Timothy Sturgeon

Massachusetts Institute of Technology | MIT · Industrial Performance Center

In this report, I characterize global value chains (GVCs) in the automotive industry, examine recent trends in vehicle sales, production, and trade on a global level and in Latin America, and discuss how Latin American countries might upgrade their positions in the industry. I also consider several emerging technology trends, since I can say with s...

It is generally accepted that a “global chain” – orchestrated by a lead firm – is the relevant unit of analysis for research on contemporary global industries. However, our research shows that value chains (GVCs) and supply chains (GSCs) are only segments of the massively complex “ecosystem of ecosystems” that produce mobile phone handsets. To defi...

The world economy is undergoing a period of structural and technological transformation, driven by the increasing digitalization of economic and social life. Digitalization is being experienced differentially across the globe, reflecting the different opportunities it offers as well as the particular challenges countries face in digitalizing their...

As the geographic fragmentation and of industries has increased and cross-border coordination has improved, efforts to develop better measures and indicators of Global Value Chains (GVC) have intensified. Producers of official and semi-official statistics and private market research information have gradually improved data resources available for G...

It is broadly recognized that GVCs have come to exert a major impact in developing countries. GVC scholarship has mainly focused on how power and governance are exerted in cross-border production networks, on detailing the specific characteristics and effects of GVCs across industries and countries, and on the identifying the possibilities and pres...

This book proposes a new way to approach comparative international development by focusing on time and timing in economic and social development. The UK industrialized over two centuries, and then started to de-industrialize in the late 1960s. Today, the most rapid developers experience aspects of industrialization and de-industrialization simultan...

The introduction presents the two key features of compressed development, ‘compression’ and ‘eras’ consisting of geopolitical, institutional, and technological dimensions, as an argument for why time and timing matter for economic and social development. Recent ‘successful’ developers grow more quickly than those of the past, but face new challenge...

Social policy has become a new frontier of compression. Compressed developers face simultaneous challenges which early and late developers confronted sequentially. In education this means constructing a higher education and research system at virtually the same time as completing the task of universalizing basic education. Double challenges are fur...

Is the developmental state dead, superseded by the liberal or competition state, a servant of markets, or has it evolved to fit changing geopolitical, economic, and technological circumstances? In affirming the latter, we first consider the national level, then extend our scope to consider decentralization, local developmentalism, and multilevel go...

The onset of the Covid-19 pandemic has been traced to early December 2019, just as we were submitting our completed manuscript for publication. We were tempted to comb through the manuscript for ways to address what has rapidly emerged as an unprecedented global public health crisis, economic crisis, and more. But, we decided to leave the text be f...

China and Japan share some historical affinities, and they faced similar challenges of foreign threats and unequal treaties in the nineteenth century. Their subsequent paths were very different, however. As a late developer, Japan experienced industrialization in two movements, the more recent being the postwar period under the strong influence of...

Compressed-development influences increasingly flow from developing to developed countries. Reversing our lens to look at the United States and Japan, we observe that the technological and organizational changes that have spurred compressed development in recent developers are also responsible for changes in industry structure, rising inequality, a...

Chapter 1 develops the concept of time compression in economic development and highlights how recent developers are experiencing simultaneity in processes which previously unfolded sequentially over extended periods of time, including industrialization and deindustrialization. Time compression has always been a feature of late development, but the...

Chapter 5 explores the ways in which less-developed countries experience the era-related effects of compressed development and try to cope with them. Chapter 4 compared late-developer Japan and compressed-developer China, but countries with poor or mixed records of economic development also face the opportunities and constraints of compression, and...

Chapter 2 introduces the concept of development eras with the first of our two the co-evolutionary dyads, states and markets, and their Polanyian double movements. It both builds on and departs from Gerschenkron’s late-development thesis. Developing countries innovate institutionally, but they are influenced by the geopolitics, economic systems, an...

Employment and skills are at the heart of economic development and the ‘middle-income trap’. Chapter 6 charts the evolution of ‘standard’ employment, and an expectation that the informal sector would disappear with industrialization. However, not only does the informal sector and informal employment now persist, but ‘nonstandard’ employment has bee...

Chapter 3 introduces a second dyadic pair of era influences: organizations and technology. Building on Bodrožić and Adler’s ‘The Evolution of Management Models: A Neo- Schumpeterian Theory’ (2017), the chapter traces the evolution of technology and business models over time, along with their spatial organization. The interplay between organizations...

