Industrial Upgrading

– The aim of this paper is to formulate strategies for Shaanxi Aviation Industrial Upgrading (SXAIU). First, a two-level index system was established by combining literature analysis and Delphi methods, which includes the key success factors and external driving forces affecting Shaanxi aviation industry (SXAI). After that, by using the Theory of Inventive Problem Solving (well-known as TRIZ), these key factors were translated into critical problems and strategies were formulated to settle them. This study contributes in two ways. On the one hand, it could help to administrators of SXAI to adopt the short term strategies primarily and implement medium and long term strategies according to their own 3-to 5-year goals. On the other hand, the strategies established in this study are more operational and decision-making process is more transparent and scientific. Therefore, other industries in Shaanxi and other provinces can also adopt strategies developed in this study.

Although Thailand’s electronics industry has been considered as one of the strategic sectors, the evidence in this article shows that it is dominated by midstream and downstream activities. Despite accounting for a quarter of electronics exports, semiconductors manufacturing is confined to low value-added activities. The lack of industrial policy
has restricted technological upgrading in the industry. Upgrading efforts made by both public and private initiatives have so far failed. The case studies show that firms in Thailand must acquire and develop technological capabilities to stimulate the industry’s transformation from low-to-high value-added activities.

The paper examines contributions of technology upgrading and innovation policies on industrial catching-up of manufacturing industries in two East Asian countries, namely, Thailand and Taiwan. Thailand represents a country facing middle-income trap, while Taiwan represents a former developing country turning into a high-income economy. Ability of governments to design and implement policies which co-evolve with the countries’ level of economic development and technological capabilities of firms, policy commitment and learning, understanding of policy makers on firms’ innovation and countries’ innovation system, and availability of supporting policies and institutions are key factors differentiating the performance of the two countries.

This paper explores convergence innovations in resource-based industries by conducting a case study of the Thai seafood industry. It adopts the concept of sectoral innovation system as its framework. Through in-depth interviews with representatives from firms and other actors in the system, as well as a technology foresight workshop, the study reveals that there were several product innovations, namely, branded ready-to-eat, ready-to-cook, and frozen products based on Thai, Oriental, Western, and fusion recipes. These innovations were the results of changing demand conditions as well as an integration of knowledge and expertise from science, social science, art, and the services industry. These innovations were achieved through R&D departments having personnel from various disciplines, in addition to interaction between R&D and other departments within firms. In several cases, firms leveraged external knowledge through collaboration with local universities and public research institutes. The study finds that in order for convergence innovation to occur, firms must be proactive in their approach to acquiring and creating new knowledge in their industry. Convergence innovation also requires a strong, coherent sectoral innovation system to be in place.

This paper examines the recent technological performance of Afghanistan, Kyrgyzstan and Tajikistan and identifies opportunities for their technological and industrial upgrading in the context of the current global technological trends. The manuscript develops a three-pronged industrial upgrading strategy centered on the application of information and communication technologies, along five core value chains based on the existing mining, energy and agricultural sectors of these economies and discusses various government policies in support of this modernization programme.

World Development 27(9): 1651-71 1999.

This paper examines the case of adjustment in a labor-intensive export industry (woolen knitwear) to understand how traditional sectors in developing regions cope with external crises and rise above them. India's woolen knitwear industry, concentrated in Ludhiana, recently survived two crisesÐthe collapse of its largest export market (the former Soviet Union), and the simultaneous opening up of the domestic market to freer trade. After an unusually short downturn, the cluster not only recovered rapidly, but is increasingly diversifying into more demanding and competitive external markets. Four factors are key to explaining this surprisingly resilient recovery. First, the best performing ®rms had a strong and simultaneous presence in dynamic segments of the domestic market alongside exports. This generated key organizational learning, and built managerial and production capacities that helped ®rms adapt quickly to more demanding markets later. Second, an important feature of the learning relationship between ®rst-time exporters and their foreign buyers was the small-scale nature of contracts and a ``customization of ®t'' between the producer and the feedback-giving intermediary. Third, better performing ®rms paid equal if not greater attention to making organizational changes in their work practices than to the purchase of new equipment. Fourth, the embedded nature of production networks, and the government's past programs to assist local ®rms have indirectly helped create a dynamic middle-tier of locally-rooted exporters who appear to be leading the cluster's transformation and modernization.

