Research

Wuttke, T., Perez-Almansi, B., & Techakanont, K. (2025). Competition and Development in Automotive Global Value Chains: Insights from Thailand, South Africa and Argentina. The Journal of Development Studies, 0(0).

This article examines the varying outcomes of countries participating in the automotive global value chain (GVC), focusing on Thailand, South Africa, and Argentina. While all three countries had similar starting points in the 1990s, Thailand outperformed the others by achieving greater scale in vehicle production, leading to significant local economic benefits, such as trade surpluses, expanded supply chains, and the localization of R&D activities. The paper introduces the concept of the ‘adding-up problem’ in automotive GVC participation, where lead firms centralize production and R&D to maximize economies of scale, leaving competing countries with limited production volumes and weaker local supply chains. Based on more than 100 semi-structured interviews, along with industry statistics, this study compares the automotive industries of the three countries, focusing on their competition in medium-sized pickup truck production. The paper contributes to GVC literature by refining the understanding of zero-sum dynamics in global production. We demonstrate that countries’ success is constrained by the relational nature of GVC competition, but show that the automotive GVC nonetheless offers substantial economic development benefits for participating countries. Thailand’s superior performance is explained through serendipitous factors like income level and location, as well as first-mover advantages due to strategic industrial policies.

Whitfield, L., Maile, F., & Wuttke, T. (2025). Green Windows of Opportunity and Catch-Up Industrialization in Africa, in The Oxford Handbook on the Greening of Economic Development (eds) Mathews, J., & Oqubay, A., Oxford University Press, Chapter 15.

Radical changes in the technologies of existing industries linked to the green transition create windows of opportunity for African countries to strategically link up to these technological developments and use them to catalyse economic development on the continent. The chapter explains the green and sustainability shifts occurring in three manufacturing sectors—textile and apparel, automobiles, and green hydrogen and related applications—and examines the opportunities that they provide and how African countries can take advantage of them. Moving to the technological frontier in these industries requires that African governments leverage foreign knowledge and incentivize foreign direct investment but also support local firms to use the presence of foreign firms to enter global value chains, build their capabilities, and generate scale economies.

Schmitz, L., Seidl, T., & Wuttke, T. (2025). The Costs of Conditionality. IPCEIs and the Constrained Politics of EU Industrial Policy. Competition & Change, 0(0).

With the global return of industrial policy, most literature examines why states increasingly resort to market activism. Much less is known about how industrial policy works “on the ground.” In this paper, we address this how-question through an in-depth case study of the poster child of the EU’s new industrial policy: the Important Projects of Common European Interest (IPCEI). We argue that while the literature has rightly pointed out that attaching conditionalities to public money is key to steering markets effectively and equitably, conditionalities also come with costs. Moreover, they are not the reflection of policy design principles but reflect political, institutional, and ideational constraints that shape which and how conditionalities are applied. We show how the constrained politics of EU industrial policy have shaped both the creation and application of the conditionalities that govern IPCEIs, and how this has led to costs in the form of perverse outcomes, adverse selection, and workarounds.

Whitfield, L., & Wuttke, T. (2024). Incumbent Advantage, Barriers to Entry, and Latecomer Catch-up in the Global Automotive Industry. CBDS Working Paper 2024/3, Copenhagen Business School.

