ads:
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Ministério da Ciência e Tecnologia - MCT
Financiadora de Estudos e Projetos - FINEP
Programa de Apoio ao Desenvolvimento Científico e Tecnológico - PADCT
ESTUDO DA COMPETITIVIDADE
DA INDÚSTRIA BRASILEIRA
_____________________________________________________________________________________________
THE DEVELOPMENT OF TECHNOLOGICAL
INNOVATION CAPABILITY IN DEVELOPING
COUNTRIES: STRATEGIES OF EAST ASIAN
NICs FOR CATCHING UP IN ELECTRONICS
Nota Técnica Temática do Bloco
"Condicionantes Internacionais da Competitividade"
O conteúdo deste documento é de
exclusiva responsabilidade da equipe
técnica do Consórcio. Não representa a
opinião do Governo Federal.
Campinas, 1993
Documento elaborado pelo consultor Mike Hobday (Science Policy Research Unit/University of Sussex).
A Comissão de Coordenação - formada por Luciano G. Coutinho (IE/UNICAMP), João Carlos Ferraz (IEI/UFRJ), Abílio dos Santos
(FDC) e Pedro da Motta Veiga (FUNCEX) - considera que o conteúdo deste documento está coerente com o Estudo da Competitividade da Indústria
Brasileira (ECIB), incorpora contribuições obtidas nos workshops e servirá como subsídio para as Notas Técnicas Finais de síntese do Estudo.
ads:
Livros Grátis
http://www.livrosgratis.com.br
Milhares de livros grátis para download.
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
CONSÓRCIO
Comissão de Coordenação
INSTITUTO DE ECONOMIA/UNICAMP
INSTITUTO DE ECONOMIA INDUSTRIAL/UFRJ
FUNDAÇÃO DOM CABRAL
FUNDAÇÃO CENTRO DE ESTUDOS DO COMÉRCIO EXTERIOR
Instituições Associadas
SCIENCE POLICY RESEARCH UNIT - SPRU/SUSSEX UNIVERSITY
INSTITUTO DE ESTUDOS PARA O DESENVOLVIMENTO INDUSTRIAL - IEDI
NÚCLEO DE POLÍTICA E ADMINISTRAÇÃO EM CIÊNCIA E TECNOLOGIA - NACIT/UFBA
DEPARTAMENTO DE POLÍTICA CIENTÍFICA E TECNOLÓGICA - IG/UNICAMP
INSTITUTO EQUATORIAL DE CULTURA CONTEMPORÂNEA
Instituições Subcontratadas
INSTITUTO BRASILEIRO DE OPINIÃO PÚBLICA E ESTATÍSTICA - IBOPE
ERNST & YOUNG, SOTEC
COOPERS & LYBRAND BIEDERMANN, BORDASCH
Instituição Gestora
FUNDAÇÃO ECONOMIA DE CAMPINAS - FECAMP
ads:
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
EQUIPE DE COORDENAÇÃO TÉCNICA
Coordenação Geral: Luciano G. Coutinho (UNICAMP-IE)
João Carlos Ferraz (UFRJ-IEI)
Coordenação Internacional: José Eduardo Cassiolato (SPRU)
Coordenação Executiva: Ana Lucia Gonçalves da Silva (UNICAMP-IE)
Maria Carolina Capistrano (UFRJ-IEI)
Coord. Análise dos Fatores Sistêmicos: Mario Luiz Possas (UNICAMP-IE)
Apoio Coord. Anál. Fatores Sistêmicos: Mariano F. Laplane (UNICAMP-IE)
João E. M. P. Furtado (UNESP; UNICAMP-IE)
Coordenação Análise da Indústria: Lia Haguenauer (UFRJ-IEI)
David Kupfer (UFRJ-IEI)
Apoio Coord. Análise da Indústria: Anibal Wanderley (UFRJ-IEI)
Coordenação de Eventos: Gianna Sagázio (FDC)
Contratado por:
Ministério da Ciência e Tecnologia - MCT
Financiadora de Estudos e Projetos - FINEP
Programa de Apoio ao Desenvolvimento Científico e Tecnológico - PADCT
COMISSÃO DE SUPERVISÃO
O Estudo foi supervisionado por uma Comissão formada por:
João Camilo Penna - Presidente Júlio Fusaro Mourão (BNDES)
Lourival Carmo Mônaco (FINEP) - Vice-Presidente Lauro Fiúza Júnior (CIC)
Afonso Carlos Corrêa Fleury (USP) Mauro Marcondes Rodrigues (BNDES)
Aílton Barcelos Fernandes (MICT) Nelson Back (UFSC)
Aldo Sani (RIOCELL) Oskar Klingl (MCT)
Antonio dos Santos Maciel Neto (MICT) Paulo Bastos Tigre (UFRJ)
Eduardo Gondim de Vasconcellos (USP) Paulo Diedrichsen Villares (VILLARES)
Frederico Reis de Araújo (MCT) Paulo de Tarso Paixão (DIEESE)
Guilherme Emrich (BIOBRÁS) Renato Kasinsky (COFAP)
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
José Paulo Silveira (MCT) Wilson Suzigan (UNICAMP)
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
CONTENTS
EXECUTIVE SUMMARY ......................................... 1
INTRODUCTION .............................................. 8
1. INDICATORS OF TECHNOLOGICAL ACHIEVEMENT ................ 10
1.1. Selected Achievements of Market Leaders ........... 10
1.2. Structural Weaknesses and Limitations in Electronics 14
2. EAST ASIAN EXPORT-LED TECHNOLOGY DEVELOPMENT - A SIMPLE
MODEL .................................................. 19
2.1. The East Asian "Latecomer" Firm ................... 19
2.2. Export-led Technology Development: A Simple
Framework ......................................... 20
2.3. Exploiting Foreign Channels of Export Marketing,
Investment and Technology ......................... 26
2.3.1. Foreign buyers ............................. 26
2.3.2. Foreign direct investment .................. 28
2.3.3. Other foreign sources ...................... 29
3. LATECOMER FIRM STRATEGIES IN ELECTRONICS ............... 30
3.1. Phase 1 - Industry Start-up (circa late 1950s and
1960s) ............................................ 30
3.2. Phase 2 - Take-off, from Assembly to Manufacture of
Consumer Goods and Components (circa 1970s) ....... 32
3.3. Phase 3 - Take-off of Professional Electronics,
Computers, Peripherals and Start-up of Design and
Manufacture of Semiconductors (circa 1980s) ....... 34
3.4. Phase 4 - From Electronics to Information Technology,
Software, Advanced Computing and Telecommunications
(circa 1990s) ..................................... 37
4. GOVERNMENT POLICIES .................................... 40
4.1. Industrial Support Policies, Competition and
Industrial Structure .............................. 40
4.2. Education and Training ............................ 44
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
5. CONCLUSIONS AND POLICY IMPLICATIONS .................... 48
BIBLIOGRAPHY .............................................. 52
1
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