O objetivo geral desta pesquisa de dissertação é analisar quais foram as políticas de upgrade industrial adotadas pela República Popular da China, especialmente a partir de 2001 até os dias atuais, que favoreceram o rápido processo de catch-up tecnológico em diversos
segmentos industriais na China continental. O progresso tecnológico foi uma das principais razões que elevaram a produtividade do trabalho na China continental, e possibilitou que a China saísse da condição de país de renda baixa na década de 80, para alcançar a condição de país de renda média atualmente. A dissertação conclui que a razão pelo sucesso está associada à capacidade do estado desenvolvimentista chinês de não só emular a fórmula adotada pelos seus vizinhos asiáticos, Coreia e Taiwan, estimulando o desenvolvimento tecnológico doméstico, mas também adotar diversas políticas agressivas de assimilação de tecnologia estrangeira, e proteção à indústria doméstica, contrariando o Consenso de Washington.

This paper highlights how Thailand upgrades its positions in global value chains in high-tech, mid-tech and low-tech industries represented by electronics, automotive and frozen seafood, respectively. In the electronics industry, there are not many capable firms in the upstream segment like semiconductors. Nevertheless, transnational corporations in segment like hard disk drive began to invest in process R&D and collaborate more with local suppliers, universities and public research institutes in human resource and technological development. In the automotive industry, several Japanese car manufacturers such as Toyota, Honda, Nissan, and Isuzu set up R&D/Technical centres in Thailand since 2000s. This prompted Japanese and local part suppliers to also invest more in engineering, design and development activities. Some local universities offer as well engineering programmes specifically targeting the automotive industry. In the frozen seafood industry, several Thai firms have developed new ready-to-eat products, own brands and international distribution networks. They started to become transnational corporations investing in both developing and developed countries.

This study aims at analyzing the production structure of the automotive industry in Turkey from the perspectives of Global Production Networks. Automotive industry has been considered as the chief industry in the process of industrialization for most of the developing countries. For that purpose, many economies have tried to find a way in order to be articulated into global automotive networks since 30 years. But once it has been succeeded, some of the economies faced with new issues, such as imported input dependency, current account deficit and vulnerability to global economic shocks. In order to overcome these kinds of macroeconomic problems, industrial upgrading is suggested as a vital tool for a country in order to increase its value-added in an integrated production structure. In this study, industrial upgrading of Turkey is evaluated by using both firm-specific information and country-specific trade data. In doing so, it is aimed to shed light competitive and comparative advantages of Turkish automotive industry. By taking into consideration “relative” specialization patterns of firms in the assembly and supply industry, this study tries to evaluate Turkey’s position in European automotive industry division of labor.

China became the world's largest market for industrial robots in 2013. The robotic revolution gained pace and occurred after the 2008 financial crisis as many export-oriented firms coped with dwindling orders, rising labour costs and growing concerns over occupational safety. Unlike workers in the Global North who experienced automation in the 1960s and 1970s against a backdrop of strong union activism, whether semi-proletarian peasant-workers in China ultimately enjoy the 'beneficial' effects of industrial upgrading is questionable. However, very little social science research has investigated how automation, in light of the negative consequences of unemployment and deskilling, can continue to be advanced. Drawing on Beverley Silver's concept of workers' power, this article explores how workers' marketplace and workplace bargaining

This paper evaluates whether inward foreign direct investment stimulates technological upgrading, and if its impact depends on an economy’s level of social capability. FDI inflows exert a positive influence on technological upgrading over a lengthy time period for a large and di- verse sample of countries. This effect is conditioned by an economy’s level of social capability, as well as its income. Among poor countries the effect of FDI on upgrading is bolstered for those endowed with higher levels of social capability. The effect of FDI on upgrading in rich countries remains positive but is weaker, and social capability exerts little disparate influence among these similarly socially capable economies.

