Export-Led Technology Development in the Four Dragons: the Case of Electronics Mike Hobday
Export-led Technology Development in the Four Dragons: The Case of Electronics
Mike Hobday
ABSTRACT
To date, little attention has been paid to the strategies of local firms in bringing about industrialization in East Asia. This article focuses on the methods by which domestic firms utilized foreign connections to overcome technology and market bamers in electronics. A simple market-technologymodel is developed as a first approximation of how domestic technology assimilation relates to export marketing in the four ‘Dragons’ of East Asia (South Korea, Taiwan, Hong Kong and Singapore). It proposes that export demand shaped the pace and pattern of technological progress in electronics in each of the four Dragons. Historical evidence shows that each country used a distinctive mix of direct and indirect export mechanisms to acquire technology and to enter international markets. Foreign buyers, transnational corporations (TNCs), original equipment manufacturer (OEM) arrangements, joint ventures and licensing deals were exploited by ‘latecomer’ firms to their market and technology advantage. Asian firms progressed from simple assembly tasks to more sophisticated product design and development capabilities, travelling ‘backwards’ along the product life cycle of traditional innovation models. Today, leading Asian firms invest heavily in R&D and engage in partnerships with TNCs to acquire and develop advanced new electronics technologies. The technological progress of latecomers remains closely coupled to export demand through OEM and other institutional arrangements.
INTRODUCTION
Following Japan, the four ‘Dragons’or newly industrializingcountries (NICs) of East Asia (South Korea, Taiwan, Hong Kong and Singapore) have made remarkable economic and technological progress’. During the 1980s, the
Research for this article was funded by the Economic and Social Research Council (ESRC) of OO the UK, grant reference R O 23 3116. The author is grateful to Prof. Yao-Su Hu,
Mike Hobday
ABSTRACT
To date, little attention has been paid to the strategies of local firms in bringing about industrialization in East Asia. This article focuses on the methods by which domestic firms utilized foreign connections to overcome technology and market bamers in electronics. A simple market-technologymodel is developed as a first approximation of how domestic technology assimilation relates to export marketing in the four ‘Dragons’ of East Asia (South Korea, Taiwan, Hong Kong and Singapore). It proposes that export demand shaped the pace and pattern of technological progress in electronics in each of the four Dragons. Historical evidence shows that each country used a distinctive mix of direct and indirect export mechanisms to acquire technology and to enter international markets. Foreign buyers, transnational corporations (TNCs), original equipment manufacturer (OEM) arrangements, joint ventures and licensing deals were exploited by ‘latecomer’ firms to their market and technology advantage. Asian firms progressed from simple assembly tasks to more sophisticated product design and development capabilities, travelling ‘backwards’ along the product life cycle of traditional innovation models. Today, leading Asian firms invest heavily in R&D and engage in partnerships with TNCs to acquire and develop advanced new electronics technologies. The technological progress of latecomers remains closely coupled to export demand through OEM and other institutional arrangements.
INTRODUCTION
Following Japan, the four ‘Dragons’or newly industrializingcountries (NICs) of East Asia (South Korea, Taiwan, Hong Kong and Singapore) have made remarkable economic and technological progress’. During the 1980s, the
Research for this article was funded by the Economic and Social Research Council (ESRC) of OO the UK, grant reference R O 23 3116. The author is grateful to Prof. Yao-Su Hu,
References: and Strategic Management 3(4): 439-53. Fortune (1991) 7 October, Special Report ‘The Growing Power of Asia’. Fransman, M. and K. King (eds) (1984) Technological Capability in the Third World. London: Macmillan