From flying Geese to leading Dragons : new opportunities and strategies for structural transformation in developing countries

Economic development is a process of continuous industrial and technological upgrading in which any country, regardless of its level of development, can succeed if it develops industries that are consistent with its comparative advantage, determined by its endowment structure. The secret winning formula for developing countries is to exploit the latecomer advantage by building up industries that are growing dynamically in more advanced fast growing countries that have endowment structures similar to theirs. By following carefully selected lead countries, latecomers can emulate the leader-follower, flying-geese pattern that has served well successfully catching-up economies since the 18th century. The emergence of large middle-income countries such as China, India, and Brazil as new growth poles in the world, and their dynamic growth and climbing of the industrial ladder, offer an unprecedented opportunity to all developing economies with income levels currently below theirs --including those in Sub-Saharan Africa. Having itself been a"follower goose,"China is on the verge of graduating from low-skilled manufacturing jobs and becoming a"leading dragon."That will free up nearly 100 million labor-intensive manufacturing jobs, enough to more than quadruple manufacturing employment in low-income countries. A similar trend is emerging in other middle-income growth poles. The lower-income countries that can formulate and implement a viable strategy to capture this new industrialization opportunity will set forth on a dynamic path of structural change that can lead to poverty reduction and prosperity.Economic Theory&Research,Emerging Markets,Achieving Shared Growth,Labor Policies,Inequality

Barriers to the implementation of enterprise strategic transformation based on path dependence theory: the case of Jiangsu High Hope Group

With the deepening of economic globalization and the improvement of the trade structure mode, China has gradually become a global trade power, enjoying increasing space for the development of its foreign trade enterprises. However, under the comprehensive influences by external factors, China's foreign trade enterprises are faced with huge pressure to survive. Foreign trade enterprises in the new situation must continue to carry out strategic transformation in order to survive and develop. However, in the dynamic environment, the traditional enterprise strategic transformation is faced with serious path dependence, which leads to obvious inertia, which seriously hinders enterprise strategic transformation implementation and even leads to transformation failure. Existing studies only focus on enterprise strategic transformation, whereas this thesis discusses the inertial factors that hinder enterprise strategic transformation implementation from the perspective of path dependence. In other words, this thesis incorporates the theory of path dependence into the theory of strategic transformation, and probes into enterprise strategic transformation from the perspective of path dependence. Proceeding from theory and demonstration and with Jiangsu High Hope Group as the research object, this thesis studies the path dependence factors that hinder Jiangsu High Hope Group's strategic transformation implementation. Relevant suggestions on addressing path dependence barriers to the case company's strategic transformation are put forward from five aspects, namely, enterprise structure, enterprise employees, enterprise core competencies, enterprise culture and external environment, in view of the fact that the case company’s path dependence hinders its strategic transformation implementation.Com o aprofundamento da globalização económica e a melhoria do modo de estrutura comercial, gradualmente, a China tornou-se em uma potência comercial no mundo, desfrutando de um espaço cada vez maior para o desenvolvimento de empresas de comércio exterior (ECE). No entanto, sob as influências abrangentes de fatores externos, as ECE da China enfrentam uma pressão enorme para sobreviver. Na situação nova, as ECE devem continuar a realizar a transformação estratégica (TE) para sobreviver e se desenvolver. Entretanto, no ambiente dinâmico, a TE da empresa tradicional é confrontada com uma séria dependência de trajetória (DT), o que leva à inércia óbvia, o que prejudica seriamente a implementação da TE da empresa, até leva ao fracasso da transformação. Os estudos existentes concentram-se apenas na TE da empresa, enquanto esta tese discute os fatores de inércia que impedem a implementação da TE na empresa a partir da perspetiva da DT, ou seja, esta tese incorpora a teoria da DT na teoria da TE e investiga a TE da empresa a partir da perspetiva da DT. Partindo da teoria e da investigação empírica e tendo como objeto de pesquisa o Grupo Jiangsu High Hope, esta tese estuda os fatores de DT que impedem a implementação da TE do Grupo. As conclusões mais relevantes sobre como lidar com barreiras de DT para a TE da empresa em causa são apresentadas em cinco vertentes, nomeadamente, a estrutura empresarial, os colaboradores de topo de empresa, competências essenciais da empresa, cultura empresarial e o ambiente externo. Este caso lustra bem em como a DT da empresa constitui dificuldade de implementação da TE