EXECUTIVE SUMMARY
1. THE ACHIEVEMENTS OF EAST ASIAN NICS IN ELECTRONICS
This paper explores the competitive achievements of the four
dragons or newly industrialising countries (NICs) of East Asia:
South Korea, Taiwan, Singapore and Hong Kong, focusing on
electronics and information technology. Following Japan, the four
dragons have become formidable competitors in electronics. As a
result of very rapid growth, electronics has become the largest
industrial sector in three of the four NICs. In Hong Kong is the
second largest. The growth in industrial output, employment and
exports in electronics has helped each country move from poverty
and low wages in the 1950s and 1960s to medium wage, full
employment economies. In Singapore and Hong Kong, GNP per capita
now is on a par with Japan's.
Although much of the industry is dependent on Japan for
technology inputs, each country has substantially upgraded its
technology base in electronics. For example:
- in South Korea, the largest manufacturer, Samsung,
astonished observers in July 1990 when engineers presented
samples of 16 megabit dynamic random access memory (DRAM)
semiconductors to conferences in the US, ahead of the
market leaders in both Japan and the US. By 1992 Samsung
was ranked fifth among the world's DRAM producers and
first in one and four megabit DRAMs. Other South Korean
firms had also entered the DRAM market, with Goldstar and
Hyunday ranking 12th and 13th in 1992. Twelve years
earlier, South Korea had no significant market share in
semiconductors; in order to overcome their traditional
dependency on licensing, local firms have stepped up their
in-house R&D efforts, acquired overseas high-technology
2
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
firms and formed technology partnerships with leading
foreign companies;
- in Taiwan, one of the leading computer makers, ACER, came
second in the world with the 32-bit personal computer (PC)
ahead of IBM and behind Compaq. In 1990 ACER employed
around 500 R&D staff in electronics. It was the first
company worldwide to develop a user-upgradable PC, which
the buyer is able to upgrade by simply "plugging in" a new
more powerful microprocessor unit;
- in Singapore, a large number of transnational
corporations (TNCs) was attracted to produce consumer and
industrial electronics because of its fully operational
integrated services digital network, its efficient
information technology infrastructure and high level human
resources;
However, despite the general upgrading of the technology
base the NICs are forced to manage structural weaknesses in their
electronic industries. Dependence on Japan for technology inputs,
components and market outlets is one set of problems. Another is
each country's delicate balance of trade resulting from heavy
imports from Japan. The tiny size of firms in Hong Kong and
Taiwan prevents heavy corporate R&D spending. In contrast, the
conglomerate structure of South Korean firms makes them
relatively slow and inflexible in international markets, and has
relegated them so far to relatively low value-added electronics
goods. Finally, while the engineering base of each economy is
strong, the NICs have yet to establish the research and
scientific strength to enable them to compete with world leaders
at the technology frontier.
3
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
2. SUCCESSFUL CATCHING UP STRATEGIES IN ELECTRONICS
The general economic achievements of the four dragons are
well known. Less well understood are the strategies by which
firms overcame market and technology entry barriers as they
progressed from simple consumer electronics to more complex
industrial goods and semiconductor components. The question of
how East Asian firms succeeded in overcoming barriers to entry in
electronics and initiated the process of rapid and sustained
technological learning remains largely unexplored. Part of the
answer to this question resolves around the efforts, abilities
and strategies of latecomer firms in the NICs.
Latecomer firms are dislocated from the main internacional
sources of technology and R&D. They operate outside the world
centres of science and innovation and lag behind technologically.
Their technology infrastructures are poorly developed, as are
their policy organizations and educational institutions.
Such firms are also dislocated from the mainstream markets
and demanding users in the advanced countries. They suffer from
underdeveloped small local markets and unsophisticated users.
Latecomer firms had therefore to develop outside the
international clusters of demand and innovation.
Latecomer firms from East Asia overcame such disadvantages,
acquired technology and became stronger competitors to the
international electronics market. The path toward advanced
information technology has been a painstaking gradual progression
from simple manufacturing tasks in the 1960s to technology
intensive industrialisation in the 1990s. Development success has
relied primarily upon the efforts of locally owned firms, except
for the case of Singapore. Government policies for education,
competition and technology played a central role in each case.
4
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
In each case technology accumulation in electronics was
linked to export and foreign channels of investment. Foreign
buyers and OEM arrangements served a dual purpose. On the one
hand they provided an outlet to the international market,
assisting firms to overcome market entry barriers. On the other
hand they served as a direct channel for technology transfer,
allowing local firms to gradually learn electronics technology.
