This study explains how the co-creation of value in networks can lead to technological upgrades in a local industry (local content development) through transformation of business processes, digitalization of drilling rigs and innovation in oil extraction in the oil and gas industry of Kazakhstan. Theoretical perspectives on local content development (LCD) are predominantly informed by economic and political perspectives. The aim of this paper is to develop a strategic perspective on LCD in clusters. This is qualitative research which uses a case study approach.