• Abstract and Figures
• Public Full-text

Public Disclosure Authorized GLOBAL PRODUCTION NETWORKING AND TECHNOLOGICAL Public Disclosure Authorized CHANGE IN EAST ASIA Public Disclosure Authorized EDITORS SHAHID YUSUF M. ANJUM ALTAF KAORU NABESHIMA Public Disclosure Authorized GLOBAL PRODUCTION NETWORKING AND TECHNOLOGICAL CHANGE IN EAST ASIA SHAHID YUSUF M. ANJUM ALTAF KAORU NABESHIMA EDITORS A copublication of THE WORLD BANK the World Bank and Washington, D.C. Oxford University Press © 2004 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] All rights reserved. First printing June 2004 1 2 3 4 07 06 05 04 The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the govern- ments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorse- ment or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522- 2422, e-mail [email protected]. Library of Congress Cataloging-in-Publication Data Global production networking and technological change in East Asia / edited by Shahid Yusuf, M. Anjum Altaf, Kaoru Nabeshima. p. cm Includes bibliographical references and index. ISBN 0-8213-5618-6 1. Manufacturing industries—East Asia. 2. Business networks—East Asia. 3. Production management—East Asia. 4. Technological innovations—East Asia. 5. Electronic industries—East Asia. 6. International business enterprises—East Asia. 7. Globalization—Economic aspects—East Asia. I. Yusuf, Shahid, 1949– II. Altaf, M. Anjum, 1950– III. Nabeshima, Kaoru. HD9736.E18G55 2004 338.8'895—dc22 2004044087 Cover design by Debra Naylor of Naylor Design, Inc. CONTENTS Preface v 1 Competitiveness Through Technological Advances Under Global Production Networking 1 Shahid Yusuf 2 The New Global Supply-Base: New Challenges for Local Suppliers in East Asia 35 Timothy J. Sturgeon and Richard K. Lester 3 Global Production Networks in East Asia’s Electronics Industry and Upgrading Perspectives in Malaysia 89 Dieter Ernst 4 Production Networks in East Asia’s Auto Parts Industry 159 Richard F. Doner, Gregory W. Noble and John Ravenhill 5 The Global Strategies of Japanese Vehicle Assemblers and the Implications for the Thai Automobile Industry 209 Ken’ichi Takayasu and Minako Mori 6 Chinese Enterprise Development and the Challenge of Global Integration 255 Edward S. Steinfeld 7 Logistics in East Asia 297 Trevor D. Heaver iii iv CONTENTS 8 Technology and Innovation in Developing East Asia 353 Hal Hill 9 Technology Transfer in East Asia: A Survey 395 Kaoru Nabeshima 10 An Investigation of Firm-Level R&D Capabilities in East Asia 435 Gary H. Jefferson and Zhong Kaifeng Annex: Comparison of Technology Parks 477 Index 481 About the Editors 489 PREFACE This is the third volume in a series of publications from a study co-spon- sored by the Government of Japan and the World Bank to examine the sources of economic growth in East Asia. The study was initiated in 1999 with the objective of identifying the most promising path to development in the light of global and regional changes. The first volume, Can East Asia Compete?, published in 2002, provided a compact overview of the relevant strategic issues and future policy di- rections. Innovative East Asia, the second volume, analyzed each of main issues and consequent policy choices drawing comprehensively upon re- cent empirical research and the findings of firm surveys conducted for the study. Its principal message is that sustained economic growth in East Asia will rest on retaining the strengths of the past—stability, open- ness, investment, and human capital development—on overcoming the sources of current weaknesses—in the financial sectors, corporate, judi- cial, and social sectors—and on implementing the changes required by the evolving economic environment, particularly with regards to tech- nology development. This book, Global Production Networking and Technological Change in East Asia, is the first of two volumes of papers commissioned for the East Asia study. It provides detailed information, analysis and case studies fur- ther illuminating some of the topics covered in the earlier volumes. The contributors rigorously examine the effects of the changing global geog- raphy of production for the growth prospects of East Asian economies. They conclude that in the face of a global environment, economies in East Asia need to adapt to the changing character of global production networks and to nurture and develop technological capabilities in order to sustain their growth prospects. The companion volume, Global Change v vi PREFACE and East