OEM acted as a training school for many local companies. Other
important foreign channels included foreign direct investment
(FDI), joint ventures and licensing. Local firms from Taiwan and
Hong Kong imitated foreign firms and supplied TNCs under
subcontracting arrangements. These mechanisms were exploited by
local firms to bootstrap their way into electronics markets.
Korean firms used joint ventures and OEM arrangements to overcome
entry barriers and accumulate technology.
5
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
3. POLICY IMPLICATIONS FOR DEVELOPING COUNTRIES
For other industrialising countries, the success of East
Asian latecomer firms shows that entry barriers can be overcome.
In the East Asian case, export orientation and export-led growth
was intimately linked to technology assimilation and learning so
as to overcome such barriers in spite of initial disadvantages.
Local firms in the dragons exploited the various foreign market
and technology channels, enabling them to follow and eventually
catch up with the world market leaders in electronics.
While foreign channels provided the opportunity, local firms
were the foundation upon which the dragons developed (with the
exception of Singapore). Local firms generated most of the
employment, exports and value-added in electronics. Local firms
exploited the foreign channels of marketing and technology.
Foreign investment was a necessary but insufficient condition for
success. Local firms forced the pace and scale of the progress.
The implication for other countries emerging from import
substitution regimes, is that investment liberalisation alone may
not be a sufficient condition for electronics development. The
two largest dragons, Taiwan and South Korea, controlled and
restricted the inflow of FDI. FDI was used judiciously to assist
in the development process. Indeed, FDI only constituted a tiny
proportion of total capital formation in these two economies.
Regarding the process of innovation in electronics, the
experience of the dragons may well prove instructive for other
countries. Although there were no rigid phases of development,
there was a tendency for industry to move from simple assembly to
more complex tasks involving production engineering, product
design, prototype development and R&D. The path to advanced
information technology was a gradual one - and still largely
incomplete. For other countries, this suggests that to fully
exploit the industrial development potential of electronics,
complementary basic industrial and engineering skills are
6
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
necessary (e.g. plastic moulding, electromechanical interfacing,
precision machining and fine engineering). These skills are
needed to produce electronic goods and systems. Their
accumulation is also a route towards more complex, higher value-
added electronics and information technology.
This overlap of technological paradigms has implications for
training. It suggest that for electronics and information
technology, a strong supply of pre-electronic craft and
production engineering skills is needed. Electronics
manufacturers in the dragons benefited from government policies
which emphasised craft and engineering training in academic
institutes and government laboratories connected with industry.
Regarding industrial structure and strategy, there was
considerable variety among the four dragons. Taiwan, for
instance, relied on a multitude of small, fast moving firms
supplying niche markets. Their experience suggest that some of
the disadvantages of small scale can be overcome in electronics
and that there are proven alternatives to the Japanese and South
Korean large firm "models" of electronics development.
Regarding industrial policy, three of the four dragons
(except Hong Kong) carried out systematic policy intervention
(e.g. tax breaks, subsidies and marketing assistance); South
Korea and Taiwan also carried out import-substitution and FDI
restrictions.
Finally, the experience of the four dragons highlights the
role of government in fostering the electronics industry in a
developing country in the following ways:
- government policies of various kinds (including targeting)
have had a profound influence on the paths of
technological achievement in all countries;
7
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
- in South Korea, these policies included procurement,
subsidies, market protection and financial incentives to
local firms;
- in Singapore, which relied strongly on foreign capital,
government attracted TNCs by incentives, targeted training
schemes, and infrastructural developments in
telecommunications and transport;
- in Taiwan, the government has promoted technology
development through various joint ventures;
- even in Hong Kong, the only country to follow a laissez
faire policy, government was important insofar as
implementing a very modern information technology-based
infrastructure;
- education and vocational (specially engineering) training
played an important role in all dragons.
8
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
INTRODUCTION
This paper explores the competitive achievements of the four
dragons of newly industrialising countries (NICs) of East Asia:
South Korea, Taiwan, Singapore and Hong Kong, focussing on
electronics and information technology
1
. Following Japan, the
four dragons have become formidable competitors in electronics.
As a result of very rapid growth, electronics has become the
largest industrial sector in three of the four NICs. In Hong Kong
it is the second largest. The growth in industrial output,
employment and exports in electronics has helped each country
move from poverty and low wages in the 1950s and 1960s to medium
wage, full employment economies. In Singapore and Hong Kong, GNP
per capita now is on a par with Japan's
2
.
The general economic achievements of the four dragons are
well known. Less well understood are the strategies by which
firms overcame market and technology entry barriers as they
progressed from simple consumer electronics to more complex
industrial goods and semiconductor components. The purpose of
this paper is therefore to explore how "latecomer" firms from
East Asia overcame barriers to entry, acquired technology and
became strong competitors in the international electronics
market. Special attention will be paid to the paths and
mechanisms of technology accumulation as firms "learned" to
innovate with electronics. The paper attempts to show how
patterns of technology accumulation in electronics were closely
linked to export marketing channels and the export-led strategies
of each of the four NICs.
1
Normally, the definition of electronics includes consumer goods, semiconductor components,
computer and telecommunications equipment and other hardware. Information technology is used to
describe the generic technology for controlling and storing information, including both
software and hardware inputs. It is also used to describe the range of new services, including
computer-computer communications, telecommunications networking, value-added data services and
the software required for these services. These definitions are used in this paper unless
otherwise stated. Also note that the four "dragons" are sometimes called the four "tigers".
2
South Korea and Taiwan lag behind the two "city states" in terms of GNP per capita. Each NIC
has experienced very rapid wage rates, enabling them to jump up the GNP ranking of nations. See
Wade (1990:35) and James (1990:4) for historical achievements of the NICs.
