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The Internet's Effects on Global Production Networks: Challenges and Opportunities for Managing in Developing Asia

Listed author(s):
  • Dieter Ernst


    (Economics Study Area, East-West Center)

Placing global production networks (GPN) on the Internet poses a fundamental challenge, but also creates new opportunities for managing in Developing Asia. Network flagships can now select best-performing suppliers on a global scale, increasing the pressure on Asian suppliers. But the transition form EDI to the Internet may also provide new opportunities for Asian suppliers, by reducing barriers to network entry, and by enhancing knowledge diffusion. A conceptual framework is introduced to assess how the Internet reshapes business organization and GPN. That framework is applied to one of the role models of managing in Asia, Taiwan's Acer Group. The paper highlights a vicious circle that must be broken to reap the benefits of the Internet: Asian firms must reduce a huge efficiency gap between manufacturing and the management of supporting digital information systems (DIS). The challenge is to embrace the Internet as flexible infrastructures that support not only information exchange, but also knowledge sharing, creation and utilization. The Internet facilities this task: it provides new opportunities for the outsourcing of mission-critical support services.

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Paper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 33.

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Length: 22 pages
Date of creation: Aug 2001
Handle: RePEc:ewc:wpaper:wp33
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  1. Dieter Ernst & Paolo Guerrieri, 1998. "International production networks and changing trade patterns in East Asia: The case of the electronics industry," Oxford Development Studies, Taylor & Francis Journals, vol. 26(2), pages 191-212.
  2. Ernst, Dieter & Ravenhill, John, 1999. "Globalization, Convergence, and the Transformation of International Production Networks in Electronics in East Asia," Business and Politics, Cambridge University Press, vol. 1(01), pages 35-62, April.
  3. George B. Richardson, 1996. "Competition, Innovation and Increasing Returns," DRUID Working Papers 96-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  4. Dieter Ernst, 2000. "Inter-Organizational Knowledge Outsourcing: What Permits Small Taiwanese Firms to Compete in the Computer Industry?," Economics Study Area Working Papers 01, East-West Center, Economics Study Area.
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