What are the circumstances under which latecomer firms can develop indigenous innovative capacity and compete globally? China's construction of a vast domestic security apparatus has contributed to it becoming the world's largest supplier and consumer of video surveillance products and services. It has also produced several globally competitive companies, including those engaged in digital surveillance. Although security equipment producers initially emerged in Guangdong province, China's leading technology companies are concentrated in Zhejiang province. This comparative study is motivated by the puzzle of why Guangdong, which has a larger security equipment industry with more local investment and earlier introduction of foreign technology, has lagged behind Zhejiang in technological upgrading. We trace this provincial variation to the policy choices of local state bureaucracies and the business strategies of local enterprises. While macro-level variables such as market demand and establishing national industry standards are important for industrial development, this study demonstrates the critical role of local technocrats and entrepreneurs in facilitating technological innovation in a rapidly evolving surveillance regime. Our analysis also reveals how latecomers to a technology-intensive industry were able to adapt their products strategically to meet the technical demands of a major segment of the domestic market, China's public security sector.

World Development 26(8):1387-1411.  1998

This article traces the historical and institutional sources of small hrm
competitiveness in Ludhiana’s manufacturing sector. Four features emerge as salient: the indirect historical links and dynamics between the region’s industrial and agrarian sectors; past policies and the key role of the state in indirectly transforming the local skill base and creating
the conditions for small scale accumulation among skilled metal workers; demand surges early in the region’s industrial history; and complex ties among firms of different sizes that created a
capital-conserving, interdependent production network in the region. These processes together help explain why, despite being located hundreds of miles from any mineral or resource base, firms in this region outcompeted others in the country to dominate national markets in the
sectors in which they specialized: bicycles and parts, sewing machines and woolen hosiery.
0 1998 Elsevier Science Ltd. All rights reserved.

The globalization of the automotive industry in the last twenty years has manifested itself in a rapid increase in the assembly of automobiles and the production of automotive components and spare parts outside of the traditional centers of automotive manufacturing. On the basis of contemporary research and literature, we can distinguish two types of emerging centers of automobile manufacturing. First are potentially large domestic markets with a low level of motor vehicle ownership and rapidly growing economy such as Brazil. The second type of new automobile manufacturing center consists of the peripheries of automotive core regions such as Mexico in the case of the North American core region and Central Europe in the case of the Western European core region. These new growth centers have benefitted from their lower production costs compared to those of core regions and their geographic proximity to the largest automobile markets. These emerging centers of manufacturing have become attractive locations, especially for export-oriented manufacturing facilities operated by large transnational automotive corporations attempting to improve their global competitiveness. The purpose
of this paper is to evaluate the effect of foreign direct investment on the development of automobile production
in these three emerging regions. The paper reviews post-1990 production trends and changes in the geography of automobile production, especially new greenfield investments in the three analyzed regions. We examine changes in international trade in Brazil, Mexico and Central Europe with a focus on automobiles and automobile parts. Based on the results of our research, we determine the effects of foreign direct investment and industrial upgrading on the role of these emerging production centers in the global production system.

The middle-income trap is highly relevant for member states of ASEAN, home to a number of middle-income countries (MICs). In transitioning to high-income status, MICs must upgrade their institutional quality to reflect a higher stage of development. A key challenge in this transition, however, is institutional persistence: While a set of institutions may have been functional for growth at one stage of development, at a higher stage these same institutions may provide an impediment to further growth. In light of the success of European MICs that escaped the middle- income trap through accession to the European Union, some have put forward integration through the ASEAN Economic Community as a strategy to commit MICs to upgrading domestic institutional quality. However, as this paper shall examine, the institutional structures of the ASEAN Economic Community do not hold promise of enabling ASEAN’s upper-middle income members to escape the middle-income trap. The paper puts forward that ASEAN’s secondary (formal) institutional design is institutionally trapped by the primary (informal) institutional norms of the ‘ASEAN Way’ coupled with the persistence of the ASEAN ‘Development Gap’. This results in the institutional structures of the ASEAN Economic Community reflecting development strategies of low and lower-middle income economies. The paper concludes that for ASEAN’s upper-middle income economies, relying on the ASEAN Economic Community could project the challenges of the middle-income trap by disincentivizing reform and accentuating institutional persistence. Thus, national development strategy, rather than regional integration, is likely to remain the priority in escaping the middle-income trap.

