National innovation policies for technology upgrading through GVCs: A cross-country comparison

Abstract

This paper considers how innovation policy mixes are designed for increasing a country's participation in global value chains (GVCs) and accelerating industrial and technological upgrading. A benchmarking concept compares science, technology and innovation (STI) policies across countries taking into account country absorptive capacities, performance in GVCs and the way these policies are embedded in the national STI policy context. Data cover selected OECD and emerging economies drawing on the EC/OECD STI Policy database. An exploratory text-as-data approach is taken. National policy mixes for GVC integration and technology upgrading seem to be developed on the basis of prior positioning in GVCs. Policy mixes are polymorphs in so far as they combine different instruments across different policy domains with different functions according to national structural features and comparative advantages. While essential, especially to technology upgrading, industrial and cluster policies are not the only channels of policy intervention. Foreign direct investment (FDI)-related policies and initiatives in support of the internationalisation of firms and universities also appear to be key. Financial instruments remain the most popular policy tools for supporting integration into GVCs and countries combine a broad range of funding mechanisms with international investment promotion activities and the deployment of networking and world-class research facilities.