Upgrading in global value-chains: a case study of technology-learning among IKEA-suppliers in China and Southeast Asia

Abstract

This article analyses technology upgrading in global value-chains, by using unique data from the Swedish-based home-furnishing retailer IKEA and 23 of its suppliers in China and Southeast Asia. We show how these suppliers use IKEA’s technological support to improve their operational and duplicative capabilities, and, more importantly, their adaptive and innovative capabilities. Theoretically, this suggests that typologies of governance structures need to include a ‘developmental’ category, where buyer-driven value-chains are coordinated by powerful retailers with a global sourcing organization designed to facilitate close, local and long-term interaction, resulting in an efficient sourcing of low-cost, finished products, as well as technological upgrading among suppliers.

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