9
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Part 1 begins by providing some indicators of achievement in
electronics technology in each of the four dragons. Although much
of the industry is dependent on Japan for technology inputs, each
country has substantially upgraded its technology base in
electronics. Part 2 offers a preliminary conceptual framework to
explain how latecomer firms caught up in electronics technology
and entered international markets. A simple learning/diffusion
model is proposed to illustrate the connection between export
growth and technology development. Part 3 provides examples of
corporate strategies in electronics, showing how leading firms
entered the industry and acquired technology. Part 4 turns to
government policies, touching on competition, trade, foreign
investment, education and technology development programmes.
The conclusion argues that the path toward advanced
information technology has been a painstaking gradual progression
from simple manufacturing tasks in the 1960s to technology
intensive industrialisation in the 1990s. Development success has
relied primarily upon the efforts of locally owned firms, except
for the case of Singapore. Government policies for education,
competition and technology played a central role in each case.
10
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
1. INDICATORS OF TECHNOLOGICAL ACHIEVEMENT
1.1. Selected Achievements of Market Leaders
Considerable variety exists among the four dragons in terms
of technological strategy and achievement in electronics. The
following examples of recent advances serve to illustrate the
technological dynamism of leading firms and the absorptive
capacity of the four dragons in electronics and information
technology.
The largest South Korean manufacturer, Samsung, astonished
observers in July 1990 when engineers presented samples of 16
megabit dynamic random access memory (DRAM) semiconductors to
conferences in the US, ahead of the market leaders in both Japan
and the US, not to mention Europe. Ten years earlier, South Korea
had no significant market share in semiconductors (the key
components for electronic goods). By 1990 Samsung had caught up
in DRAMs, one of the most challenging and difficult areas of
semiconductor design and manufacture. By 1992 South Korean firms
commanded a 12.1% share of the world market for memory
semiconductors, including 19.7% of the (then) mainstream
technology, the four megabit DRAM. Samsung was ranked fifth among
the world's DRAM producers and first in one and four megabit
DRAMs, according to the market consultancy, Dataquest Inc.
3
.
Other South Korean firms had also entered the DRAM market, with
Goldstar Electron and Hyundai Electronics Industries ranking 12th
and 13th in the world in 1992
4
. Samsung and Goldstar both planned
to invest around $1bn each in new megabit DRAM manufacturing
facilities in 1993.
There are many such indicators of the growing competence of
South Korean electronics producers in world markets. In order to
3
See Business Week, 30 nov. 1992, p. 70-71, for a full report.
4
Overall sales of the Korean chaebol in 1990 were: Samsung $43.4bn, Hyundai $39.6bn, Lucky-
Goldstar $25.0bn and Daewoo $16.0bn. These figures include non-electronics output (IEEE
Spectrum, june 1991, p. 51).
11
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
overcome their traditional dependency on licensing, local firms
have stepped up their in-house R&D efforts, acquired overseas
high technology firms and formed technology partnerships with
leading foreign companies. In 1985, Samsung set up a
semiconductor research facility in Silicon Valley to keep abreast
of technological change. In 1991 it invested around 9% of its
total sales in R&D, in line with the R&D spending of the leading
Japanese corporations (Koh, 1992:28-29). During the 1980s
Samsung, Daewoo and Goldstar set up manufacturing facilities in
western markets and substantially improved their domestic R&D
capabilities
5
.
In Taiwan, one of the leading computer makers, ACER, came
second in the world with the 32-bit personal computer (PC), ahead
of IBM and behind Compaq. In 1990 ACER employed around 500 R&D
staff in electronics. It was the first company worldwide to
develop a "user-upgradable" PC, which the buyer is able to
upgrade by simply "plugging in" a new more powerful
microprocessor unit. ACER started up in 1976 with 11 engineers.
By 1992 ACER's sales were in the region of $1.2bn (Electronic
Business, feb. 1992, p. 77). ACER developed the first Chinese
operating system and contributed its own four, eight and sixteen-
bit PCs to the marketplace. By 1990 it produced 32-bit PCs in
Taiwan and had offshore manufacturing plants in Holland and
Malaysia. In the following year the company formed a joint
venture with Texas Instruments of the US (partly funded by the
Taiwanese Government) to produce advanced DRAMs within Taiwan to
help overcome local industry's import dependency on this
particular component.
Other leading electronics firms in Taiwan include Tatund
(with sales of $1.150m in 1990), Sampo ($537m), Mitac ($188m) and
United Microelectronics Corporation ($148m) (IEEE Spectrum, june
p. 51). In 1991 twelve locally owned firms produced and designed
integrated circuits in Taiwan. The computer maker Mitac formed an
alliance with Intel of the US in 1992 to produce a leading edge
5
For examples, see Koh (1992) and Bloom (1991).
12
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
microprocessor unit for PCs, the 80586 CPU (The China Post, 31
july 1992, p. 9).
Government support has been stepped up recently to help
Taiwanese firms acquire advanced information technology. The
Industrial Technology Research Centre (ITRI), established in
1973, today has a budget of around $400m per annum and employs
5,200 people of which about 2,200 are engaged in electronics
(Interview ITRI 1992). Under ITRI, the Electronics Research
Service Organisation (ERSO) has had a budget of around $100m per
annum since 1986 (Chaponniere & Fouquin, 1989:49). ERSO runs
projects in many areas of advanced electronics. It recently
received from Government around $120m to carry out R&D into high
definition television R&D, involving five laboratories and
several local firms. Its aim is to keep up with the evolving
technology and market standards. Recently, the Government spent
around $280m on advanced (sub-micron) semiconductor technology,
helping to attract back many engineers and scientists trained
(mainly) in US corporations and universities.
FIGURE 1
FLOW OF TECHNICALLY TRAINED TAIWANESE RETURNING TO TAIWAN
(Numbers of Engineers)
13
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
0
500
1000
1500
8
5
8
6
8
7
88 8
9 9
0
9
1
9
2
*
Source: original data from Taiwanese Government.