This paper uses a Global Commodity Chain (GCC) approach to examine the transformation
of the global coffee marketing chain and its repercussions in developing countries. It focuses
on shifts that have occurred in the last two decades in the international coffee trade regime,
on regulation at the domestic level in producing countries, and on changes in corporate
strategies and consumption patterns. These are assessed in relation to the evolution of the
organisation of the chain, its mode of governance, the ownership characteristics at various
‘nodes’, and the distribution of income along the chain. The paper also explores how the
restructuring of the coffee chain has affected different groups of actors and suggests some
policy directions to address the emerging imbalances. Finally, it assesses the contribution
offered by the coffee case study to wider debates that are taking place in the GCC literature.

The globalization of the automotive industry in the last twenty years has manifested itself ina rapid increase in the assembly of automobiles and the production of automotive components and spareparts outside of the traditional centers of automotive manufacturing. On the basis of contemporary researchand literature, we can distinguish two types of emerging centers of automobile manufacturing.First are potentially large domestic markets with a low level of motor vehicle ownership and rapidlygrowing economy such as Brazil. The second type of new automobile manufacturing center consistsof the peripheries of automotive core regions such as Mexico in the case of the North American coreregion and Central Europe in the case of the Western European core region. These new growth centershave benefitted from their lower production costs compared to those of core regions and their geographicproximity to the largest automobile markets. These emerging centers of manufacturing havebecome attractiv...

This paper aims to understand the risk of upgrading strategy by analyzing the strategic coupling between the Taiwanese flat panel display (FPD) industry and its Japanese counterpart. Strategic coupling between the Taiwanese FPD industry and Japanese firms gave a critical advantage to the Taiwanese FPD industry, yet simultaneously, Taiwanese firms were forced to become technologically dependent on Japanese firms. Cost performance production strategy, global collaboration network, and adjusting Japanese technologies in the Taiwanese FPD industry are the main development mechanism of strategic coupling between Taiwanese FPD manufacturers and Japanese firms. However, this strategic coupling also has negative effects on the Taiwanese FPD industry. Namely, it has had negative effects on industrial upgrading due to the lack of long-term human resource development and in-house technology accumulation. These findings serve as an opportunity to develop a more profound theoretical framework of the industrial upgrading strategy of local firms embedded in global value chains.

Los estudios sobre cadenas de valor han focalizado su interés en la estructura de gobernanza o dirección, como la dinámica clave para identificar el funcionamiento de las industrias globales, los actores centrales y las posibilidades de crecimiento de los agentes subordinados. Recientemente, otros estudios relacionados con el diseño institucional y el poder en la cadena han sido incorporados a la literatura (Sturgeon, 2011), y en esta línea se inscribe el presente trabajo. El objetivo es discutir los límites del concepto de firma líder como agente central en la distribución de beneficios y límite para la estrategia de crecimiento de países y firmas o empresas en desarrollo.  Proponemos a discusión la siguiente hipótesis analítica. Los segmentos más rentables de la cadena presentan estructuras de organización concentradas en pocas firmas (estructuras de mercado oligopólicas) que se encuentran protegidas por barreras a la entrada relativas a la propiedad del conocimiento (innovación) y/o el acceso a activos estratégicos (canales de financiamiento, comercialización o ventajas institucionales); por lo tanto, la estrategia de upgrading para los agentes subordinados se define acotada a priori por las necesidades de reproducción y crecimiento de la firma líder.

It can be assumed that industrial upgrading combined with
the general tendency of rising wages for manufacturing workers does have
a positive effect on income growth and hence on economic rebalancing.
However, the potential for a qualitative transformation of the overall growth
model is not fully realised because strong segmentations of workforces within
Chinese enterprises persist. This is not a matter of sheer backwardness
of enterprises since such divisions are being reproduced even when companies
overhaul their production systems and introduce new production technologies.
For these reasons, the integration of migrant workers into urban
consumption patterns remains shallow—which harvests powerful social contradictions
that often erupt in industrial conflicts. Notwithstanding steady
quantitative changes, the basic contradiction of the Chinese growth model,
characterised by the build-up of huge productive resources on the one hand
and an endemic structural underconsumption on the other hand, remains
unresolved. The failure of social upgrading in Chinese industries therefore constitutes an obstacle for a profound transformation of the Chinese economy towards a more sustainable development path.