Incumbent advantages have prevented most latecomer firms from being successful in the automotive industry. The industry to this day is dominated by the first mover firms from North America and the fast followers from Western Europe and Japan. Many developing and emerging countries have significant automotive industries, but they are dominated by these incumbent foreign firms. Some of them have tried to prop up indigenous carmakers, but largely failed. In those few cases where firms managed to pursue some degree of catch-up with the US first mover automotive firms, government industrial policy played an important role, but this paper argues that the developmental state framework, emphasizing industrial policy, is insufficient in explaining catch-up by automotive firms. It presents what we call the Barriers to Entry approach, which focuses on the barriers to entry that latecomer firms face when trying to catch up in a given industry. These barriers to entry are constituted by the advantages of incumbent firms with accumulated knowledge, capabilities and a supporting nexus. The paper demonstrates these advantages but also how some firms successfully overcame them through firm cases in Japan, South Korea and China. It highlights the striking parallels between these cases and summarizes them in terms of our barriers to entry categories: closing the knowledge gap, closing the capabilities gap, building a supporting nexus, and commercializing new technologies. The evolutionary economics literature on latecomer catch-up has emphasized the importance of firm-level efforts in technological capability building as opposed to passively expecting technology transfer through foreign direct investment. Our Barriers to Entry approach builds on but extends this literature by specifying the nature of capabilities that latecomer firms needed to build in the automotive industry as well as the origins of their absorptive capacity (prior knowledge and intensity of effort) that drove them to indigenize automotive technology (scientific and tacit knowledge). In this context, we stress the importance of migratory knowledge through transnational networks as well as of role models for both industrial policymaking and firm strategies. The opportunities afforded to latecomer firms depend on the situation in a global industry at a certain moment in time, which is conditioned by foreign firms’ business strategies and incumbent countries’ government policies.

Lema, R., Wuttke, T., & Konda, P. (2024). The electric vehicle sector in Brazil, India, and South Africa: Are there green windows of opportunity? Industrial and Corporate Change, 33(6), 1430-1459.

The shift to electric mobility is driving disruptive transformations in the automotive sector worldwide. It poses significant but different opportunities and challenges to incumbents and latecomers at both the firm and country levels. China’s green industrial policy has facilitated its rapid catching up and even leapfrogging in some domains of electromobility. This article asks whether the exploitation of this window of opportunity can be replicated in other latecomer countries. Accordingly, it provides a comparative analysis of the automotive green window of opportunity in Brazil, India, and South Africa, three emerging economies with long established but structurally different automotive industries. To do so, it examines domestic preconditions, policy and enterprise responses, and preliminary industrial development outcomes. Although all the three countries face constraints in replicating China’s relative success, the article shows how green opportunities and threats are unequally divided between the three countries.

Butollo, F., Staritz, C., Maile, F., & Wuttke, T. (2024). The End of Globalized Production? Supply-Chain Resilience, Technological Sovereignty, and Enduring Global Interdependencies in the Post-Pandemic Era. Critical Sociology, 51(4-5), 779-798.

This article assesses the impact of the COVID-19 pandemic, the war in Ukraine and geopolitics on geographies of production. Criticizing simplified perspectives on globalized versus intraregional production, we stress the multi-scalarity, the role of industrial policies and sector-specific path dependencies in shaping global production. Based on expert interviews and policy and industry documents, our analysis focuses on the automotive, clothing, and electronics industries. Although concerns for resilience increasingly shape lead firms’ strategies, increased regionalization of production through re- or near-shoring is only one of several strategies. Where it does occur, it has been driven by state policies that tackle certain strategically important products, not production networks as a whole. Hence, while recent events exposed the vulnerabilities of global production, we do not observe deglobalization in the sense of a comprehensive retreat from globalized in favor of intraregional production. Nonetheless, state interventions that are geopolitically motivated and affect firms’ investment decisions have intensified particularly in the United States and the European Union.

Wuttke, T. (2023). Global value chains and local inter-industry linkages: South Africa’s participation in the automotive GVC. The Journal of Development Studies, 59(2), 153-169.

International trade in the 21st century operates through global value chains (GVCs). There is a growing literature on how the emergence of GVCs has changed the playing field for catch-up industrialization of developing countries. Inter-industry linkages have historically been a central aspect of catch-up industrialization. How such linkages on the country level are affected by the reality that trade is conducted via GVCs is an important research question. This paper synthesizes the theoretical elaborations on inter-industry linkages from the classic development economics literature with secondary empirical data from the East Asian industrialization experience to illustrate the importance of inter-industry linkages for the industrialization process. Using primary data from the South African automotive industry, the paper shows how the dynamics of the automotive GVC have affected domestic inter-industry linkage building in the country. The backward linkages to the domestic component manufacturing industry and to the domestic materials industries from South Africa’s successful integration into the automotive GVC have been disappointing. Both local policy decisions as well as GVC-specific dynamics of follow sourcing and the proliferation of manufacturing technologies and material standards have undermined more substantial backward linkages from exports of automobiles.

