Globalization of the Computer Industry
During the 1980s, the computer industry changed from a company- and country-based production structure into a global production system with little regard for company or country boundaries. The agent of change was the introduction of the personal computer, which transformed the way computers were designed, built, sold, and used. No longer were computers primarily made by large, vertically integrated companies to their own proprietary standards using their own components, peripherals, and software. Instead, PCs were designed and assembled according to common standards using components, peripherals, and software made by thousands of suppliers. In this environment, anyone with a little capital and know-how could get into the computer business, and thousands of entrepreneurs did. As the industry grew and became more competitive, PC makers looked for cheaper sources of labor and components, and a global production system was born.
The globalization of the industry was made possible by the standardized architecture and decentralized structure of the personal computer industry; globalization was driven by the constant need to cut costs in a hypercompetitive industry. The global production system was not evenly distributed, however, but became concentrated in the East Asian region. Computer production had moved first to Japan in the mainframe era, and then Japan was joined by the Asian newly industrialized economies (NIEs) as the PC industry went global. To a large extent, the global production system for PCs was really a U.S./Asian network.
The reasons for Asia's prominent position are rooted partly in the earlier mainframe competition, in which only the Japanese survived intact against IBM. The causes are rooted even more deeply in the globalization of the electronics industry in the 1960s and 1970s. As U.S. electronics and semiconductor companies moved production to Asia, they helped create capabilities that formed the underpinnings for PC production. The U.S. computer makers located production throughout Asia to tap these capabilities, and also