Central and Eastern European countries are entering the development race at a crucial juncture in EU enlargement and the wider phenomenon of globalization. In the face of hesitant and controversial EU policy, these countries need to engage sound development strategies. International production networks are expected to be decisive in helping them strengthen their competitiveness and establish knowledge based economies. Julie Pellegrin looks at whether and how production networks develop in Central and Eastern European countries and assesses their chances of catching up with the rest of Europe.