Global Value Chains in the Electronics Industry: Was the Crisis a Window of Opportunity for Developing Countries?

53 Pages Posted: 20 Apr 2016

See all articles by Timothy Sturgeon

Timothy Sturgeon

Massachusetts Institute of Technology (MIT)

Momoko Kawakami

affiliation not provided to SSRN

Date Written: September 1, 2010

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).

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

Suggested Citation

Sturgeon, Timothy and Kawakami, Momoko, Global Value Chains in the Electronics Industry: Was the Crisis a Window of Opportunity for Developing Countries? (September 1, 2010). World Bank Policy Research Working Paper No. 5417. Available at SSRN: https://ssrn.com/abstract=1676652

Timothy Sturgeon (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Momoko Kawakami

affiliation not provided to SSRN

No Address Available

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