Abstract
This article contributes to the growing literature on technological upgrading along global value chains, by focusing on the adoption of automation and digital technologies at different functional stages of the automotive value chain. It explores the constant tension that firms in emerging economies face between linking up to international trade and ensuring the upgrading of indigenous firms, which depends on the relationship between lead international firms’ operations and capabilities at the local level. Drawing on extensive qualitative research in South Africa, including 39 interviews and observations at the shopfloor level, this paper examines the determinants for automation and digital technologies adoption. The finding extends existing knowledge of technological upgrading along global value chains, by examining both final assemblers and lower-tier suppliers. Four production specific drivers are identified: volume, quality, material-led adoption, and ergonomics. This paper suggests policymakers should consider sector heterogeneity and specific sector-technology combinations when designing policies to sustain digitalization and production upgrade.
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