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Internationalisation of Innovation: Why Chip Design Moving to Asia

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Author Info

  • Dieter Ernst

    () (Economics Study Area, East-West Center)

Abstract

This paper will appear in International Journal of Innovation Management, special issue in honor of Keith Pavitt, (Peter Augsdoerfer, Jonathan Sapsed, and James Utterback, guest editors), forthcoming. Among Keith Pavitt's many contributions to the study of innovation is the proposition that physical proximity is advantageous for innovative activities that involve highly complex technological knowledge But chip design, a process that creates the greatest value in the electronics industry and that requires highly complex knowledge, is experiencing a massive dispersion to leading Asian electronics exporting countries. To explain why chip design is moving to Asia, the paper draws on interviews with 60 companies and 15 research institutions that are doing leading-edge chip design in Asia. I demonstrate that "pull" and "policy" factors explain what attracts design to particular locations. But to get to the root causes that shift the balance in favor of geographical decentralization, I examine "push" factors, i.e. changes in design methodology ("system-on-chip design") and organization ("vertical specialization" within global design networks). The resultant increase in knowledge mobility explains why chip design - that, in Pavitt's framework is not supposed to move - is moving from the traditional centers to a few new specialized design clusters in Asia. A completely revised and updated version has been published as: " Complexity and Internationalisation of Innovation: Why is Chip Design Moving to Asia?," in International Journal of Innovation Management, special issue in honour of Keith Pavitt, Vol. 9,1: 47-73.

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Bibliographic Info

Paper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 64.

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Length: 37 pages
Date of creation: Nov 2003
Date of revision: Mar 2004
Handle: RePEc:ewc:wpaper:wp64

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References

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  1. Amsden, Alice H. & Tschang, F. Ted, 2003. "A new approach to assessing the technological complexity of different categories of R&D (with examples from Singapore)," Research Policy, Elsevier, vol. 32(4), pages 553-572, April.
  2. Arora, Ashish & Gambardella, Alfonso, 1994. "The changing technology of technological change: general and abstract knowledge and the division of innovative labour," Research Policy, Elsevier, vol. 23(5), pages 523-532, September.
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Cited by:
  1. Dieter Ernst, 2004. "Searching for a New Role in East Asian Regionlization: Japanese Production Networks in the Electronics Industry," Economics Study Area Working Papers 68, East-West Center, Economics Study Area.
  2. Eduardo da Motta e Albuquerque & Gustavo Britto & Otávio Silva Camargo & Glenda Kruss, 2011. "Global interactions between firms and universities: Global Innovation Networks as first steps towards a Global Innovation System," Textos para Discussão Cedeplar-UFMG td419, Cedeplar, Universidade Federal de Minas Gerais.
  3. Gregory Tassey, 2010. "Rationales and mechanisms for revitalizing US manufacturing R&D strategies," The Journal of Technology Transfer, Springer, vol. 35(3), pages 283-333, June.
  4. Ernst, Dieter & East-West Center (ed.), 2006. "Innovation Offshoring:Asia's Emerging Role in Global Innovation Networks," Economics Study Area Special Reports, East-West Center, Economics Study Area, volume 10, number ewcsreport1.
  5. E. Fabio Arcangeli & Giorgio Padrin, 2004. "Endogenous space in the Net era," ERSA conference papers ersa04p438, European Regional Science Association.
  6. Brown, Clair & Linden, Greg, 2005. "Offshoring in the Semiconductor Industry: Historical Perspectives," Institute for Research on Labor and Employment, Working Paper Series qt0wv0k78t, Institute of Industrial Relations, UC Berkeley.
  7. Brown, Clair & Linden, Greg, 2007. "Semiconductor Engineers in a Global Economy," Institute for Research on Labor and Employment, Working Paper Series qt6fr9b2p9, Institute of Industrial Relations, UC Berkeley.
  8. Boy Luethje, 2004. "Global Production Networks and Industrial Upgrading in China: The Case in Electronics Contract Manufacturing," Economics Study Area Working Papers 74, East-West Center, Economics Study Area.
  9. Jayan Jose Thomas, 2008. "Innovation in India and China : Challenges and Prospects in Pharmaceuticals and Biotechnology," Development Economics Working Papers 22518, East Asian Bureau of Economic Research.
  10. Dieter Ernst, 2008. "Innovation Offshoring and Asia's 'Upgrading through Innovation' Strategies," Economics Study Area Working Papers 95, East-West Center, Economics Study Area.
  11. Squicciarini, Mariagrazia & Loikkanen, Torsti, 2008. "Going Global: The Challenges for Knowledge-based Economies," MPRA Paper 9663, University Library of Munich, Germany.

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