* Business Week estimate,
Cited in Business Week, 30 nov. 1992, p. 76.
14
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
As a result of Government projects and the rapidly expanding
industry, thousands of engineers have returned to Taiwan (Figure
1). By 1992 there were so many former Bell Labs. employees
working in Taiwan's electronics industry, that around 120 of them
formed the Taiwanese Bell System Alumni Association. (Business
Week, 30 nov. 1992, p. 75-76).
Singapore is probably best known for its fully operational
integrated services digital network (an advanced fully digital
telecommunications system) and its efficient information
technology infrastructure, widely used in its sea and air ports,
corporate trading, government and financial services. This
infrastructure is part of the reason why large numbers of
transnational corporations (TNCs) are attracted to the country to
produce electronics. Unlike the other dragons, foreign TNCs
dominate Singapore's electronics sector. Much of Singapore's
recent economic growth has resulted from consumer and industrial
electronics production. Output of electronics amounted to around
$16.6bn in 1991 (exports were $15.0bn). Employment in electronics
stood at 124,000 in 1991. In that year, Singapore produced around
one half of the world's hard disk drives (roughly $4.1bn in
sales). US firms such as Seagate, Connor and Maxtor began
production in the early 1980s, expanded capacity and developed
advanced manufacturing processes locally. In the case of Connor,
the Singapore plant became its world centre for advanced
manufacturing technology. The local Singapore director was placed
in charge of transferring technology to Scotland and Malaysia
(Interview with Connor Singapore, 1992).
Similarly, companies such as AT&T Consumer Products Pte Ltd.
make and design top-of-the-range cordless telephones and other
advanced consumer goods in Singapore, usually for export. In
semiconductors, some TNCs have established wafer fabrication
facilities in Singapore (e.g. SGS-Thomson, Hewlett Packard and
Texas Instruments). Over time, the TNCs have upgraded their
technological activities and transferred substantial amounts of
technology from their parents to their subsidiaries.
15
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Hong Kong is perhaps the weakest NIC in technological terms.
Overall it spends only 0.05% of GNP on R&D, compared with 2.0% in
South Korea (Business Week, 30 nov. 1992, p. 67). However, the
country has a fully digital telecommunications infrastructure,
one of the most advanced in the world. It recently established a
new Hong Kong University of S&T (HKUST is known as the "MIT of
Asia") at a cost of $450m. HKUST has hired high level staff from
US firms and universities. It has research links with Motorola,
Texas Instruments and Hewlett Packard, among others. By 1992
HKUST had attracted 2,200 students, 640 faculty staff and funds
for a further 5,000 students (Business Week, 30 nov. 1992, p.
77).
Some firms in Hong Kong have scored successes in high
technology niche markets. Varitronix, with expected sales of $45m
in 1992, produces customised liquid crystal displays for use in
Mercedes-Benz cars, miniature terminals and other advanced
electronics products. Johnson Electric Holdings, with sales of
$167m in 1991, supplies Chrysler, Black and Decker and Philips
with micromotors. It is now the second largest supplier of
micromotors after Mabuchi Motor Co. of Japan (Business Week, 30
nov. 1992, p. 71). Porro Technologies exports its own brand of
workstations to Australia and the Pacific Rim. Other firms have
designed sophisticated fax machines, cordless telephones and
small screen colour televisions. Hong Kong's electronics firms
tend to be very small. Eighty percent employ less than 50 staff.
Larger firms include Video Technology, with sales of $287m in
1989 and Tomei Industrial with sales of $198m in 1989 (IEEE
Spectrum, june 1991, p. 51-52).
1.2. Structural Weaknesses and Limitations in Electronics
Despite the technological and market successes of vanguard
companies in the four dragons, there remain significant
structural weakenesses in their electronics industries. Only a
16
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
small minority of leading firms boast the technological
achievements noted above. Most firms could not be described as
"high technology". They produce relatively simple, consumer and
industrial electronics based on the advantages of low cost
engineering and management. As wages have risen in each of the
four dragons, firms have relocated low end production into China
and other poorer Asian economies such as Malaysia, Indonesia and
Thailand. Most firms in Taiwan and Hong Kong are too small to
fund extensive design or R&D. They remain behind the technology
frontier, often making goods often under sub-contracting or
original equipment manufacture (OEM) arrangements.
Under OEM a local firm produces a finished product to the
specification of a foreign buyer (usually a large TNC). The
foreign firm then markets the product under its own brand name,
through its own distribution channels (hereby capturing the large
post-manufacturing valued-added). OEM sometimes involves the
foreign partner in the selection of capital equipment, the
training of managers, engineers and factory workers. The
arrangement usually involves a close technological relationship
between the firms. OEM can act as an important 'training school'
for local firms by which production and design techniques are
absorbed. However, the junior partner is subordinated to the
decisions of the TNC and dependent on the foreign company for
technology, components and market channels.
Partly as a result of extensive OEM arrangements, the
dragons are dependent on Japan for technology, components,
machinery and capital goods inputs. In 1990 the four NICs
imported around $57bn worth of goods from Japan (Fortune, 7 oct.
1991, p. 158). Three of the four NICs imported more goods from
Japan than did the UK in 1990. Singapore, the exception, imported
roughly the same amount as the UK. Each of the four countries had
a negative trade balance with Japan through the 1980s, usually
balanced out by their trade surplus with the US and Europe
(Chaponniere, 1992:73). Despite their notable export record, the
balance of payments position of the four NICs is therefore
17
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
delicate. For example, in 1990 South Korea, Hong Kong and
Singapore had overall trade deficits. The only dragon with a
trade surplus was Taiwan.
