Toward a More Embedded Production System? Automotive Supply Networks and Localized Capabilities in Poland

Abstract

ABSTRACTThe article addresses the embeddedness of automotive production in Poland in terms of supply networks. A comprehensive analysis of more than 550 suppliers, supported by company interviews, shows that foreign‐owned producers become embedded in Poland in the automotive supplier networks they have largely created themselves. Numerous local suppliers gain access to export markets and become integrated in a Europe‐wide production system. This trend has been accompanied by significant upgrading of foreign affiliates and domestic firms in terms of product quality, cost efficiency, adaptability, and fast response, but far less in nonproduction competences such as R&D. It is argued that the competences of automotive suppliers in Poland are built upon the localized capabilities, which are a product of the dynamic interplay between the activity of foreign firms and the changing local environment comprising various stakeholders. The localized capabilities constitute elements of a company's sunk costs and are embedding automotive producers in Poland. At the same time, the dependence on decisions and innovations from abroad and the limited development of local design and brands may constrain the future role of suppliers from the semiperipheral economy of Poland.