Joining Global Aerospace Value Networks: Lessons for Industrial Development Policies

Abstract

Governmental investments on the development of high-tech clusters are among the main policies for socioeconomic development, enabling countries to be part of global value networks. Our objective is to identify which are the strategies of countries that want to join global aerospace value networks, by means of an abductive case research. Countries were divided in three groups (A; B; C) according to their global aerospace exports share. The analytical framework used to identify the strategies has three dimensions: network structure, network governance and network dynamics. Results show different strategies according to the country's global exports share. While for countries at group A (exports above 1%) a strategy focused on the dimension network structure indicated a sustained high-tech sector, countries at group C tend to focus on specialization, taking advantage of shifts in technological paradigms to upgrade their development level. The dimension network governance is mainly related to governmental efforts towards the creation of clusters and associations, promoting specialization and collaborative work. Finally, the dimension network dynamics describes the attraction of foreign companies to qualify the clusters at countries who belong to group C, while countries at group A reinforce their R&D activities. The comparison between countries is helpful for governmental representatives who want to develop strategies towards increasing participation in an industrial global value network and for supply chain managers to help selecting the locations for their operations.

Mapping the structure and dynamics of global high‐tech aerospace trade

“…Under the dominance of these countries, the aerospace sector tends to restructure global operations through a mix of offshoring, near‐shoring and outsourcing to achieve the optimal combination of costs, markets and resources. This allows countries with different industrial development levels to move into the industry chain (Santos et al., 2019; Tate et al., 2014). Although industrialized countries keep high value‐added manufacturing at home, emerging economies focus on relatively low value‐added manufacturing to increase their global share and engage in the value network.…”

Introduction

“…When thinking about the product development cycle for new aircraft, it is important to note that the process may take up to 15 years [24] and that reduced volumes are manufactured when compared to automotive or electronics production. By way of illustration, currently, commercial aviation and cargo fleets use about 20,000 large aircraft worldwide [13].…”