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Global value chains in the electronics industry : was the crisis a window of opportunity for developing countries ?

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  • Sturgeon, Timothy J.
  • Kawakami, Momoko
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    Abstract

    This paper presents evidence of the importance of electronics global value chains (GVCs) in the global economy, and discusses the effects of the recent economic crisis on the industry. The analysis focuses on how information is exchanged and introduces the concept of"value chain modularity."The authors identify three key firm level actors -- lead firms, contract manufacturers, and platform leaders -- and discuss their development, or"co-evolution"in the context of global integration. Company, cluster, and country case studies are then presented to illustrate how supplier capabilities in various places have developed in the context of electronics global value chains. The findings identify some of the persistent limits to upgrading experienced by even the most successful firms in the developing world. Four models used by developing country firms to overcome these limitations are presented: (1) global expansion though acquisition of declining brands (emerging multinationals); (2) separation of branded product divisions from contract manufacturing (original design manufacturing (ODM) spinoffs); (3) successful mixing of contract manufacturing and branded products (platform brands) for contractors with customers not in the electronic hardware business; and (4) the founding of factory-less product firms that rely on global value chains for a range of inputs, including production (emerging factory-less start-ups).

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5417.

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    Date of creation: 01 Sep 2010
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    Handle: RePEc:wbk:wbrwps:5417

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    Related research

    Keywords: Technology Industry; E-Business; Water and Industry; Markets and Market Access; Microfinance;

    This paper has been announced in the following NEP Reports:

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    1. Richard N. Langlois, 2001. "The Vanishing Hand: the Changing Dynamics of Industrial Capitalism," Economic History 0110001, EconWPA.
    2. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics.
    3. Catherine L. Mann & Jacob Funk Kirkegaard, 2006. "Accelerating the Globalization of America: The Role for Information Technology," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3900.
    4. Henry Wai-chung Yeung, 2009. "Regional Development and the Competitive Dynamics of Global Production Networks: An East Asian Perspective," Regional Studies, Taylor & Francis Journals, vol. 43(3), pages 325-351.
    5. Bonaglia, Federico & Goldstein, Andrea & Mathews, John, 2006. "Accelerated Internationalisation by Emerging Multinationals: the Case of White Goods Sector," MPRA Paper 1485, University Library of Munich, Germany.
    6. Escaith, Hubert & Lindenberg, Nannette & Miroudot, S├ębastien, 2010. "International Supply Chains and Trade Elasticity in Times of Global Crisis," MPRA Paper 20478, University Library of Munich, Germany.
    7. Imai, Ken'ichi & Shiu, Jingming, 2007. "A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China," IDE Discussion Papers 125, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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