Abstract Economic globalization has proven resistant to detailed quantification and empirical characterization. In this paper, we address a small part of this data gap using novel classifications for final and intermediate goods trade, overall; for “customized” and “generic” intermediate goods; and in three industries oft-cited as being at the fore...

Research Summary Although computerization has been enabling changes in the structure and economic geography of industries for decades, recent public discourse has become focused on a set of “new” advanced digital technologies and technology applications that appear poised to dramatically reduce demand for routine tasks and transform the organizatio...

This paper uses the case of China’s mobile telecom industry to illustrate the challenges of pursuing national industrial policy objectives in the context of a highly dynamic and interconnected global industry. The Chinese state deployed a full arsenal of industrial policy tools in its effort to develop a Chinese modem telecom standard (TD-SCDMA) an...

Power has been a foundational concept in global value chain (GVC) research. Yet, in most GVC scholarship, power is not explicitly defined and is applied as a unitary concept, rather than as having multiple dimensions. Clarifying the concept of power has become particularly urgent in recent years as GVC research has proliferated beyond dyads of tran...

The world economy has changed in significant ways during the past several decades, especially in the areas of international trade and industrial organization. Two of the most important new features of the contemporary economy are the globalization of production and trade, which have fueled the growth of industrial capabilities in a wide range of de...

Power' has been a foundational concept in examining global value chains and production networks for understanding patterns and dynamics in the global political economy. Yet, in most GVC scholarship, power is not explicitly defined and is applied as a unitary concept, rather than as having multiple dimensions. Clarifying the concept of power has bec...

Growth in U.S. manufacturing’s real value-added has exceeded that of aggregate GDP, except during recessions, leading many to conclude that the sector is healthy and that the 30 percent decline in manufacturing employment since 2000 is largely the consequence of automation. The robust growth in real manufacturing GDP, however, is driven by one indu...

What is the role of Brazilian firms in global production networks? How is Brazil inserted in global value chains (GVCs)? What economic policies are most appropriate for upgrading Brazilian firms in GVCs? What are the main challenges and opportunities facing Brazil as it tries to improve its position in the global economy? This book addresses these...

This report was commissioned by Brazil’s umbrella industry association, the Confederação Nacional da Indústria (CNI). Its purpose is to investigate the incorporation of Brazil into global value chains (GVCs), in general and through three industry case studies. The research focuses on Brazil’s current role and future prospects in three industries th...

In this paper, we apply global value chain (GVC) analysis to recent trends in the global automotive industry. We focus on how the recent economic crisis has accelerated pre-crisis trends towards greater importance of the industry in the developing world. The regional structure of production in the industry has largely confined the impact of the cri...

In this paper, we apply global value chain (GVC) analysis to study recent trends in the global electronic hardware industry and their implications for upgrading opportunities for firms from developing countries. We identify three key firm level actors -- lead firms, contract manufacturers, and platform leaders. Company, cluster, and country case st...

In this chapter, Timothy Sturgeon, John Humphrey, and Gary Gereffi analyze the co-evolutionary character of market making, in which the initial trials with global sourcing in the 1970s and 1980s by a few retailers helped spur the development of an increasingly competent group of contract manufacturers mainly located in East Asia. These contractors...

The research collected in this volume represents years of challenging fieldwork and careful documentation on the part of the authors. Instead of making armchair assumptions about causes and outcomes of development and technological learning based on the thin gruel provided by official statistics, the authors have spent many months in the field, vis...

This paper uses new data to examine how workers’ perceptions of the impact of trade on jobs like theirs are related to economic variables representing their career paths, job characteristics, and local labor market conditions. We find that only 17% of workers think trade creates jobs. And even fewer workers (4% to 7%) in any industry think trade ha...

In this paper we argue that the path of economic development for would-be developers has changed fundamentally since the 1980s. Focusing on East Asia, and taking a broad perspective that spans the economic and social dimensions of development, we contend that the path charted by the “late development” model has become all but impassible. The path i...

This paper considers the prospects for Mexico’s automotive industry as it has evolved, especially since the signing of the North American Free Trade Agreement (NAFTA) in 1994, in the context of these nested and highly dynamic global and regional value chains. We find that the fate of an industry in a small, regionally embedded country like Mexico i...

This paper presents evidence of the importance of electronics global value chains (GVCs) in the global economy, and discusses the effects of the recent economic crisis on the industry. The analysis focuses on how information is exchanged and introduces the concept of"value chain modularity."The authors identify three key firm level actors -- lead f...

This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the S...

