Inteligencia Emocional Intrapersonal

2.4.1 National Economies in East Asia

It was only after the 1980s that the rapid industrialisation and regional development of East Asia attracted the world’s attention. There was a particular interest in how the East Asian NIEs (Newly Industrialising Economies: South Korea, Taiwan, Hong Kong, Singapore), the ASEAN countries (especially Thailand, Malaysia and Indonesia) and China were able to achieve such remarkably high rates o f economic growth. Explanations have often emphasised domestic political factors such as the combination of selective state intervention with neo-liberal orientations (free trade, division of labour, accumulation of capital and technologies, etc.) (World Bank 1993), institutional development (Aoki, Kim and Okuno-Fujiwara, 1997), and the role o f the developmental state (on Japan see Johnson, 1982; on South Korea see Amsden, 1989; on Taiwan see Wade, 1990).

While the above studies concentrate on each country’s individual economic base, there has also been a growing interest in the search for the causes o f the region’s broader economic dynamism, as illustrated by the revision o f the so-called "flying geese" model/ In East Asia, industrial upgrading from labour-intensive to capital- and technology-intensive industries has occurred within Japan and the East Asian NIEs. The original ‘flying geese’ model suggests that there is a clear pattern of industrial development: (1) the diffusion of new products begins with importation from advanced countries into less industrial countries; (2) techniques and capital goods are imported and the less industrialised countries acquire their own capital goods industries; (3) there is a growth o f domestic production because of the increase of domestic demand; (4) the less industrialised countries develop export capability. These processes are metaphorically named according to the pattern of ‘flying geese’.

While this model focuses on the industrial development processes based on relations between national economies as the central unit, micro study (product cycle theory) suggests that productive innovation takes place in high-income countries, and that there are three stages in industrial upgrading: (1) the introductory or innovative stage; (2) the maturing or process development stage; (3) the standardised or mature stage. International production is important for firms seeking to maintain a monopolistic position and market access. This corporate strategy has become a central feature of the world economy.

However, the above models may not be applicable to the experience o f the NIEs. Both expect the maturity o f domestic consumption, but in the case of East Asia the stage of production for domestic consumption has often been skipped, and the starting-point has been export-led industrialisation. The production and sales activity of MNCs through FDI has accelerated both intra-industrial and intra-firm trade in East Asia, and has contributed greatly to the emergence o f dynamic sub-national and cross-border micro-regions.

2.4.2 The New International Division o f Labour

In effect, the emergence of micro-regions reflects the patterns of what has been called the new international division of labour (NIDL). This concept was originally based on dependency theory, as applied, for example, to the study of trade relations between Latin America and the rest of the world.6 It was first suggested by German scholars investigating patterns of manufactured exports from the Third World in the 1970s. Rising production costs and the intensification of competition forces firms to invest in low-cost areas. In East Asia, the role o f special economic zones (SEZs) and export processing zones (EPZs) is critical in that they have been able to attract FDI and to connect with capital and advanced technology. (This is a particularly important factor in the case of southern China.) The combination seems to be sufficient to explain East Asian economic growth. However, the East Asian NIDL is by nature more of a regional division o f labour, as exemplified by the cases of Hong Kong and Singapore. Furthermore, the role of foreign firms is not the same in all the East Asian NIEs. For example, as Appelbaum and Henderson (1992) observe, the NIDL applies to Singapore, where foreign firms overwhelmingly dominate; in Taiwan, foreign firms are in a minority; in South Korea, indigenous chaebols (conglomerates) dominate, and Hong Kong’s economic growth was triggered by smaller local manufacturing firms. Nevertheless, the theory of the NIDL is useful in highlighting the role of FDI from advanced countries as well as the development of technology and the division o f production processes.

2.4.3 International Commodity Chains

Any attempt to understand the changing patterns of the regional division of labour in the age of post-Fordism (see Section 2.2 above) requires a consideration of the organisation of production in the global manufacturing system. The concept of an international commodity chain (ICC) provides a useful insight for understanding both productive and spatial

interdependencies, and helps to explain how peripheral countries are linked to the global market (GereHi and Korzeniewicz, 1994). The concept refers to a network of labour and production processes whose end result is a finished good (Hopkins and Wallerstein, 1994). The global commodity chains approach highlights the role of producer-driven and buyer-driven chains in creating overlapping and at times conflicting regional divisions of labour.7 Producer-driven and buyer-driven chains are founded on different types of production and trade networks, are driven by different kinds of lead firms, incorporate different sets of countries into their regional hierarchies, and have different consequences for industrial upgrading in East Asia’s sub-regions (including sub-national regions in China).* Thus, economic development through export-led industrialisation in Japan, the NIEs, the ASEAN countries and now China is part of the broader processes of globalisation The NIDL has been modified to a more regional and hierarchical division of labour within East Asia, a division o f labour which in turn is characterised by the central role of certain key geographical micro-regions. Moreover, the commodity chains approach seeks to transcend 'the increasingly sterile debate about the role of states versus markets, and to come to grips with new trends in the organization o f production on a world scale’ (Gereffi, 1996).

The role of exporting is very important in the commodity chains approach. According to Gereffi, there are five major export roles: (1) primary product exports, including processed ‘industrial commodities’ and non-traditional agricultural exports; (2) the export-oriented assembly of traditional manufactured goods, such as clothing and electronics goods, using imported components; (3) the production of components for export in relatively advanced industries, such as automobiles and computers, using substantial local inputs; (4) original equipment manufacturing (OEM), whereby contractors make goods to be sold under another firm’s brandname; and (5) original brandname manufacturing (OBM), whereby manufacturers make products for export and sale under their own label. ’ The East Asian NIEs succeeded in upgrading their industrial base from the 1960s to the 1990s, and in the

1990s they focused on components supply manufacturing, i.e. OEM and OBM.

In this context, it is important to understand the roles o f NIEs in relation to the commodity chains, especially through their links with Japan. East Asian NIEs have undertaken the following roles: (1) a commodity-export role; (2) a commercial-subcontracting role, using imported components from Japan; (3) an exports-platform role, using Japanese FDI; (4) a

components supplier role, acquiring OEM from Japanese manufacturers; and (5) an independent exporter role, using original brandnames.1" Industrialisation in East Asia, therefore, is the result of an integrated system of global production and trade, supported by new forms o f investment and financing, and promoted by specific government policies. Thus, the processing trade arrangements (PTAs) between China and Japan are in the phase of the export-oriented assembly of manufactured goods, using imported components.

The spatial agglomeration of industry, which is a key characteristic of the NIDL, is linked to both groups of vertically related firms (i.e. a chain of suppliers) and horizontally related firms (i.e. similar firms competing within the same industry), and according to Marshall, it has three major dimensions: (1) it provides a pooled market for workers with specialised skills; (2) it facilitates the development of specialised inputs and services; and (3) it enables firms to benefit from knowledge spill-over '' For example, in the case of southern China, there are various ways in which patterns of industrial agglomeration in the province of Guangdong are linked to the development of commodity chains: for example, through the expansion o f FDI from Japan and the NIEs, the development of intra-regional trade, the transformation o f industrial location structures, export-oriented strategies, and the development of market access. In turn, all of these shifts are related to the need to promote industrial organisation in order to benefit from optimal supply and output. These trends are well illustrated by the case of the electronics industry from the developed countries to the peripheral areas, and this change has been the most significant cause of East Asia’s impressive regional economic development.