Paper short abstract:

This article challenges understandings of development in the context of GVCs through the case of pharmaceuticals in South Africa. It emphasises the significance of market-seeking imports, and their local development implications, highlighting state responses which go beyond a facilitator role.

Paper long abstract:

This article challenges understandings of development in the context of global production networks, and how the state seeks to shape such development. Drawing on primary research on South Africa's pharmaceutical industry, it looks at how the local industry is largely crowded-out by a dominant form of integration into GVCs oriented towards market-seeking imports. Local firms are limited to forming marketing and regulatory roles in partnership with importing companies and local industrial development is essentially a 'third wheel' to import dependent coupling. In such a context which is neither inside-out export-oriented development or outside-in asset seeking investment, the state's role in shaping value capture trajectories goes beyond facilitating upgrading within GVCs. While the facilitator and regulator roles have struggled, and the producer role has been mooted yet has not taken off, particular controversy has emerged over the influential role of the state as a buyer, through public procurement. Thus, considerable conflict has emerged within the state and over how to promote 'development' in the context of the pharmaceutical industry. Overall, the article questions how value capture trajectories are shaped within GVCs. It points to development beyond GVCs, the key role of the state as a buyer, and the conflict over development outcomes within GVCs.