International Production Networks in Asia: Rivalry or Riches?

International Production Networks in Asia: Rivalry or Riches? Edited by Michael Borrus, Dieter Ernst, and Stephan Haggard. London: Routledge, 2000. Pp. 267. First, the title of this book is a little misleading. While it appears to concern itself with cross-- border international production networks (IPNs) in Asia in general, this book focuses almost entirely on IPNs in the electronics industry in the Pacific Asia region. That minor quibble aside, this volume provides an illuminating and valuable insight into the way IPNs have developed in what is arguably East Asia's single most important industrial sector. Indeed, as the editors point out, the electronics sector spans a wide spectrum of sub-industries, and this study is "thus able to capture a great variety of sectoral characteristics". For example, U.S. firms tend to be strong in industrial electronics, while Japanese and Korean firms are strong in consumer products, and Singapore and Taiwan firms tend to specialize in PC electronics. Further, the editors contend that they "expect the industrial practices characteristic of [the] electronics [industry] are likely to diffuse to other sectors". Commencing in the mid-1980s, cross-- border IPNs in the electronics industry are relatively new, compared with IPNs in the garments, footwear, furniture, and toy industries that date from more than a decade before. Nonetheless, by the 1990s, the electronics sector had become the most important sector for both U.S. and Japanese investment in Pacific Asia. The first two chapters of this edited volume provide a solid grounding in the development of IPNs in the region, and the extent to which they have become an integral part of the industrial integration of Pacific Asia, as well as the corporate strategies of electronics firms in the region. The six following chapters then provide specific case studies: the resurgence of U.S. electronics firms in the region; the IPNs of Japanese electronics firms; the "Taiwanese model" in the computer industry; the IPN network of Samsung Electronics; the growth of Singapore's electronics industry; and Japanese and U.S. electronics companies in Malaysia. A final chapter discusses the degrees to which the forces of globalization have reshaped IPNs in the region. Four main themes are identified in the book. The first is that IPNs tend to be created to "access locational advantages ... with the increasingly specialized technology, skills and know-how that are resident" at each network node. The second is that the variety of IPNs differs greatly, and that these differences are "ultimately rooted in national systems of production and innovation", as exemplified by the various case study chapters. The example of Cisco is illustrative, as a company that does not own its manufacturing capacity, nor even possess its own central corporate laboratory for conventional R&D. Instead, Cisco's products are "assembled entirely by independent 'turnkey' contract manufacturers in California and Asia from components and manufacturing services that flow from a variety of independent suppliers throughout Asia and the United States". While contractual arrangements between Cisco and these various suppliers exist, actual equity ownership links do not. And as a result, such IPNs have shifted organization foci "from the legal entity known as the firm to the contractual network of firms tied together by mutual long-term interest", to quote John Stopford. From an even wider perspective, Pacific Asia is "increasingly organized and integrated at the level of corporate organization", which has "important implications for both the political economy of the region and the trade and investment policies of particular countries". A third theme is that IPNs generate "important competitive consequences, particularly in technology-intensive sectors such as electronics". …