Asian Policy Initiatives, will include a second set of papers that ex- plore regional and institutional policy options that East Asian economies face in a similarly in depth manner. Both volumes complement Innovative East Asia and are addressed to researchers, students and policymakers. The financial backing of the government of Japan through its Policy and Human Resources Development Fund provided vital support for this project, as did senior public officials who gave generously of their time. We are deeply grateful to Haruhiko Kuroda, Naoko Ishii, Masahiro Kawai, Kiyoshi Kodera, Rintaro Tamaki, Junichi Maruyama and Takatoshi Ito. The staff of the World Bank’s Tokyo office facilitated the reviews and sem- inars, and we greatly appreciate the assistance provided by Yukio Yoshi- mura, Shuzo Nakamura, Mika Iwasaki, Tomoko Hirai, and Hitomi Sasaki. We also deeply appreciate the support we received from Deepak Bhattasali and Jianqing Chen at the World Bank’s Beijing office. We owe special thanks to K. Migara De Silva for his enthusiastic and tireless support in or- ganizing and participating in seminars in Beijing and Tokyo. The papers in this volume were presented at seminars and workshops in Beijing; Cambridge, Mass; Tokyo, and Washington, DC. T he com- ments received helped the authors in revising their drafts. We would like to thank all of those who participated in these seminars, along with the many reviewers of the entire manuscript and, in particular, Jose Luis Guasch. At the World Bank, the Development Research Group has for several years offered a base for the study. In addition, we are grateful for the sup- port provided by East Asia and Pacific Region. We are especially indebt- ed to Jemal-ud-din Kassum and Homi Kharas for their guidance and strong encouragement. The study team was ably supported by the research skills of Soumya Chattopadhyay, Farhan Hameed, and Yifan Hu. The manuscript was pre- pared by Paulina Flewitt, Marc Sanford Shotten, and Rebecca Sugui; and we thank Susan Graham, Patricia Katayama, and Ilma Kramer of the Of- fice of the Publisher for their expert management of the editorial and print production of the volume. CHAPTER 1 COMPETITIVENESS THROUGH TECHNOLOGICAL ADVANCES UNDER GLOBAL PRODUCTION NETWORKING Shahid Yusuf tarting in the early 1990s, the emerging economies of East Asia ac- celerated the pace of deregulation and integration with the global economy.1 Although the crisis of 1997–98 resulted in a brief hiatus, making countries wary of the risks from open capital accounts and Sskeptical of the gains, the process has continued into the early twenty-first century, spearheaded by China’s entry into the World Trade Organization (WTO).2 Regional and bilateral free trade areas, the continuing evolution 1. Since the late 1990s, globalization has been analyzed, chronicled, and debated in obsessive de- tail, with frequent backward glances at the earlier round of globalization that commenced around the turn of the nineteenth century. While the gains from trade and the sharing of technology and ideas have been acknowledged with qualifications (Bhagwati 2004), a legion of skeptics worry about cultural imperialism, the risks from volatile capital flows, the loss of jobs as a result of rapid shifts in comparative advantage, and the declining role of the nation-state. For a compact review of the trends signifying globalization and their implications for developing nations, see World Bank (2000). Micklethwait and Woolridge (2000) provide an engaging account for the general reader, while a close look at globalization in historical perspective can be found in O’Rourke and Williamson (1999) and Held and others (1999). Some of the tensions generated by globalization are brought out in Stiglitz (2002), and its impact on markets and on inequality is discussed by Bour- guignon and others (2002). The interactions between globalization and the business sector are explored in Cairncross (2002) and Dicken (2003), while Yeung and Olds (2000) show how Chinese business groups are participating in and contributing to globalization. 2. A provisional summing-up of the considerable research on the effects of capital account openness would be as follows: middle-income countries with strong market and financial institutions are likely to benefit over the medium term from an open capital account. Low-income countries are less likely to derive much benefit, and their institutional gaps might make them prone to crises.

Load more

  500

Copy Link