Upgrading of developing countries industrial clusters’ firms: Conceptual-theoretical framework

Industrial clusters in developing countries exhibit the properties of labour intensive, low-tech and low-cost manufacturing hubs in the global production networks. This research argues that institutional architecture of global production networks provides an opportunity to these industrial clusters of developing countries to create value through ‘knowledge links’ between the firms and non-firms actors of global production networks and innovation systems (ISs) in which the clustered firms are embedded. The research develops a hypothesis for a potential upgrading of industrial cluster firms through the support of knowledge institutes embedded in the network structures of regional innovation systems, national innovation systems and global production networks. The conceptual-theoretical framework is designed by connecting the cluster theory, innovation system framework and global production networks theory for an assessment of the upgrading of developing countries industrial clusters within global production networks. From an institutional perspective, this research classifies the knowledge links as ‘technological-knowledge’ and ‘organisational-knowledge’ links between the firm and non-firms actors of global production networks and innovation systems. A further future research can empirically test this designed framework through data of the industrial clusters firms, participating in the global production networks.