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Internationalisation of Innovation: Why Chip Design Moving to Asia


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  • Dieter Ernst

    (Economics Study Area, East-West Center)


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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Cited by:
  1. 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.
  2. 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.
  3. 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.
  4. Leonardo Costa Ribeiro & Glenda Kruss & Gustavo Britto & Ricardo Machado Ruiz & Américo Tristão Bernardes & Eduardo da Motta e Albuquerque, 2012. "Unveiling Global Innovation Networks," Textos para Discussão Cedeplar-UFMG 463, Cedeplar, Universidade Federal de Minas Gerais.
  5. 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.


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