of Global Affairs and Public Policy ( email )

Toronto, Ontario
Canada

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