Doctoral thesis:
Project suppliers operate in temporary networks of stakeholders with limited visibility outside of the project’s dyadic relationships. Environment interpretation can reveal opportunities but also fatal risks in complex networks. Therefore, a wider view is needed for the project supplier to develop their business continuity in networks.

Environment interpretation and business continuity of project suppliers have been given limited attention in project business and industrial networks literature, especially from business opportunity and risk recognition perspectives. This research pursues an increased understanding and introduces the concept and process of network picture alignment in a temporary project’s business as a possible tool for environment interpretation and a source of business continuity in networks. The goal is to construct a framework for a project supplier’s network picture alignment in a value system. A qualitative, constructivist research design was selected to study a real life problem, and to advance the scientific knowledge in management both in international project business and in industrial marketing in networks.

The market research collects and analyses data to comprehend the significance of a business environment change in the paper industry and its influence on the paper machinery business. Thereafter, as a special case, six similar paper machinery upgrade projects from Finland to Italy are empirically studied to perceive critical factors in temporary projects. The critical factors are deductively established for the development of network picture alignment framework. The developed framework on network picture alignment is evaluated with three industrial change cases as post mortem analysis.

The market research revealed that the competitive situation among three dominant paper machinery project suppliers changed significantly between 2008 and 2012. The Austrian Andritz suffered the most from the economic downturn but they were capable of interpreting the business environment and rapidly reached the two market dominators, the Finnish Metso and the German Voith. Andritz concentrated successfully on uncertain upgrade projects and managed to change the situation in competition.

The empirical contribution was the map of the critical factors and steps to construct the framework of market-driven network picture alignment. The theoretical contribution is that a project supplier needs to critically interpret the environment and broaden their temporary projects’ and project business boundaries outside of the focal project networks for business opportunity recognition and risk reveal. Moreover, a supplier or other focal stakeholder in the value system is suggested to align its situated network picture to other stakeholders’ network pictures in dyadic, triadic and extended networked collaboration and relationships for continuous cooperation, with the constructed market-driven network picture alignment framework. In addition, network pictures are conceptually suggested to become flexible and dynamic, with marketdriven mindsets and consecutive successful network picture alignments in the context specific value system.

The business opportunity identification for a machinery upgrade requires tight interactive technical collaboration in a customer’s production process. Continuous cooperation can be reached with harmonious relationships and repetitive network picture alignments between stakeholders. However, cultural distance matters in the reach of business objectives. A project supplier’s organization and persons have to follow a market-driven mindset in context specific network picture alignment. A market-driven mindset attached to collectivistic, and entrepreneurial activities advances the business performance. Thus, a supplier can create their own path for continuous business utilizing market-driven network picture alignment framework as the core of the strategic market management in networks.

Forthcoming research should study the question “why” salience is caused in global level environment interpretation in addition to “what” and “who” cause stakeholder salience. Moreover, network picture alignments should be studied in other social interaction processes, for example in business acquisition integrations. When the situated network picture version is the focus of this research, the representationalist and mentalist alignment versions would need further understanding. As the dissertation reveals network picture dynamization and consecutive network picture alignments as features of evolving project businesses, they are suggested as topics of future research.

The purpose of this research is to investigate why Nglanggeran Tourism Village could sustain, what the efforts of Nglanggeran Tourism Village to achieve ASEAN Sustainable Tourism Award 2017. In this case, the important thing is that how a Tourism Village could be able to utilize the globalization’s opportunity so a Tourism Village can increase its added value. The concept of creative economy could be implemented in the development of Nglanggeran Tourism Village so its product may compete in globalization era. It needs the actors involvement that are the government, private’s roles and local communities. It concludes that the actor’s synergy is needed in the development of Nglanggeran Tourism Village. Besides, there is a synergy between actors in developing Nglanggeran Tourism Village, good networking and Tourism Packages could develop added value of local products to gain competitive edge in the global market.

Keywords: ASEAN Sustainable Tourism Award, Nglanggeran Tourism Village, Concept of Creative Economy, Local Communities