High technology inputs constitute a large proportion of
imports. In 1991 South Korea imported around $21bns' worth of
high technology industrial goods from Japan, resulting in a trade
deficit with Japan of $8.8bn. Similarly, Taiwan' deficit with
Japan reached $9.7bn in 1991 (Business Week, 11 may 1992, p. 24-
25). Firms and policy makers in the NICs have taken steps to
reduce their technological dependence on Japan. Taiwan's Ministry
of Economic Affairs has put forward a five year plan to achieve
self-sufficiency in 66 key products and components currently
imported from Japan. South Korea prohibits 258 Japanese products
including camcorders and the Sony Walkman. South Korean firms
have made large investments in key technologies to reduce their
reliance on Japanese firms.
Korean firms' OEM strategies, coupled with the huge size of
the chaebol conglomerates, has confined companies to relatively
low value-added, large volume, mass markets. OEM arrangements
have limited the scope of Korean firms in international markets,
forcing them to rely on Japanese firms for semiconductor
components, capital goods and distribution outlets. Recently,
Samsung and others have attempted to develop their own brand
images abroad by advertising, producing higher quality goods and
locating production near to customers. However, in 1988 OEM
accounted for some 60% to 70% of Korean electronics exports (Jun
& Kim, 1990:14).
Similarly, in Taiwan OEM accounted for around 43% of
production in computers and related goods in 1989 (III, 1991:39-
43). The largest Taiwanese electronics firm Tatung exported
around half of its output of colour televisions and personal
computers under OEM arrangements in 1991.
South Korean firms are especially dependent on licensing and
technical agreements for key components. For instance, in 1989,
18
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Hitachi of Japan supplied manufacturing knowhow to Goldstar for 4
and 16 megabit DRAMs. Among the South Korean firms only Samsung
has developed its own DRAM technology in house. Goldstar and
Hyundai rely on licenses from Japanese firms. Samsung formed a
licensing deal for the advanced RISC (reduced instruction set
computer) microprocessor from Hewlett Packard of the US, and is
weak in other semiconductor fields such as applications specific
integrated circuits (ASICs) and static random access memories
(SRAMs) (Electronics Times, 24 aug. 1989, p. 8).
Turning to the dragons information technology and
telecommunication infrastructures, while the two small city
states of Hong Kong and Singapore enjoy highly advanced
infrastructures, this is not the case for Taiwan and South Korea.
The two largest NICs both suffer from infrastructural
bottlenecks, not only in telecommunications and information
technology, but also in transport and energy. Large spending
plans are underway in Taiwan and South Korea to improve their
basic infrastructures.
With progress, factor cost advantages have shifted in the
NICs. The four dragons are no longer low wage areas. Today, their
major cost advantage over the developed countries is low cost
engineering and management. In Singapore, for instance, the main
universities, polytechnics and training institutes (including the
National University of Singpore and Nanyang Technological
University) together supply around 22,000 engineers and craftsmen
per annum, representing an annual output of roughly 38 per
100,000 population, one of the highest per capita levels
worldwide
6
. In each of the dragons, the abundant supply of low
cost, high quality engineering talent has enabled industrial
expansion of engineering intensive goods such as hard disk
drives, complex peripherals, advanced consumer goods and
microcomputers.
6
1991 data cited in Singapore Investment News (1991:10). The abundance of high quality engineers
is discussed in Part 4.
19
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
By contrast, the supply of research scientists and engineers
is low in the NICs. In 1990 South Korea had around 33 research
scientists and engineers per 10,000 workers, Taiwan had 43, and
Singapore only 28 per 10,000. This compares with 87 per 10,000
for Japan, 77 in the US, 56 in West Germany and 44 in
Switzerland. In addition, expenditure on R&D as a percentage of
GDP in each of the four dragons lags behind most developed
countries
7
.
To sum up, despite the general upgrading of the technology
base the NICs are forced to manage structural weaknesses in their
electronics industries. Dependence on Japan for technology
inputs, components and market outlets is one set of problems.
Another is each country's delicate balance of trade positions
resulting from heavy imports from Japan. The tiny size of firms
in Hong Kong and Taiwan prevents heavy corporate R&D spending.
In contrast, the conglomerate structure of South Korean firms
makes them relatively slow and inflexible in international
markets, and has relegated them so far to relatively low value-
added electronics goods. Finally, while the engineering base of
each economy is strong, the NICs have yet to establish the
research and scientific strength to enable them to compete with
world leaders at the technology frontier.
7
For detailed evidence see NSTB (1991:12-17).
20
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
2. EAST ASIAN EXPORT-LED TECHNOLOGY DEVELOPMENT - A SIMPLE MODEL
2.1. The East Asian "Latecomer" Firm
Despite their difficulties, each of the dragons has made
historically unprecedented economic and technological progress
since the 1960s, especially in electronics. In Hong Kong, for
instance, exports of electronics increased nearly threefold from
$2.8bn in 1981 to around $7.5bn in 1990
8
. Although Hong Kong is
probably the weakest technologically of the four dragons, even
here many local firms are now able to design their own consumer
electronics and computer products. Some work in partnership with
OEM buyers, translating complex technical specifications quickly
into new product designs for manufacture.
Asian firms have not only achieved a remarkable upgrading of
their electronics capabilities but they have also narrowed the
technological gap between themselves and the market leaders in
Japan, the US and Europe. Some, such as Samsung and ACER, have
overtaken the traditional market leaders in some areas. There can
be little doubt that substantial and rapid technological learning
has taken place at the firm level in each country since the days
of poverty and underdevelopment in the 1950s and 1960s.
One largely unexplored topic, is the question of how East
Asian firms succeeded in overcoming the barriers to entry in
electronics and initiated the process of rapid and sustained
technological learning. Part of the answer to this question
revolves around the efforts, abilities and strategies of
"latecomer" firms in the NICs. (The issue of the latecomer firm
is explored in Parts 2 and 3. Relevant government policies are
touched on in Part 4). The latecomer firm can be defined in terms
of two sets of competitive disadvantages facing East Asian
companies, or "would be" start-ups:
8
Fok (1991:258), current prices.
