This article examines a heretofore underexplored category of automotive‐producing nation known as the semi‐periphery. These nations are neither “core” automotive nations whose power derives from hosting headquarters of major automakers, nor are they low‐cost members of the automotive “integrated periphery” like Mexico or countries in Central and Eastern Europe or North Africa. Through a case study of one semi‐periphery country, Canada, the paper assesses automotive semi‐periphery countries' capacity to transition to knowledge‐based activities more typically associated with “core” automotive nations. In so doing, it raises implications for other “semi‐periphery” automotive‐producing nations as well as those currently categorized as “core” or “integrated periphery.”

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The practice of industrial policy in economically advanced jurisdictions is examined, focusing on the post 2000 period. Building from literature and cases from the Canadian automotive industry, the paper demonstrates how actors engaged in the application of industrial policy in economically advanced, high labour cost jurisdictions have responded to shifting pressures and opportunities. Explanation is provided for how those changes have caused objectives to broaden from a focus on manufacturing to industrial R&D. While vertical industrial policy tools endure, the transition has prompted increased emphasis on horizontal industrial policy instruments. The cases also demonstrate that a shift has occurred from externally-generated projects towards internal, organic forms of development, a change that has elevated the primacy of internal, corporate champions in firm level investment attraction.

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New perspective is provided on a critical period in the development of the Canadian automotive industry. In the 1980s, five foreign manufacturers built new vehicle assembly operations in Canada, effectively transforming that country’s automotive industry. Drawing from a combination of interviews with key actors and a review of archives, this case study makes several contributions. First, gaps are closed in the economic history of one of Canada’s most important industries. Second, the case demonstrates the capacity of using historical perspective to extend an existing theory to a new area of inquiry. In this case, Multiple Streams Theory is employed to explain the process of inward FDI attraction. This includes a description of the role of policy entrepreneurs and their capacity to create and exploit opportunities. Third, the case demonstrates the continuing relevance of integrating historical perspective to contemporary issues in business, management, and public policy.

For economically advanced locations, a primary response to deindustrialization has been to emphasize higher value-added activities, the target frequently being research and development (R&D). R&D tends to occur in locations proximate to corporate headquarters in general and the headquarters of global lead firms in particular. This pattern is especially evident in the automotive industry. Thus, for countries or regions lacking a targeted industry’s global lead firm, generating R&D is problematic. In the automotive industry, the introduction of frontier technologies—such as those supporting autonomous vehicles (AVs)—may reveal new patterns of R&D development, a consequence of firms engaging with innovation ecosystems disconnected from the traditional automotive industry and its headquarters-proximate geographic core or cores. This article explores these matters via a case study of Canada’s efforts to build an AV R&D profile. Canada does not host an automaker’s headquarters, but it does possess attributes that suggest it is well equipped to conduct such work. After constructing and analyzing a global database of patents related to AVs, this article demonstrates that Canada has contributed R&D focused on AVs at a rate above that which it has reached for automotive R&D overall. It also establishes that globally, even though AV-related R&D has emerged from non-traditional automotive locations, the preponderance of AV-related R&D is converging in core automotive locations: proximate to automakers’ global headquarters.

Restructuring of the automotive industry in the post‐2000 period has led to the emergence of three strata of automotive manufacturing jurisdictions. Core automotive countries host the headquarters of global automakers. They retain most research and development (R&D) and high levels of production. By contrast, integrated peripheries offer low‐cost labour. While increasing levels of vehicle production have gravitated there, they have been unable to attract mandates for knowledge‐intensive portions of the automotive value chain. Finally, semi‐peripheries have neither a home‐grown automaker nor low‐cost labour. Consequently, they have been unable to gain mandates for R&D and struggle to maintain production. Thus, policy makers in non‐core countries consider a range of tools to either retain their position or ‘graduate’ from one category to another. Recently, the demand for battery electric vehicles (BEVs) has given rise to new vehicle manufacturers. Turkey is attempting to develop a BEV automaker and jump from an automotive integrated periphery country to one having a key attribute of an automotive core: a home‐grown automaker. This article reveals and discusses Turkey's generous incentives and assesses the challenges the Turkish BEV entrant will confront, as well as its potential to generate wider economic benefits. The authors also consider the application the Turkey case study has for our understanding of power and upgrading in automotive global value chains.

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