A Region-based Business Ecosystem for Industrial Upgrading: Evidence from the Electronics Industry of Shenzhen

This dissertation explores the underlying mechanisms for the upgrading process of the electronics industry in Shenzhen. Industrial upgrading has been an international phenomenon since the globalisation of manufacturing in the late 1970s but to date no comprehensive framework has been proposed for the industrial upgrading in a region. In recent decades, the trend of manufacturing regionalisation and growing uncertainties associated with electronics products in the global market have driven regions that specialise in electronics manufacturing, such as the Chinese city of Shenzhen, to continuously adjust its industrial systems. Such adjustments are mainly based on the evolving business ecosystem they inhabit, which comprises region-specific resources that can be flexibly leveraged by players such as local firms and the government. To elucidate the interactive mechanisms among actors that facilitate industrial upgrading within the regional business ecosystem, this research integrates and extends the existing literature on industrial upgrading from global and local perspectives and applies a business ecosystem framework to address the main research question and sub-questions: How does a region act as a business ecosystem to facilitate the upgrading of a region- specific industry? 1. What is the evolutionary pattern of a regional resource pool? 2. How to understand the upgrading of a region-specific industry? 3. How does a regional resource pool interact with regional industrial systems to facilitate industrial upgrading? In order to answer these questions, a qualitative study on the Shenzhen-based business ecosystem with two streams of embedded cases – electronics companies that have experienced upgrading in Shenzhen and milestone events in Shenzhen’s industrial development – was conducted following an inductive approach. After detailed individual and cross-case analyses, the research revealed three main findings. Firstly, the evolution of the regional resource pool is driven by both milestone events throughout the industrial development of the region and local firms’ feedback impacts. Secondly, the regional industrial upgrading is an iterative and dynamic process and should be interpreted by adding the regional dimension. At the regional level, there co-exist established industrial systems transformation and new industrial systems emergence throughout the upgrading journey of a region-specific industry. Thirdly, the underlying mechanisms for regional industrial upgrading are enabled by the region-based business ecosystem. A total of eight interactive mechanisms between the regional resource pool and regional industrial systems – four transformation impacts from the resource pool on the industrial system and four feedback impacts from the industrial system on the resource pool – result in an iterative and dynamic co-evolution model that defines the region-based business ecosystem. Theoretically, these findings fill the current scholarly neglect of the fact that a region as a whole can function as a business ecosystem to enhance long-term regional growth through industrial upgrading. In addition to these three main theoretical findings, this PhD research project has a number of practical implications. A mapping tool can be developed for firms or regional governments to use in decision making for industrial development. In addition to the tool development, firms and local government should collaborate following an ecosystem logic to enhance resource strengthening and creation, so as to sustain the regional industrial upgrading. In summary, this dissertation contributes to industrial systems and business ecosystem literatures in its re-conceptualisation of region-based business ecosystems. By introducing the regional dimension into the research of industrial upgrading, the integrative region-based business ecosystem model enriches our understanding of the co-evolution between the industrial systems and resources in a developing region

Politics and Economic Reform in Malaysia

Malaysia’s admirable economic growth is often attributed to liberal, open economic policies. Aggregate measures of openness, however, often veil the way coalitional politics drove illiberal government intervention in the economy to correct ethnically based economic inequality, create national heavy industries, and favor politically well-connected entrepreneurs. A more nuanced analysis reveals a complex mix of liberal and illiberal economic policies designed to balance competing coalitional interests. These policies created a “dual economy” that successfully replaced growing political and social instability with rapid economic growth sufficient to support redistributive politics. Yet this same dual economy also slowed further reform and retarded technological development, leaving Malaysia mired in mediocrity: neither price competitive with China nor technologically competitive with Singapore, the East Asian NICs, or the OECD countries.http://deepblue.lib.umich.edu/bitstream/2027.42/40041/3/wp655.pd

China's Integration with the World: Development as a Process of Learning and Industrial Upgrading