21
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
First, latecomers are dislocated from the main international
sources of technology and R&D. They operate outside the world
centres of science and innovation and are behind technologically.
Their technological infrastructures are poorly developed, as are
their policy organisations and educational institutions.
Second, latecomer firms are dislocated from the mainstream
markets and demanding users in the advanced countries. They
suffer from underdeveloped small local markets and
unsophisticated users. Many studies show the importance of user-
producer linkages to innovation. The importance of user-producer
"clustering" in industrial development is stressed in various
ways by Marshall and Vernon, and more recently by Freeman, Porter
and Lundvall
9
. Latecomer firms had to develop outside these
international clusters of demand and innovation.
Very little is written or known about how latecomer firms
from the NICs overcame these disadvantages, forged inroads into
advanced markets and began their process of rapid catch-up
learning. Therefore, the following section offers a simple
preliminary framework as hypotheses for further exploration.
2.2. Export-led Technology Development: A Simple Framework
Figure 2 suggests a framework for analysing the nature,
direction and major factors in the process of technology
development by latecomer firms in the East Asian NICs
10
. The left
hand vertical axis represents total exports and employment in the
electronics industry for each country. As exports and employment
rise, wages and other costs are assumed to increase as a result
9
See for instance Marshall's work on industrial districts (1890: Chapter 10) discussed by
Freeman (1990), Vernon's study on externalities (1960), especially Chapter 5 "External
Economies", Lundvall's (1988) study on user-producer interaction and Porter's (1990) study on
the competitive advantage of nations.
10
The scheme is largely based on field research by the author in East Asia. Firms, government
agencies and academic institutes in each of the four NICs were interviewed and data were
collected on the history and growth of electronics in each country. Some supporting evidence is
put forward in Parts 3 and 4. However, the scheme should be viewed as initial arguments for
testing, rather than final results.
22
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
of bottlenecks, shortages and capacity limitations. The
horizontal axis represents technology accumulation through time,
beginning with simple activities such as assembly and graduating
towards more complex tasks such as process adaptation and
eventually development and research.
It is important to emphasise that no rigid or linear
progression occurs through time. R&D may begin fairly early on in
the scheme and there may be considerable feedback between early
and later stages
11
. However, the model suggests that there is a
general tendency among firms to begin with simpler tasks and
accumulate capabilities systematically, in a path dependent,
cumulative manner, with skills and knowledge gradually building
on each other.
The S-shaped diffusion curve is used to suggest that within
each country there will tend to be a start-up, take-off, growth
and maturation phase in electronics. During the start-up period
of the 1950s and early 1960s, firms slowly entered into the new
emerging industry. As they were sucessful, others followed in a
Schumpeterian "swarming" fashion. This led to a take-off of the
industry as a whole during the late 1960s and 1970s. Eventually,
industrial growth could slow down as larger market segments (e.g.
consumer electronics) mature, bottlenecks occur, wages rise and
the technology frontier is reached. However, there is no reason
why the curve should follow this particular path. This will
depend on the strategies and learning abilities of the latecomer
firms. Swarming may begin at the initial stage. Export growth may
not reach bottlenecks at any particular stage. As wages rise the
local market may begin to absorb a larger share of total
production (as occured recently in the Korean electronics and
automobile cases; EIU, 1990:23). Also, as in the case of the four
NICs, firms may overcome the rising labour cost problem by
relocating production overseas to lower cost areas and
concentrating on higher value-added production at home.
11
Forrest (1991) provides a useful summary of simple and complex innovation models incorporating
feedback loops and external factors, such as policy and the macroeconomy.
23
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
FIGURE 2
LATECOMER FIRMS - EXPORT-LED TECHNOLOGY ASSIMILATION FROM
BEHIND THE TECHNOLOGY FRONTIER
Process Simple Process Incremental Process Applied
Process
technology Assembly Adaptation Improvements Development Research R&D
Product Assessment Reverse Prototype Design New
Product
technology Selection Engeneering Development for Mfr. Design R&D
* No stages or linearity implied, but a general tendency to catch up cumulatively, through time
with
capabilities building systematically upon each other.
24
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
In Figure 2 the technology frontier is represented by the
right hand vertical axis. It is defined here simply as the
position at which substantial R&D is required to generate new
product or process innovations. This is a moving frontier
occupied by leading (e.g. Japanese and US) TNCs at any given
time. Through time, the latecomer firms gradually narrow the
technology gap between themselves and the leaders. By the 1990s,
some leading firms (e.g. Samsung and ACER) reached the frontier
in at least some product lines. At this phase, substantial
investments in R&D were required for them to compete with the
international market leaders. At the frontier stage, normal
innovation models will begin to apply
12
. At this stage, R&D
becomes an early and central part of the innovation process. It
is worth pointing out, that this scheme reverses traditional
linear ideas of innovation, and contrasts with complex feedback
models which place R&D at the centre of corporate innovation. The
route to the exploitation of science and technology on the part
of latecomer firms is the reverse of theories which stress R&D or
place R&D at the beginning of the innovation process. R&D
generally occurs in the latter stages of a catch-up learning path
beginning with simple tasks such as labour intensive assembly.
Although R&D may not be central to the initial activities of
latecomer firms, innovation is assumed to occur throughout the
process of catching up. This type of "behind-the-frontier
innovation" (e.g. waste reduction and recycling, workforce
multiskilling, cost reduction, smart designs for manufacture,
product redesigns and process engineering improvements) is vital
for catch-up development. Indeed, continuous innovation is a
necessary condition by which latecomer firms narrow the
technology gap between themselves and the market leader -
otherwise firms merely "keep up" instead of "catch-up".
