Global value chains and sectoral innovation systems: An analysis of the aerospace industry

This paper explores the link between a country's position in the aerospace global value chain (GVC) and the strength of its innovation system. Countries' participation to different stages of the GVC is proxied using export data at a narrow product level, while innovation system indicators are built from US patents. The analysis covers the 2007-2018 period for 38 countries. Our results highlight a relationship between the strength of the inno-vation system and a country's participation and specialization in different stages of the aerospace GVC: varied and pervasive (quality) rather than more intensive (quantity) innovation systems are associated with a stronger presence in higher value-added stages of the value chain. These results highlight the importance of improving an innovation system targeting the development of a differentiated knowledge base and fostering the integration of different actors to sustain the aerospace industry and facilitate upgrading within the value chain.

Automated summary

This paper analyzes the relationship between a country's position in the aerospace global value chain (GVC) and the strength of its innovation system. The study uses export data and US patents as proxies for GVC participation and innovation system indicators respectively. The findings suggest that a strong and varied innovation system is associated with a higher presence in higher value-added stages of the aerospace GVC. These results emphasize the importance of improving innovation systems to sustain the aerospace industry and facilitate value chain upgrading.