Deepening or delinking? Innovative capacity and global value chain participation in the ICT sectors

Innovation trajectories in global value chains can take highly differentiated pathways. Firms and other organisations operating in a sector in a given country may gain or lose innovative capacity over time compared to their peers in other countries. In this paper we address the question: do stylised trajectories emerge from the analysis of countries' relative innovative capacity and global value chain participation? We draw explorative insights from a cluster analysis of 45 countries on the subsectors of the information and communication technology industry: hardware and software. Our analysis uncovers remarkable differences across sectors and countries. We identify different trajectories and discuss the sub-sectoral specificities which contribute to explaining these differences. The association between the strengthening of innovative capacity and deeper insertion in global value chains applies to only a handful of countries and only in the software subsector. These findings raise questions for future research on innovation in global value chains.