Pathways for capacity building in heterogeneous value chains: Evidence from the case of IT-enabled services in South Africa

Charlotte Keijzer () and Michiko Iizuka ()
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Charlotte Keijzer: UNU-MERIT, and Maastricht University

No 2017-012, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: The global value chain (GVC) approach has stressed that inter-firm linkages within GVCs can create new opportunities for capabilities formation in developing countries. However, little is known about how firms from developing countries engage and benefit from participation in GVCs of services. Using data collected from 44 interviews of IT-enabled service providers in South Africa, this paper explores how service providers in developing countries build service delivery competence critical to their performance, focusing specifically on the development of human resource management capabilities and domain expertise. Results show that participation in GVCs triggers learning processes for firms that are crucial in building service delivery competence, especially in the absence of a strong national system of innovation. Nevertheless, interactions between actors and institutions within the country, as well as internal firm resources are critical to acquire and adapt foreign-sourced knowledge to the local context. Finally, we find local and regional value chains of IT-enabled services offer additional learning avenues for capability formation and potential pathways into GVCs for domestic firms.

Keywords: Global value chains; regional value chains; system of innovation; human resource development; organisational learning; IT-enabled services; South Africa (search for similar items in EconPapers)
JEL-codes: D83 O14 O15 O33 O38 (search for similar items in EconPapers)
Date: 2017-02-17
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