The process of development is full of uncertainties, especially if it is a process of transition from a planned economy to a market oriented one. Because of uncertainties and country specificity, development must be a process of learning, selective adaptation, and industrial upgrading. This paper attempts to distill lessons from China's reform and opening up process, and investigate the underlying reasons behind China's success in trade expansion and economic growth. From its beginnings with home-grown and second-best institutions, China has embarked on a long journey of reform, experimentation, and learning by doing. It is moving from a comparative advantage-defying strategy to a comparative advantage-following strategy. The country is catching up quickly through augmenting its factor endowments and upgrading industries; but this has been only partially successful. Although China is facing several difficult challenges -- including rising inequality, an industrial structure that is overly capital and energy intensive, and related environmental degradation -- it is better positioned to tackle them now than it was 30 years ago. This paper reviews the drivers behind China's learning and trade integration and provides both positive and negative lessons for developing countries with diverse natural endowments, especially those in Sub-Saharan Africa.patterns of trade; learning; innovation and growth

Capabilities For Catching-up: Economic Development and Competitiveness in Uganda: Implications for Human Resource Development

The study summarizes desk research for a GTZ report on the human resource dimension of Uganda's economic development

Policies for Industrial Learning in China and Mexico: Neo-developmental vs. Neo-liberal approaches

Abstract Previous work has shown that the results of both China and Mexico’s export-led market reforms over the past quarter century have been strikingly different. In contrast to China, Mexico has not managed to increase the value added of its exports of manufactured goods and has subsequently had a difficult time competing with China in world markets. Building on this previous work, in this paper we conduct a comparative analysis of the role of government policies in industrial learning and the development of capabilities of indigenous firms in Mexico and China in order to shed light on why China is so outperforming Mexico. We find that Mexico and China have had starkly different approaches to economic reform in this area. Mexico’s approach to reform has been a “neo-liberal” one, whereas China’s could be described as “neo-developmental.” Mexico’s hands-off approach to learning has resulted in a lack of development of endogenous capacity of domestic firms, little transfer of technology, negligible progress in the upgrading of industrial production, and little increase in value added of exports. By contrast, China has deployed a hands-on approach of targeting and nurturing domestic firms through a gradual and trial and error led set of government policies.International trade, development, competitiveness, value added, government policy, assembly operations

Thoughts on the Innovation and Development of Manufacturing Industry in Anhui Province

In order to deepen the implementation of the "Made in China 2025" program of action issued by the State Council to promote the development of manufacturing industry in Anhui Province and achieve the goal of manufacturing strong provinces, the People's Government of Anhui Province promulgated "a number of policies to support the construction of a strong province", Industry development focus areas, and related supporting measures and support conditions detailed arrangements. Combined with the characteristics of industrial development in Anhui Province, analysis of the status of industrial development and existing problems for the development of industrial development path and manufacturing innovation center to provide policy recommendations to better promote the development of manufacturing innovation in Anhui Province. Keywords:Anhui Province, Development of Manufacturing Industry, Innovation Cente

Vietnam between developmental state and neoliberalism: the case of the industrial sector

Since the mid 1980s Vietnam has launched a thorough programme of economic reforms, with a transition from central planning to a market-based economy. The gradual and pragmatic reform process achieved remarkable results in terms of sustainable economic growth and poverty reduction. With entrance into the WTO (in 2007), the country has become an important manufacturing hub and is attracting huge FDI flows, but with a risk of increased dependency from foreign capital and technology and vulnerability to exogenous shocks. This paper suggests that national authorities have so far (and rather successfully) relied on a large state sector to manage economic development but the government has not been able to design and implement coherent industrial strategies.Vietnam, economic reform, industrial development, Washington Consensus.

Multinational enterprises, development and globalisation: Some clarifications and a research agenda

This paper revisits an earlier contribution (Narula and Dunning 2000) and considers how economic globalisation has changed the nature of the MNE, MNE motivations, the MNE subsidiary and the modalities by which they interact with domestic economic actors. Most developing countries, however, have responded reactively. We discuss how the opportunities and challenges for developing countries in following an MNE-assisted development strategy have changed over the last decade. The growing share of industrial activity owned and controlled by MNEs does not always result in a proportional increase in development effects, because individual MNE establishments have different potential for externalities. Concatenation is important: when stage-inappropriate MNE activities are established, crowding-out or regulatory capture is a likely outcome. We highlight the need for systematically linking MNE and industrial policies, but differently than in the import-substitution era. Attracting the 'rights kind' of MNE activity remains important, but the greater heterogeneity requires more customisation of policy tools. Lastly, we warn of the dangers of underestimating the social and political costs of structural adjustment and rapid institutional change associated with globalization.FDI, spillovers, industrial policy, governments, development, WTO, globalisation, developing countries, liberalisation