development. The sector has grown importance over the years for Chile, but the volume of exports is still meager.

**Figure 18. Producer-driven Networks: Argentina vs Comparators**

<!-- Start of picture text --> Automobile Exports<br>100 20,000,000<br>80 15,000,000<br>60<br>10,000,000<br>40<br>20 5,000,000<br>0 0<br>1992 1994 1996 1998 2000 2002 2004 2006<br>CHL Automobile share BR Automobile share AR Automobile share<br>CHL Automobile US$ mil BR Automobile US$ mil AR Automobile US$ mil<br>ICT Exports<br>30 5,000,000<br>25 4,000,000<br>20 3,000,000<br>15<br>10 2,000,000<br>5 1,000,000<br>0 0<br>1992 1994 1996 1998 2000 2002 2004 2006<br>CHL ICT share BR ICT share AR ICT share<br>CHL ICT US$ Mil BR ICT US$ Mil AR ICT US$ Mil<br><!-- End of picture text --> <!-- Start of picture text --> Automobile Imports<br>80 10,000,000<br>60 8,000,000<br>6,000,000<br>40<br>4,000,000<br>20 2,000,000<br>0 0<br>1992 1994 1996 1998 2000 2002 2004 2006<br>CHL Automobile share BR Automobile share AR Automobile share<br>CHL Automobile US$ mil BR Automobile US$ mil AR Automobile US$ mil<br>ICT Imports<br>70 12,000,000<br>60 10,000,000<br>50 8,000,000<br>40<br>30 6,000,000<br>20 4,000,000<br>10 2,000,000<br>0 0<br>1992 1994 1996 1998 2000 2002 2004 2006<br>ICT share ICT share ICT share<br>ICT US$ Mil ICT US$ Mil ICT US$ Mil<br><!-- End of picture text --> _Source:_ Comtrade and author’s calculations (SITC version 2).

**These findings are in line with Anlló and Ramos (2007), who argue that investment in R&D in Argentina has been stagnant over the past decade, while Brazil has undertaken a very proactive approach with policies supporting the productive sector** . In fact Brazil has experienced a change of R&D strategy in subsidiaries, which have acquired new responsibilities, especially in the automotive industry and to a lower extent in ICT. Generally, the difficulties encountered by local productive sector in accessing and generating knowledge are related to the position of the local firms in the global chain. In a few cases integration into the global chain has even been negative because some functions and production components have been transferred outside of the country. Brazil is ahead of Argentina in this respect, and the changes in Brazil policies for the productive sector have helped to maintain and entrench some of the most knowledge/technology-intensive activities within its local production chain.

**The increase of exports in the automobile network has been led by exports to Brazil, which have grown at an average speed of 47 percent in the 2004-06 periods and represent almost 50 percent of total exports** (Figure 19). P&C do not represent an important share (and has even decreased), so the increase must be led by final products. However Brazil is also the most important source of automobile imports (60 percent of Argentina’s automobile imports are sourced in Brazil), the value of which exceeded Argentina’s automobile exports to the country. This reflects the fact that Brazil is the main recipient of Argentine exports of industrial manufactures, owing to integration of the production chain in the automotive and other sectors.  The regional bloc has frequently served businesses as a springboard to other markets by enabling them to achieve economies of scale and specialization, to promote the learning process and to increase the proportion of high-end technological products involved in trade. The EU and the USA have not been important recipients of automobile exports in terms of value, and they import almost only P&C from Argentina’s automobile network.

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