The dominance of SMEs: a source of flexibility

SMEs have been the main carriers of Taiwan’s rapid development and remain important today. In 1993, SMEs accounted for 96 percent of the total number of companies, 69 percent of total employment, and 55 percent of Taiwan’s manufactured exports (Chen et al. 1995). Taiwan today is home to more than 4, 000 electronics firms that produce a broad mix of PC-related products and electronic components. With a few exceptions, such as the Tatung group,...

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Firm-specific

Finally, firm-specific features also play an important role in shaping the organization of international production; I focus here on two: size and strategic focus. One of the peculiar features of Japan’s international production networks in electronics is the substantial role played by small and medium-sized enterprises (SMEs).21 SMEs have higher OPRs than their large, vertically integrated counterparts. This is true for smaller...

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The Taiwanese model in the computer industry

It would seem self-evident that small companies would not be competitive in a knowledge-intensive industry that is highly globalized.1 Small firms, by definition, have limited resources and capabilities and thus are unlikely to possess substantial ownership advantages. They also have a limited capacity to influence and shape the development of markets, market structure, and technological change. One would thus expect SMEs to be ill-equipped...

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A move towards systemic rationalization

Confronted with drastic changes in technology as well as in its major markets, the Japanese electronics industry is undergoing a period of turmoil. Two fundamental changes in technology are upsetting prevailing market structures. First, digitalization implies that performance features of consumer devices are defined by integrated circuits, with the result that market leadership positions based on analog technology can no longer be taken for...

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Explaining Japanese production networks in Asia

Why have Japanese electronics firms adopted a different approach to the organization of their Asian production networks than American and European firms? And why have they organized their Asian production networks differently from their production networks in North America and Europe? I suggest that nationality of ownership does matter, and can be traced to definable institutional features of the Japanese production system, particularly the absence...

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