Value extraction, Intellectual Monopolies and Global Corporate Innovation and Production Systems Cecilia Rikap
|9 December 2019
|15:30 - 16:30
|What is it:
|Alliance Manchester Business School
|Bengt-Åke Lundvall, Cecilia Rikap
Join us for MIOIR External Seminar Series 19/20, seminar hosted by Bengt-Åke Lundvall & Cecilia Rikap.
Abstract: The purpose of this paper is to propose new conceptualizations of emerging phenomena in the world economy including the growing tension between the US and China.
The biggest companies in the world in terms of market value, Google, Amazon, Facebook, Apple and Microsoft (GAFAM), and their counterparts in China, extract value and appropriate rents through privileged access to data from producers and consumers all around the world. A prerequisite for their dominant position is a high rate of innovation. We refer to them as intellectual monopolies.
Existing conceptualizations of ‘lead firms’, such as in the global value chain literature, do not capture the new reality where lead firms build leadership primarily on innovation and diversify in terms of technologies and products. Therefore, we suggest that each of these giants builds, redesigns and leads a Global Corporate Innovation and Production System (GCIPS).
The scope of these GCIPS challenges national states trying to regulate intellectual monopolies and reinforce indigenous knowledge capabilities. The lead firms enjoy significant freedom to redistribute rents globally. This may benefit either their home country or countries offering lower tax rates, at the expense of host countries left without tax revenue.
The current conflict between the US and China reflects that China is the only country fostering serious competitors to GAFAM-firms and that those firms spearhead research and development in strategic technologies such as robotics and artificial intelligence. Patterns of rivalry between Corporate Systems and national governments are complex and contradictory. Governments may foster and support their own lead firms while the loyalty of those firms to their home state is limited.
This paper is a first step toward understanding how global trends (platforms, intellectual monopoly, use of big data, etc.) transform world capitalism and bring new kinds of challenges for national innovation systems at different levels of income and in different parts of the world.
The Manchester Institute of Innovation Research holds a series of regular seminars given by visiting speakers to Manchester, discussing key issues in science, technology and innovation policy and management. All are welcome.
Organisation: Department of Economic History, Lund University.
Organisation: CONICET. CEPED, IRD/Université de Paris and IFRIS
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