Study Of Global Value Chain High-tech Industry

The theory of global value chain has emerged as a special theory in the field of international division of labor since1990s. The unique nature of global value chain lies in three aspects. Firstly, the concept of global value chain has been extended on the basis of global commodity chain which derives from management, and this provides a micro-scope to GVC theory. Secondly, the process of integration into global value chain is also the process of integration into international division of labor, which is a significant channel to establish national competitive advantage. The concept of GVC also provides a more macro-level approach for a certain country or region to compete in global economy. Thirdly, GVC theory could be explained in a industry level, which contains the physical composition of value chain and the value creation process. Physically, global value chain is composed of the production, circulation, consumption parts covering a global network. From the value creation approach, GVC is composed of the process of semi-finished products, the assembly of finished goods, selling and service after sales. The huge amount of information sharing and value exchange process exist in the network of different economies and different parts of value chains, so the relationship of cooperation and competition is reflected in the different parts of global value chain. Therefore, the industry level explanation of GVC contains the physical composition and value-added characteristics.The research target of this paper is high technology industries, and this paper tries to explain the division pattern, value-added mechanism and upgrading strategy of latecomer economies in the field of high-tech industries. High technology industries are typical trans-national industries which could spread different fragmentations of value chain. Also, high technology group plays a significant role in the modern industry system of emerging markets and developing countries. According to the classification of OECD, aerospace manufacturing, electronics and communications equipment manufacturing, computer and office equipment manufacturing, pharmaceutical manufacturing, medical equipment and instruments manufacturing industry have been included into high-tech group.Relative literatures show that industry level of GVC theory mainly focused on the openness, trade scale and international position of emerging markets. Based on these literatures, this paper is trying to solve following questions:firstly, how to deconstruct the division pattern of GVC of high technology industry and its sub-industries? How to explain the driving forces and formation mechanism of high-tech industry? Thirdly, with the emerging economies integration into GVC, how to evaluate the home innovation capabilities of emerging economies? What kind of conditions could hamper or promote the indigenous innovation? The main contents are as follows:This paper has reviewed and combed the theoretical foundation GVC theory, which includes the derivation of GVC, the theory of international division of labor and its application, the theory of upgrading in GVC from the perspective of latecomer countries.On the basis of theoretical foundation, this paper tries to explore the mechanism of division in GVC, and discuss the fundamental element of GVC, which is the concept of fragment and the concept of value-added unit. The model of value-added has been applied to the explanation of upgrading process in GVC.From the perspective of the development of high technology industries, the multinational corporation has spread research, designing, production of module parts, assembly and sales all over the world according to the lucrative location. The most powerful index of development is not traditional one reflecting the overall trade scale, however, is the variation of value-added in the GVC. Developed countries have input high-level factors of domestic contribution to industries, while latecomers input relatively low-level factors, in doing so, lower profits have captured by emerging markets.According to the industrial cases of upgrading in GVC, the general pattern of climbing up in GVC is as follow. At the early stage, the local industry should firstly understand the action plan of different level, not only the plan of the leading corporation but the overall pattern of the whole industry. Then, if located at the bottom of global value chain, the local corporation should expand the division fragmentation by closely cooperate with the other firms in the chain, trying to develop research work with leading corporations to promote the technological level in products.This paper tries to elaborate the upgrading pattern of latecomer economies in GVC. On the basis of empirical analysis of openness and innovation capabilities of Chinese high-tech industries, the promotion of technology and the expansion of local market have been proved as two major approaches with regard to local upgrading. The promotion of technology is highly dependent of research input, and the expansion of market should fully tap the local market resources.The paper also differentiates the traditional high-tech industries and strategic emerging industries. The former group focuses on the functional upgrading in the existing global value chain, while the later one values the development of open innovation system to cultivate the sustained innovation for seeking a long-term competitive strategy.