Global Trade: Asian,
American, and European
Models of Apparel Sourcing
During the past several decades, East Asia's export industries have become increasingly diversified, internationalized, and regionally integrated. Whereas industrial upgrading from labor-intensive to capital- and technology-intensive industries has clearly occurred within Japan and the East Asian newly industrializing economies (NIEs), the notion of industrial upgrading by itself is inadequate to explain this process. It retains the national economy as the central unit of analysis and thus it neglects the ways in which tiered production involving interfirm networks between and within regions has shaped economic change. Related perspectives such as the "flying geese" model of East Asian development and product life cycle theory, while more dynamic than comparative advantage explanations of economic growth, also fail to capture the significance of a network-centered view of the world economy.
The industrial upgrading question is often framed as a debate about the relative importance of market forces and state policies in the development process. The significance of both states and markets is widely acknowledged in recent discussions of the most dynamic region of the world, East Asia. 1 But neither perspective directly addresses the question of how East Asian nations have been able to sustain their high rates of export-oriented growth since 1960, especially in the face of a variety of adverse factors such as several oil price hikes, rising wage rates, labor shortages, currency appreciations, a global recession, and growing protectionism in their major export markets.