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Technological Capabilities, Upgrading, and Value Capture in Global Value Chains: Local Apparel and Floriculture Firms in Sub-Saharan Africa

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  • Lindsay Whitfield
  • Cornelia Staritz
  • Ayelech T. Melese
  • Sameer Azizi

Abstract

Many local firms in sub-Saharan African countries are failing to enter and upgrade in new manufacturing and agribusiness export sectors. This article argues that we need to look more closely at the costly, risky, and uncertain firm-level processes of building capabilities in order to understand this challenge. However, local firm agency is constrained and has to be situated in asymmetric structures that are determined by transnational interfirm relations in global value chains (GVCs) as well as the country and region in which local firms are embedded. The article presents a new framework for researching how firms build capabilities in GVCs, and demonstrates how it can be applied using the cases of apparel and floriculture export sectors in Ethiopia, Kenya, and Madagascar. The cases show that firms build specific capabilities linked to export strategies, leading to uneven capability-building, specific upgrading paths, and value capture trajectories. Variations in local firms’ export strategies and success with those strategies are explained by differences in the financial capital, tacit knowledge, and social networks that they can leverage in building capabilities. The nature and extent of these intrafirm resources, especially in the early period of export industry development, are shaped by shared networks between local and foreign supplier firms, regional proximity to existing supplier countries, strategic interests of global buyers, and government industrial policy.

Suggested Citation

  • Lindsay Whitfield & Cornelia Staritz & Ayelech T. Melese & Sameer Azizi, 2020. "Technological Capabilities, Upgrading, and Value Capture in Global Value Chains: Local Apparel and Floriculture Firms in Sub-Saharan Africa," Economic Geography, Taylor & Francis Journals, vol. 96(3), pages 195-218, July.
    • Handle: RePEc:taf:recgxx:v:96:y:2020:i:3:p:195-218
    DOI: 10.1080/00130095.2020.1748497
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    Cited by:

    1. Pasquali, Giovanni & Krishnan, Aarti & Alford, Matthew, 2021. "Multichain strategies and economic upgrading in global value chains: Evidence from Kenyan horticulture," World Development, Elsevier, vol. 146(C).
    2. Diksha Sinha & Roopali Sharma, 2024. "Future Research Prospects of Floriculture Industry from Management Perspective: A Bibliometric Analysis Using the SPAR-4-SLR Approach," South Asian Journal of Business and Management Cases, , vol. 13(1), pages 36-53, April.
    3. Linda Calabrese & Neil Balchin, 2022. "Foreign Investment and Upgrading in the Garment Sector in Africa and Asia," Global Policy, London School of Economics and Political Science, vol. 13(S1), pages 34-44, April.
    4. Ulrich Elmer Hansen & Padmasai Lakshmi Bhamidipati & Mathilde Brix Pedersen & Ivan Nygaard & Hope Nyambura Njoroge, 2023. "Linking business strategies with upgrading pathways in global value chains: Insights from the Kenyan solar market," Development Policy Review, Overseas Development Institute, vol. 41(2), March.
    5. Wang, Yue & Zhang, Zhenke & Xu, Minghui, 2023. "Evolution pattern of African countries' oil trade under the changing in the global oil market," Energy, Elsevier, vol. 284(C).
    6. Stephan Manning & Cristiano Richter, 2023. "Upgrading against the odds: How peripheral regions can attract global lead firms," Journal of International Business Policy, Palgrave Macmillan, vol. 6(1), pages 1-23, March.
    7. Manning, Stephan, 2022. "From mainstream to niche: How value regimes shift in emerging economy upgrading," Research Policy, Elsevier, vol. 51(6).

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