Innovation and Development

Green global value chains and innovation systems: pathways for upgrading and just transitions in developing economies

Background and Rationale

The accelerating global response to climate change is reshaping production systems, industrial policies, and trade relations (Lu et al., 2026; Andersen et al., 2025). Efforts to decarbonize economies, particularly through the energy transition from fossil-based systems to renewable and low-carbon energy sources, are transforming industrial structures and global production networks. These shifts are increasingly reflected in the evolution of green global value chains (GVCs), where environmental sustainability and carbon reduction are becoming central to competitiveness, market access, and technological upgrading (Lebdioui, 2024; Gong et al., 2019).

For developing economies, the green transformation of global value chains presents both opportunities and risks. On one hand, emerging industries linked to renewable energy technologies, energy-efficient manufacturing, sustainable agriculture, and circular economy practices offer potential pathways for industrial upgrading, technological learning, and structural transformation (O’Connor, 2026; Liu and Pereira, 2025). On the other hand, stringent environmental standards, carbon border adjustment measures, and technological gaps may further marginalize firms and sectors that lack the capabilities to adapt to the new green industrial paradigm.

The interaction between innovation systems, global value chains, and energy transitions is crucial. National and regional innovation systems shape how countries build technological capabilities, absorb knowledge, and foster innovation that enables participation in green industries and sustainable production networks. Therefore, institutions such as universities, research organizations, government agencies, and industry associations play important role in supporting green technological capability development, thus, facilitating or enhancing green technological diffusion.

At the same time, the transition toward low-carbon production and renewable energy systems must be socially inclusive and equitable (Rafique et al., 2025; Sovacool et al., 2022). The concept of just transitions emphasizes the need to ensure that workers, communities, and vulnerable groups are not left behind as industries and energy systems transform. In many developing economies, where employment and livelihoods depend on carbon-intensive sectors or informal economic activities, achieving a just transition requires careful policy design and institutional coordination.

This special issue of Innovation and Development aims to advance scholarly and policy debates on how green global value chains, energy transitions, and innovation systems interact to create pathways for sustainable upgrading and inclusive development in developing economies.

The special issue welcomes interdisciplinary contributions that examine the technological, institutional, economic, and social dimensions of green industrial transformation.

Scope and Objectives

This special issue seeks to:

• Advance theoretical and empirical understanding of the links between green global value chains, energy transitions, and innovation systems. 
• Explore how the shift toward low-carbon energy systems influences industrial upgrading and participation in global production networks 
• Examine how firms, institutions, and governments in developing economies build capabilities for green innovation and renewable energy technologies 
• Investigate how green transformations can contribute to inclusive development and just transitions 
• Provide policy insights for governments and development organizations promoting sustainable industrialization and energy transitions