Searching for a New Role in East Asian Regionalization - Japanese Production Networks: Archived Project

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THIS RESEARCH PROJECT IS NOT CURRENTLY ACTIVE.

 

The electronics industry has been a trailblazer and test bed for East Asian regionalization. Since the 1970s, Japanese firms have been a major source of capital, components and machinery, as well as strategic management models. A persistent recession in the industry, however, has given rise to far-reaching adjustments in the region’s trade and investment patterns and in the development trajectories of regional electronics industries. The traditional “flying geese” model of economic interactions between Japan and East Asia has clearly come to an end as a unifying force of regionalization. But what new forces will shape East Asia’s future regional development patterns?

 

 

This project explored how Japanese electronics firms have transformed their Asian production networks over the past decade and how this is affecting East Asian regionalization in the industry. Research shows that, far from withdrawing from East Asia, Japanese corporate capital in the electronics industry now critically depends on the region, not only as a global export production base, but also as a major and increasingly sophisticated market for its products, services, and technology. This explains why Japanese electronics firms are searching for ways to expand and upgrade their regional production networks, with a particular focus on China.

 

 

The project sought to explain why Japanese firms are finding it difficult to make the adjustments in organization and management that are necessary to expand and upgrade their regional production networks. Research examined peculiar features of the Japanese network management model in East Asia that once may have reflected strength but now have turned into systemic weaknesses: dispersed location driven by risk minimization; Japan-centered sales destination and a neglect of local market characteristics; a limited capacity to tap the creativity of non-Japanese skilled workers, engineers, and managers; and a reluctance to outsource research and development. A central finding was that competition between distinct national business models is no longer the dominant determinant of East Asian regionalization. The dichotomy “Americanization versus Japanization” that shaped the earlier literature is insufficient to capture what is really happening. More important are fundamental transformations in the organization of international business: Firms of diverse nationality compete and collaborate within multi-layered global “networks of networks” in marketing, production, and innovation. Equally important is the rise of China as a global export production base, as a sophisticated growth market, especially for mobile communications and digital consumer devices, and as a new source of research, development, and innovation. Both forces combine to produce increasingly complex processes of regionalization. Economic interactions within the region, such as trade, investment, and competitive strategies, have moved beyond a “short causal” chain, where causes and effects are easy to disentangle and where it is possible to name names and to develop effective responses. Identifying, monitoring, let alone “controlling” the transformational actors and mechanisms by nationality has become much more difficult.

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