The importance of being a capable supplier: Italian industrial firms in global value chains

Abstract

This article argues that joining global value chains may be decisive for supplier firms in developed countries by providing incentives and opportunities to upgrade their capabilities to export and innovate. We describe an investigation conducted on a sample of Italian manufacturing firms, drawn from a database spanning 1998-2006 that compares labour productivity and total factor productivity between supplier and final firms at the same level of demonstrated ability (measured in terms of exporting and innovating). Findings indicate that 'traditional' supplier firms are less productive than final firms; as the ability of supplier firms increases, their productivity shortfall decreases to the extent that for those able to both export and innovate, there is no statistically significant difference in productivity between supplier and final firms.

Supply chains and the internationalization of small firms

“…The related evidence suggests that firms find different ways of internationalizing, by exploiting their specialization, by being involved in importing activities, and by joining global supply chains (Castellani et al 2010;Baldwin and Lopez-Gonzalez 2014). An active involvement in supply chains is likely to enhance efficiency, by allowing firms to specialize in functions which suit their capacities better and to upgrade in a number of different ways, including through exports and innovation (Humphrey and Schmitz 2002;Gereffi 1999;Agostino et al 2014;OECD 2008;Giunta et al 2012). Furthermore, involvement in supply chains can be seen as a rational choice since it potentially reduces agency and transaction costs, and, through formal and informal relations with other firms, allows a more efficient transfer of resources (Wynarczyk and Watson 2005;Atalay et al 2014).…”

Optimización del Proceso de Innovación para Proyectos Internos en las Empresas

“…2) Gestión y alta dirección: la empresa debe establecer la responsabilidad y compromiso con el desarrollo y el progreso de la gestión de todo el proceso de innovación y comunicación eficaz a toda la organización. Para Agostino et al (2015) los cambios en la organización y los efectos de la globalización mundial exigen que la alta dirección de las empresas mejore su gestión de procesos y proyectos. 3) Personas: los profesionales y empleados deben tener niveles adecuados de formación, habilidades y experiencia para actividades de innovación profesional y académico.…”

SME Roles in Modular Value Chains: Perspectives for Growth and Innovativeness

“…It points to the dynamics and evolution of the position of firms and industries in global value chains due to the changes in one or more determinants of governance, such as supplier capability, level of complexity, or formalisation (Sturgeon et al, 2008;Hätönen, 2010). Recent advances in technology and the opportunity of networking to access lacking and complementary resources act in favour of smaller-scale operations (Agostino, Giunta, Nugent, Scalera, & Trivieri, 2015;Aslesen & Harirchi, 2015;Massini, Perm-Ajchariyawong, & Lewin, 2010;Cusmano, Mancusi, & Morrison, 2011). As a consequence, SMEs may operate as network leaders, coordinating at least parts of the value chain of a good in the form of modules, such as subsystems of the IT architecture (Hätönen, 2010;Alberti, Sciascia, Tripodi, & Visconti, 2008).…”

“…ITServCo's model requires less formalised (the presence of high to medium formalisation) and more adaptive (low to medium asset specificity) way of implementing projects. This approach is typical of SME networking that involves interaction and mutual dependence of tangible and intangible resources among partners (Agostino et al, 2015;Aslesen & Harirchi, 2015;Massini et al, 2010;Alberti et al, 2008;Oviatt & McDougall, 2005).…”