This book analyses the dynamics of international production location and trade. These dynamics are being driven by new technologies (such as microelectronics) and the independent emergence of large low wage countries such as China. We see a battle between cheap robots and cheap human labour in the next few decades. To analyse this tension, we have chosen to study three industries: Garments and Textiles; Semiconductors and Automobiles. In each industry, we consider the options and prospects of high, middle and low income ...
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This book analyses the dynamics of international production location and trade. These dynamics are being driven by new technologies (such as microelectronics) and the independent emergence of large low wage countries such as China. We see a battle between cheap robots and cheap human labour in the next few decades. To analyse this tension, we have chosen to study three industries: Garments and Textiles; Semiconductors and Automobiles. In each industry, we consider the options and prospects of high, middle and low income countries. At the centerpiece of the sectoral analyses are quantitative modeling exercises. The quantitative assessment of technology choice and competitive dynamics is based on extensive interviews with industry experts in the United States, Japan and Korea. The models are tightly focused on specific products, stages of production and technologies. This allows us to examine possibilities such as: cutting and marking women's dress using automated technologies in a high wage country, sewing in a low wage country using manual or semi-automated technologies and finishing the product in a high wage country. We are also able to study response times under different production scenarios. In order to understand technology choice, we have also closely studied the institutional and strategic environment. For example, in the semiconductor industry the pricing strategies of incumbent firms have been important in the attractiveness of entry to latecomers. Strategic alliances have an impact on the cost and availability of technology. The major contribution of the book is a projection of international competitive abilities in three very different production sectors on the basis of a core quantitive cost analysis and combined with sector-specific industrial organization and trade regime characteristics.
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