Template-type: ReDIF-Paper 1.0 Author-Name: Lema, Rasmus Author-Email: lema@business.aau.dk Author-Workplace-Name: Aalborg University, and University of Johannesburg Author-Name: Pietrobelli, Carlo Author-Email: pietrobelli@merit.unu.edu Author-Workplace-Name: UNU-MERIT, and University Roma Tre Author-Name: Rabellotti, Roberta Author-Email: roberta.rabellotti@unipv.it Author-Workplace-Name: University of Pavia, and Aalborg University Author-Name: Vezzani, Antonio Author-Email: antonio.vezzani@uniroma3.it Author-Workplace-Name: University Roma Tre Title: Deepening or delinking? Innovative capacity and global value chain participation in the ICT sectors Abstract: Innovation trajectories in global value chains can take highly differentiated pathways. Firms and other organisations operating in a sector in a given country may gain or lose innovative capacity over time compared to their peers in other countries. In this paper we address the question: do stylised trajectories emerge from the analysis of countries' relative innovative capacity and global value chain participation? We draw explorative insights from a cluster analysis of 45 countries on the subsectors of the information and communication technology industry: hardware and software. Our analysis uncovers remarkable differences across sectors and countries. We identify different trajectories and discuss the sub-sectoral specificities which contribute to explaining these differences. The association between the strengthening of innovative capacity and deeper insertion in global value chains applies to only a handful of countries and only in the software subsector. These findings raise questions for future research on innovation in global value chains. Classification-JEL: F23, D23, L22, L25, O10, O32, O38 Keywords: Global value chains, Innovation capacity, Innovation trajectories, Hardware, Software, ICT Series: UNU-MERIT Working Papers Creation-Date: 20210301 Number: 2021-007 File-URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-007.pdf File-Format: application/pdf File-Size: 275 Kb Handle: RePEc:unm:unumer:2021007