International Production Networks in Asia: Rivalry or Riches

By Michael Borrus; Dieter Ernst et al. | Go to book overview

7

Riding the waves

Technological change, competing US-Japan production networks, and the growth of Singapore's electronics industry

Poh-Kam Wong


Introduction

As described elsewhere in this book, several East Asian countries outside Japan have emerged as major production platforms for the global electronics industry since the 1970s. Driven by global competition, firms from advanced countries in general and US and Japanese firms in particular have increasingly extended their supplier bases and production networks to the various countries in East Asia. In 1993, the four Asian NIEs, ASEAN, and China together already accounted for 13 percent of global electronics production, or about 40 percent of Japanese output (Elsevier 1996). With nearly all these countries achieving double-digit growth over the last three years and Japanese production stagnating, the share of non-Japan East Asian output in global production has increased substantially since then. Along with rapid expansion in output, there has also been a significant transformation in the nature of activities being carried in these countries.

This chapter focuses on one aspect of this changing structure of Asian production networks for the global electronics industry-the emergence and growth of Singapore as a major hub in South East Asia. By examining the dynamics of growth of Singapore's electronics industry over the last three decades, this chapter seeks to provide new insights into the shifting patterns of competitive interactions between US and Japanese production networks. In particular, we argue that the rise of Singapore is largely due to its ability to leverage the competing but overlapping production networks of major US and Japanese electronics firms. It is this ability to "ride the waves" of technological and organizational changes emanating from the United States and Japan that enabled Singapore to differentiate itself from other competing locations in East Asia-the North Asian NIEs of Korea, Taiwan and Hong Kong as well as the Southeast Asian "tigers" of Malaysia and Thailand.

This chapter is organized as follows. The first section profiles the historical growth of Singapore's electronics industry, highlighting a number of salient features that distinguish it from other competing locations in East Asia. The second section analyzes in more details the competing yet overlapping contributions of major US and Japanese firms to the development of Singapore's electronics industry, and the salient differences in organizational characteristics and strategic orientations between US and Japanese operations

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