Innovation and Structural Design in Regionalized Supply Networks

Abstract

Regionalization is reshaping global supply networks (SNs) as firms respond to geopolitical, economic, and institutional pressures. Yet extant research has not examined how patterns of structural adaptation associated with regionalization may influence innovation. In this paper, we develop a typology of three theoretically grounded archetypes: (1) replication, (2) substitution, and (3) reconfiguration, which are distinguished by continuity or change in firm membership and process structures. The archetypes offer a theoretical framework for characterizing how global SNs can transition toward regional configurations. We theorize how each archetype constrains or enhances the focal firm's innovation potential. Replication enables incremental innovation. Substitution facilitates moderate capability recombination. Reconfiguration creates conditions for architectural and radical innovation through emergent structural change. The typology reveals fundamental trade-offs between risk exposure, cost, and innovation potential. This work advances theory by linking dynamic structural adaptation to innovation outcomes and provides a foundation for future empirical research on SN regionalization.