Innovation and Competitiveness in the Copper Mining GVC: Developing Local Suppliers in Peru
Peru is the second largest producer and exporter of copper in the world. However, the country’s sector has weak background linkages and the emergence of innovative suppliers able to provide high-value products and services is still incipient. This article explores the opportunities to leverage Peru’s international positioning in the mining industry to foster the development and innovation capacities of local suppliers. Based on data analysis and interviews with local industry stakeholders, this research —which uses the global value chain framework— finds that the incorporation of a lar- ger number of high-value local suppliers into the copper value chain is limited by weaknesses in the national innovation system. In addition to this, it notes that the national copper policy places little emphasis in the need to innovate and add value. In order to generate a critical mass of strong and innovative suppliers, Peru must create solid institutions and coordination mechanisms to develop the sector. At the same time, it should favor the insertion of domestic suppliers into the value chain and incentivize these to innovate and scale. The article presents recommendations in these areas, as well as best practices from other mining countries that have successfully overcome these challenges.
