The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change

The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change

The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change

The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change

Synopsis

Using case studies from the US, Japan, South Korea, Brazil and India, this work explains how and why the steel industry has shifted from the advanced capitalist countries to the late industrializing countries.

Excerpt

Steel and steel-based engineering have long been regarded as the thews and sinews of modern industrial and military power. This was apparently demonstrated yet again in what the Japanese call the Pacific War of 1941-5, where the overwhelming US superiority in ships, airplanes, and armaments gave it victory over the indomitable Japanese soldier, prepared at all times to kill or to die for his country or Emperor—right or wrong. Governments which have deliberately embarked on a plan for industrializing their countries, therefore, have paid special attention to the development of an indigenous steel industry.

This book provides a fascinating analysis of the reasons for the staggering success of the post-World War II Japanese steel industry until it was over-taken in international competitiveness by the Korean industry, and also a connected account of the much more mixed record of the Brazilian and Indian steel industries. All these four histories are strongly influenced by state intervention, but with very different outcomes, the reasons for which D’Costa sets out in this book. His analysis is not limited to explaining the differential fates of the late, and late late, industrializers. He sets them against the background of international competition in prices, costs of production, technology, investment, and capacity-building, and provides a succinct account of the doings and the causes of the downfall of the once-mighty US steel industry.

Most processing technologies connected with steelmaking were and continue to be characterized by strong economies of scale. Add to that the fact that large amounts of finance are needed to implement best-practice technologies on scales that yield the lowest cost, and that steel is a major input in most capital goods and is likely to experience strong ups and downs in demand, the need for large firms in the industry becomes a matter of sheer common sense. The controllers of the US industry realized it better than others, and through mergers they created the first billion-dollar firm in the world, the US Steel Corporation. After that, the steel industry in the US went from strength to strength and emerged as the leading producer of steel, with a very big gap between it and the rest of the producers, at the end of

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