The Industrialisation Process of Asian Small and Medium Firms
AbstractNational governments throughout the Asia-Pacific Region have identified small and medium enterprises as an important source of economic growth and employment. In the past, SME business strategies have focused on production, relying on their subcontracting and sales contacts with large firms for technological innovation and marketing and on abundant domestic labour forces for comparative advantage. Recently, structural problems in the region arising from the Japanese recession, currency appreciation and rising labour costs have upset these relationships forcing SMEs to move offshore (DFI) to restore cost competitiveness and to upgrade their internal technological and organisational capacities to international standards in order to compete for contracts within more open, international markets. This paper analyses this process of change, analysing the development of SMEs within four Asian countries using a six stage evolutionary model. The majority of SMEs in these countries are still in the earlier second (dependency) or third (internalisation) stages. The more advanced SMEs have moved into the fourth (externalisation) stage, where firms develop independent technology and marketing capacities. To the extent that localisation (stage five) had occurred, it involved local embedded relationships which had limited scope for further internationalisation. Little evidence of regional integration or networking among SMEs was found.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp00-10.
Length: 27 pages
Date of creation: 2000
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
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Asia-Pacific; industrialisation process; Asian small and medium enterprises;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-03 (All new papers)
- NEP-ENT-2002-04-03 (Entrepreneurship)
- NEP-IFN-2002-04-03 (International Finance)
- NEP-MIC-2002-04-03 (Microeconomics)
- NEP-SEA-2002-04-03 (South East Asia)
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