Henry Wai-Chung Yeung - Interconnected Worlds (Innovation and Technology in the World Economy)

Innovation and Technology in the World Economy

MARTIN KENNEY, EDITOR

University of California, Davis and Berkeley Roundtable on the International Economy

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Interconnected Worlds

GLOBAL ELECTRONICS AND PRODUCTION NETWORKS IN EAST ASIA

Henry Wai-chung Yeung

STANFORD BUSINESS BOOKS

An Imprint of Stanford University Press

Stanford, California

STANFORD UNIVERSITY PRESS

Stanford, California

2022 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved.

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Printed in the United States of America on acid-free, archival-quality paper

Library of Congress Cataloging-in-Publication Data

Names: Yeung, Henry Wai-chung, author.

Title: Interconnected worlds : global electronics and production networks in East Asia / Henry Wai-chung Yeung.

Other titles: Innovation and technology in the world economy.

Description: Stanford, California : Stanford Business Books, an Imprint of Stanford University Press, 2022. | Series: Innovation and technology in the world economy | Includes bibliographical references and index.

Identifiers: LCCN 2021043940 (print) | LCCN 2021043941 (ebook) | ISBN 9781503615298 (cloth) | ISBN 9781503632226 (paperback) | ISBN 9781503632233 (ebook)

Subjects: LCSH: Electronic industriesEast Asia. | GlobalizationEconomic aspectsEast Asia. | Business networksEast Asia.

Classification: LCC HD9696.A3 Y48 2022 (print) | LCC HD9696.A3 (ebook) | DDC 338.4/7621381095dc23

LC record available at https://lccn.loc.gov/2021043940

LC ebook record available at https://lccn.loc.gov/2021043941

Cover art: Shutterstock | Eugenius777

Cover design: Tandem Design

Typeset by Newgen in Galliard 10/14

For Yeung Ching Kwong, my late father and Peter Dicken, my mentor and fatherly figure

Contents

Illustrations

Tables

Figures

Preface

The global electronics industryglobal electronics in shortis certainly one of the most innovation-driven and technology-intensive sectors in the contemporary world economy. The COVID-19 pandemic in 2020 and 2021 made us all deeply aware of the critical importance of various electronic devices in supporting our remote work, learning, and daily life, and their intricate production across the world. Indeed, global electronics is characterized by organizationally fragmented and geographically dispersed production networks. Many devices and products in todays information and communications technology (ICT) sector are developed and manufactured in several macroregions and yet sold worldwide in all end markets. From semiconductor chips powering these devices to end products such as personal computers, smartphones, and televisions, complex transnational production and value-generating activitiescoordinated by lead firms through their in-house facilities and/or outsourced partners around the worldhave integrated diverse macroregions and national economies worldwide into what might be termed the interconnected worlds of global electronics.

Using the motif of worlds to describe the predominant model(s) of organizing electronics production, I argue that the current era of interconnected worlds started in the early 1990s when electronics production moved from the multinational worlds of innovation and production systems dominated by domestic lead firms in the US, Western Europe, and Japan toward increasingly globalized and cross-macroregional worlds of electronics manufacturing centered in East Asiaa large region comprising Northeast Asia (e.g., China, Japan, South Korea, and Taiwan) and Southeast Asia (e.g., Indonesia, Malaysia, Singapore, and Vietnam). Over time and as more electronics manufacturing shifted toward key locations in East Asia, lead firms in the US, Western Europe, and Japan remained dominant in technological innovation and product development. By the 2010s, the books main focus, this coevolution of production network complexity and interconnectedness led to a transformative shift in global electronics through which lead firms from South Korea, Taiwan, and China emerged as key players by integrating their home macroregionEast Asiainto these interconnected worlds of global electronics production comprising predominantly the US, East Asia, and Europe.

This monograph describes and explains this coevolution of globalized electronics production centered in East Asia during the 2010s. To date, a significant body of literature has been written about the historical development of the electronics industry in specific national economies. But very few of these scholarly studies have extended their analytical coverage to the 2010s, the decade in which East Asian economies and lead firms became dominant in electronics manufacturing. In theoretical terms, this work also differs substantively from most earlier academic studies of the electronics industry, as I do not focus on individual national economies and industrial transformation