The electronics industry in central and eastern Europe: an emerging production location in the alignment of networks perspective

This paper analyses the emergence of central Europe as a new location for the production of electronics. The main factors that drive integration in the region into global production networks are also analysed, as well as prospects for upgrading the industry by using network alignment perspectives. Foreign investment is the primary vehicle of integration of CEE electronics firms into global production networks, and Hungary has moved furthest along this path, positioning itself as a major low-cost supply base in the region. Czech and Polish electronics industries are connected, in smaller, but increasing, degrees to international electronics production networks. Networks that are being built in CEE in electronics are usually confined to subsidiaries with still limited local subcontracting; they are export-oriented and are expanding. Local subsidiaries have mastered production capabilities and several subsidiaries in Hungary are European mandate suppliers in their respective lines of business. EU demand is the main pull factor, which gives cohesion to the actions of MNCs as well as to the action of local and national governments in CEE. The layer of local firms is still very weak with very limited capabilities in core technologies. This is the key weakness which prevents further alignment of networks in CEE electronics. Local governments play an important role in working jointly with foreign investors in establishing industrial parks and new capacities

Policies for promoting technological catching up: towards post-Washington approach

This paper analyses the evolution of policies for technology catch-up through three periods: import-substitution, (augmented) Washington consensus and post-Washington period. We analyse the dominant policy models and practices in each of these periods as co-evolving with the dominant academic ideas, and changing the conditions for catching-up. We develop several dimensions or building blocks that characterise the policies for technology catch-up. These dimensions are used to characterise each of the three policy periods with the objective of outlining the generic features of an emerging post-Washington approach to technology catch-up policies in relation to past approaches

Patterns of preservation, restructuring and survival: science and technology policy in Russia in the post Soviet era

This paper analyses the role of S&T policy in the adjustment and restructuring of the Russian S&T system in the post-Soviet period. The principal argument is that the adjustment of the S&T system in Russia has been evolving between the 'preservation of S&T potential', its restructuring, and survival strategies developed by researchers and R&D organisations. The interaction of these factors explains much of the pace and patterns of restructuring of Russian S&T system observed in the post-Soviet period. The model that emerged is the post-Soviet R&D model, which is relevant for Russia as well as for other CIS. The paper analyses strategic options available to Russian policy makers

Policies for promoting technological catch up: a post-Washington approach

This paper analyzes the evolution of policies for technology catch-up through three periods: the import substitution period, the (augmented) Washington Consensus period and the post-Washington period. We analyze the dominant policy models and practices in each of these periods as co-evolving with the dominant academic ideas, thereby changing the conditions for catching up. We develop several dimensions or building blocks that characterize the policies for technology catch-up. These dimensions are used to characterize each of the three policy periods with the objective of outlining the generic features of an emerging post-Washington approach to technology catch-up policies in relation to past approaches

Are systems of innovation in Eastern Europe efficient?

This paper explores the determinants of the productivity in the countries of Eastern Europe (EE) through the perspective of ‘narrow’ and ‘broad’ national systems of innovation (NSI). Based on panel econometrics it examines the extent to which systems in EE could be considered ‘(in)efficient’. Our results suggest that the EE countries have lower levels of productivity than might be expected given their research and development (R&D), innovation and production capabilities. The inefficiencies of ‘broad’ NSI are compounded by the inefficiencies of ‘narrow’ NSI in terms of generating numbers of science and technology publications and resident patents relative to R&D employment, compared to the rest of the world. Our results point to an important distinction between technology and production capability as the drivers of productivity improvements, and provide some policy implications

International expansion and buyer-driven commodity chain: the case of TESCO

This paper is prepared within the project ‘The Emerging Industrial Architecture of the Wider Europe; the Co-evolution of Industrial and Political Structures ’ funded by the ESRC programme ‘One Europe or Several?’ * Authors would like to thank Nick von Tunzelmann for his valuable comments in earlier draft versions. Following the collapse of Communism, central European countries have experienced an invasion of foreign investment in many sectors. The sectors that target consumers directly have found an opportunity to gain market share with considerable long-term profit potential. Thus, investments by western retailers are quite large when compared to other industries1. These multinational

Industries, costs and macroeconomic regimes in Central and Eastern European countries: towards stylised facts

Economists have difficulties to conceptualise and model the relationship between macroeconomic policy and industry change. This paper explores the relationships between industry cost structures and macroeconomic regimes in central and east European countries (CEECs). It finds that the cost structures are more homogenous within industries than within countries. Changes in cost structures are dominantly intra-industry, i.e. unrelated to changes in industry structures though in some countries structural and specialisation effects are also significant. The paper links the intensity of changes in industry cost structures with a composite measure of macroeconomic stability. In the case of five CEECs, it finds that there is a country-specific relationship between changes in costs and macroeconomic stability. Based on these findings the paper provides arguments for integration of macroeconomic and industrial (technology) policies

Between vision and reality: promoting innovation through technoparks in Kazakhstan

A common motivation for the technopark movement is the belief that technoparks promote innovation and economic growth at regional and/or national levels. The paper analyses the role of technoparks as instruments of innovation promotion in Kazakhstan using data from a firm survey and interviews. Our results suggest that, unlike what is assumed in the innovation policy literature, technoparks do not house firms dealing with the commercialisation of innovations that are ready for introduction to the market. Technopark firms are no more innovative than other firms. They are oriented largely towards the local market, and operate in traditional sectors; the frequency and intensity of their external links are more developed than are their internal links. The key motivations for relocating to a technopark seem to be lower rents and the possibility of accessing finance. Overall, Kazakh technoparks seem to be successful in terms of facilitating business incubation, but much les so in terms of innovation promotion and diversification of the economy. Currently, Kazakh industry does not make any demands for local R&D, and its sources of competitiveness lie in non-R&D activities. This suggests that innovation policy should focus on assisting companies to upgrade their technological capabilities to the level that they can articulate their R&D demands. Focusing on technoparks as the main mechanism to improve competitiveness and diversify the economy is an ineffective and uncertain a policy option at this stage of the country's economic development. However, there seems to be significant scope for supporting business incubation. These conclusions are of relevance to other emerging economies

Nature and determinants of productivity growth of foreign subsidiaries in Central and East European countries

The paper examines the determinants of productivity growth in foreign manufacturing subsidiaries in five Central and East European (CEE) countries by analysing patterns of control, nature of firms' capabilities and firms' market orientation. Building on the so called 'developmental subsidiaries' perspective we show that productivity growth is determined jointly by corporate governance, production capability and market orientation variables. CEE subsidiaries have relatively strong autonomy over control of their business functions, but within a dominantly production oriented mandate. Majority foreign equity share has a significant and positive impact on subsidiaries' productivity growth. These results present very strong regional characteristic