Firm-Centered Approaches to Overcoming Semi-Peripheral Constraints

Abstract

Scholars of economic development in the Global South and of industrial policy in the Global North are increasingly advocating top-down policies by a strong, activist state to promote growth and innovation. Instead, we argue there is much to learn from firm-centered approaches about how the main economic decision-makers, namely, firms, engage with the constraints and opportunities that they face. This is particularly important in the semi-periphery, where public authorities do not always have the capacity, resources, and political support required to play the activist developmental role suggested in the literature. This introduction to the special issue develops the concept of the semi-periphery, showing that it can foster knowledge exchange across the North–South divide and promote innovation in analyses of the dynamics of economic development. It also presents the multilevel perspective through which the special issue accounts for cases where firms were able to overcome semi-peripheral constraints. We argue that carving out economic opportunities in the semi-periphery often requires the activation of the initiative of local firms, which form alliances with other actors from the private, public, and non-profit sectors. Rather than producing economic innovation directly, macro-institutions facilitate those efforts by providing a governance architecture that makes it easier for firms to form alliances and innovate.