This article contributes to an assessment of the scholarly work of Sanjaya Lall, especially as it relates to improved measures of industrial upgrading and technological learning. We argue for the collection of new statistics, in addition to reworking and linking existing data sets. Changes in the global economy, especially the rise of global value...

This paper deals with the North American automotive value chain and analyses the prospects for Canadian automotive sector upgrading. The size and importance of the automotive industry in Canada's Ontario Province is a legacy of its historic ties to the 'Big 3' US automakers and its proximity to the traditional heartland of the US industry in Michig...

This paper lays out the main features of the global automotive industry and identifies several important trends. A boom in developing country sales and production has not yet overshadowed the importance of existing markets in developed regions. Regional integration is very strong at an operational level, yet the industry has recently developed a se...

This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the S...

This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the S...

The concept of Global Value Chains (GVCs) provides a pragmatic and parsimonious framework as we seek answers to questions about the dynamic organisation of global industries. In this paper, I discuss the evolution of GVC, the framework, especially the motivations for supplementing the 'buyer-driven' and 'producer-driven' modes of Global Commodity C...

The failure of Japanese electronics firms to participate fully in the Internet-fueled growth of the global electronics industry during the late 1990s triggered a period of questioning among top executives. This article examines Japanese managerial responses to the organizational model "value chain modularity," which was deployed by the US electroni...

This chapter examines modular production/manufacturing (as well as emulation), which pose a direct challenge to a host of the most cherished strategies of Japanese electronics firms, including employment protection. Contradictory pressures to respond to the modularization challenge on the one hand, and maintain cherished strategies on the other, le...

This article builds a theoretical framework to help explain governance patterns in global value chains. It draws on three streams of literature – transaction costs economics, production networks, and technological capability and firm-level learning – to identify three variables that play a large role in determining how global value chains are gover...

In this paper we explore a case where increased strategic outsourcing by groups of lead firms has, over time, led to the rise of a shared supplier network, one that can be accessed by the industry as a whole. Our approach postulates an industry-wide virtuous cycle between lead firm strategic outsourcing and the development of supplier competencies....

Is the geographic trajectory of capitalism toward spatial clustering or dispersal? Recent theoretical work in the stream of 'relational' economic geography includes several dynamic elements that increase the importance of spatial clustering over time. This paper develops the concept of 'modular production networks' to show that spatial clustering a...

Program Summary: One of the key drivers of change in the automotive industry can be summed up by the word "globalization." Globalization is driving industry consolidation, the expanding role of suppliers, underbody commonalization, product diversification, and efforts to reduce minimum scale economies in final assembly plants. Automakers, along wit...

This paper is based on research from an in-progress project on the effect of globalization on competition and jobs in the automotive industry.3 Its purpose is to gain a clearer picture of the emerging economic geography of automobile production. The project has found that automakers and their Tier 1suppliers are aggressively internationalizing thei...

This paper uses the case of contract manufacturing in the electronics industry to illustrate an emergent American model of industrial organization, the modular production network. Lead firms in the modular production network concentrate on the creation, penetration and defense of markets for end products--and increasingly the provision of services...

Summaries This article is intended to contribute to the process of building a set of tools that will help advance the debate on the shape and trajectory of global economic integration. The article uses a ‘Value-chain’ approach to construct a set of conceptual terms and concepts intended to better specify the concrete actors in the global economy as...

Globalisation has become a catchword for the international economy at the beginning of the twenty-first century. The increasing importance of export-oriented industrialisation has made integration into the global economy virtually synonymous with development for a number of nations. However, there is an acute awareness that the gains from globalisa...

This article is intended to contribute to the process of building a set of tools that will help advance the debate on the shape and trajectory of global economic integration. The article uses a 'value-chain' approach to construct a set of conceptual terms and concepts intended to better specify the concrete actors in the global economy as well as t...

Abstract This paper develops a co-evolutionary model at the industry level by highlighting the interplay between,increased strategic outsourcing and the rise of shared supplier networks. To do so we explore a case where increased strategic outsourcing by groupsof lead firms has, over time, led to the rise of a sharedsupplier network, one that can b...

Evidence from the electronics industry suggests that a new American model of industry organization is emerging in the 1990s. American electronics firms are outsourcing an increasing share of their production. As this practice grows, manufacturing capacity is building up in turnkey production networks that consist of specialized and highly capable m...

This paper uses the case of contract manufacturing in the electronics industry to illustrate an emergent American model of industrial organization, the modular production network. Lead firms in the modular production network concentrate on the creation, penetration and defense of markets for end products-and increasingly the provision of services t...

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