Monaco, L., & Wuttke, T. (2023). The South African Auto Industry in a World of GVCs: Lead Firm Sourcing Strategies and Local Supplier Development. International Journal of Automotive Technology and Development, 23(2-3), 104-120.

This article aims to contribute to the theoretical debate on GVCs-driven industrialisation in emerging economies and to the South African policy debate by closely investigating the local manufacturing base in the South African auto industry and the prospects for its further expansion. For this purpose, it builds on more than 50 semi-structured interviews, conducted throughout 2021 with assemblers, large multinational component firms with subsidiaries in South Africa, local component manufacturers, policymakers and industry experts. The paper argues that only by combining an understanding of lead firms' sourcing strategies and local component suppliers' perspectives, an assessment of obstacles and opportunities for localisation is possible. In this regard, the paper provides an in-depth analysis of sourcing strategies of the assemblers and multinational component firms and a comprehensive picture of structural, policy-related, market-dependent, and capability-related issues that local component suppliers face with regards to deepening local value addition.

Wuttke, T. (2023). Catch-up Industrialization in the Era of GVCs: A case study of the automotive global value chain. PhD Thesis, Roskilde University.

In the 21st century, international trade in manufactured goods in the 21st century operates through global value chains (GVCs). This doctoral thesis investigates whether this fact has changed the playing field for catch-up industrialization, and what limitations and opportunities it provides for developing countries integrating with GVCs. It does so mainly through an analysis of the automotive GVC, relying on both secondary data for a broad set of emerging economies and on primary empirical data from the South African automotive industry, which has successfully integrated itself with the automotive GVC over the last thirty years. The thesis puts forward a holistic theoretical understanding of catch-up industrialization. Combining this theoretical understanding with a deep appreciation of GVCs provides a strong analytical framework for analyzing catch-up industrialization attempts and achievements in the 21st century. This combination of three strands in the literature – the classical development economics perspective, the evolutionary innovation and technology perspective, and the GVC perspective – is novel and is capable of resolving the shortcomings of analytical frameworks that only use one or two of these perspectives. 

Wuttke, T., Smit, L., Parshotam, A., Ancheita, A., & Meridian, A. (2022). Human Rights and Environmental Due Diligence in Global Value Chains: Perspectives from the Global South, SWP Working Paper, German Institute for International and Security Affairs.

The international debate on the governance of global value chains (GVCs) is dominated by the efficiency logics of the participating firms and the proposals of voluntary or mandatory due diligence regulations. The Research Network Sustainable Global Supply Chains held a conference on “Human Rights and Environmental Due Diligence in Global Value Chains: Perspectives from the Global South” in Berlin, Germany, in order to hear the perspectives and experiences from the Global South regarding due diligence in GVCs. This working paper recaps the discussions from the conference and embeds them in the wider scientific debate on the role and impact of due diligence legislation in GVCs.

Presentation on EU Industrial Policy at New Thinking in Industrial Policy: Perspectives from Developed and Developing Countries, Columbia University, November 2024.

European Chips Act and the Global Race in Semiconductor Industrial Policy. Business in Development Podcast, Copenhagen Business School, June 2024.

In Conversation with Keun Lee: A Schumpeterian Approach to Economic Development. Business in Development Podcast, Copenhagen Business School, September 2023.

Subsidies and Investments in the European Semiconductor Industry, Presentation at Asia-Europe Institute, Universiti Malaya, August 2023.

EU cannot catch up using mandated tech transfers. Letter to the Editor, Financial Times, November 2024.

The Costs of Conditionality: Lessons from IPCEIs, with L. Schmitz and T. Seidl, 2024, LUHNIP Policy Brief, LUISS Institute for European Analysis and Policy.

Electric Vehicles and the Changing Automotive GVC: A Window of Opportunity for African Countries? Policy Brief, 2023, Centre for Business and Development Studies, Copenhagen Business School.

Industrializing through global value chains? The case of the South African automotive industry, with L. Whitfield, 2022, Centre for Business and Development Studies, Copenhagen Business School.

Reconciling catch-up industrialisation with de-growth, LSE International Development Blog, January 2021, London School of Economics and Political Science.