Technological Capabilities, Upgrading, and Value Capture in Global Value Chains: Local Apparel and Floriculture Firms in Sub-Saharan Africa

Lindsay Whitfield*, Cornelia Staritz*, Ayelech Tiruwha Melese*, Sameer Ahmad Azizi*

*Corresponding author

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Many local firms in sub-Saharan African countries are failing to enter and upgrade in new manufacturing and agribusiness export sectors. This article argues that we need to look more closely at the costly, risky, and uncertain firm-level processes of building capabilities in order to understand this challenge. However, local firm agency is constrained and has to be situated in asymmetric structures that are determined by transnational interfirm relations in global value chains (GVCs) as well as the country and region in which local firms are embedded. The article presents a new framework for researching how firms build capabilities in GVCs, and demonstrates how it can be applied using the cases of apparel and floriculture export sectors in Ethiopia, Kenya, and Madagascar. The cases show that firms build specific capabilities linked to export strategies, leading to uneven capability-building, specific upgrading paths, and value capture trajectories. Variations in local firms’ export strategies and success with those strategies are explained by differences in the financial capital, tacit knowledge, and social networks that they can leverage in building capabilities. The nature and extent of these intrafirm resources, especially in the early period of export industry development, are shaped by shared networks between local and foreign supplier firms, regional proximity to existing supplier countries, strategic interests of global buyers, and government industrial policy.
Original languageEnglish
JournalEconomic Geography
Volume96
Issue number3
Pages (from-to)195-218
Number of pages24
ISSN0013-0095
DOIs
Publication statusPublished - 2020

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