Innovation is conditioned by factor prices (e.g. cheap labour and
costs) and their relative changes, the initial capital scarcity
12
That is, in so far as they apply at all. Forrest (1991) provides criticisms of a range of
innovation models. Criticisms include the assumption of linearity and the failure to include
feedback loops and policy factors. See Utterback & Abernathy (1975) for their classic
innovation model.
25
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
and above all the need to export. The tiny size of local markets
forces firms to learn to export to survive. Firms initially
compete intensely with each other for export orders on the basis
of cost and speed of delivery. As time progresses, firms compete
more on quality, reliability and own-design capabilities. Fierce
competition generates local innovations along the lines of
process improvements and adaptations, product design and
production engineering.
Not all firms need progress in the above manner. New start-
up firms (e.g. ACER) may "jump in" at advanced levels, missing
out the early stages. As the technological infrastructure and
overall base of human skills (i.e. absorptive capacity) improves,
new companies may by-pass earlier stages. Indeed, this process is
essential to the take-off and rapid growth of the industry. Spin-
offs from older firms, large firm diversification and new
experimental start-ups constitute the growing industrial base. In
the case of South Korea new divisions were set up by the
conglomerates. In Taiwan and Hong Kong large numbers of
"returnees" from US firms have proved to be an important
entrepreneurial resource during the 1980s
13
.
The use of a diffusion curve is not meant to imply that
there is any "automatic" process by which growth and technology
accumulation occurs. On the contrary, the central mechanism by
which the successful NICs grow is assumed to be the learning
efforts of local firms
14
. A sustained and systematic learning
effort is required by firms to assimilate foreign technology,
build up new competences and catch up with market leaders.
Learning begins with simple tasks such as assembly. Later on
firms learn to stretch production capacity, to change and improve
13
Interviews were carried out by the author at Hscinchu Science-based Industrial Park in Taiwan
in 1992 with a sample of 8 electronics start-up firms. Each firm had at least one or two US-
trained senior directors involved in the start-up and running of the companies. Usually trained
in engineering, these directors kept close business contact with their former employers in the
US.
14
The importance of learning to late industrialisation is born out by Amsden (1989) for South
Korea and Vogel (1991) for each of the four dragons. Fransman and King (1984) provide a
collection of studies which show the importance of learning to technological development.
Malerba (1992) defines learning and illustrates its economic significance.
26
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
production processes and to design and modify products.
Eventually, the leading firms build up in-house R&D capabilities
to enable them to compete on the technology frontier with major
international companies
15
.
Learning occurs not only at the technological level but also
at the marketing level. Firms learn to package, distribute and
market their goods, spurred on by the opportunities for
increasing the value-added
16
. Some begin by establishing marketing
departments to serve local markets or by setting up small
marketing "outposts" in the advanced countries (Wortzel &
Wortzel, 1981). Marketing, like technology, involves substantial
investments in learning skills and organisation. Ultimately, the
leading firms establish their own brand images (e.g. Hyundai and
Lucky-Goldstar of Korea) abroad and advertise directly to
customers in the advanced markets. By this stage, they are
indistinguishable from other market leaders.
The model also postulates a relationship between process and
product technology. Firms begin initially by selling production
capacity to TNCs or foreign buyers. This requires the absorption
of basic manufacturing, technician and management skills. Process
innovation will begin to occur after the basic production
operation capabilities are learned. Product capabilities are
assumed to follow. After firms accumulate process innovation
skills, they seek to improve the quality of products. They may
begin to modify designs to ensure "design for manufacturability".
Feedback occurs from product to process and vice versa in the
catch-up process.
The latecomer firm is motivated by profit and market
expansion opportunities. Vogel (1991) speaks of a sense of
economic and political "urgency" among NIC firms and governments,
as most adults recall the experiences of underdevelopment and
15
The exploitation of foreign channels of investment, technology and marketing is central to the
development strategies of firms in the four NICs. This discussed in Part 2.3.
16
For an evidence and analysis of the assimilation of marketing skills by East Asian firms see
Wortzel & Wortzel (1981).
27
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
poverty. They are driven to maintain the momentum of
industrialisation in order to sustain the unprecedented new
levels of prosperity. Entrepreneurs rush to compete as new market
opportunities emerge. In electronics and information technology,
technological learning is triggered by the opportunities and
threats posed by the rapidly moving frontier. The opportunities
lie principally in the rapidly expanding markets for electronics
goods and systems. The threat lies in loosing market by failing
to keep up technologically. As more East Asian firms approach the
technology frontier in the 1990s there is a need for ever more
advanced technology and research capacity. As discussed in Part
4, this need has led governments in each of the dragons to
increase R&D expenditures and to upgrade their science and
technology facilities in universities and government-run research
laboratories.
To sum up, the simple model attempts to describe the dynamic
relationships between the major factors which stimulate catch-up
progress. Firms, entrepreneurial ability and rapid technological
learning are central to progress in electronics.
2.3. Exploiting Foreign Channels of Export Marketing, Investment
and Technology
In order to enter international markets and obtain foreign
technology, latecomer firms utilise or "exploit" foreign channels
of technology and exports. Only by building up such channels can
firms overcome the two sets of latecomer difficulty described in
part 2.1.
2.3.1. Foreign buyers
Some of the main foreign channels for both market and
technology development in East Asia were large foreign buyers. In
1974 a study by Angus Hone showed that many local firms sold
28
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
their goods to large buying houses from Japan and the US. The
Japanese Zaibatsu buyers (e.g. Mitsubishi, Mitsui, Matubeui-Ida
and Michinen) set up buying operations in the NICs to purchase
cheap goods, as wages rose in Japan in the early 1960s. US retail
companies (e.g. J.C. Penny, Macy's, Bloomingdales, Marcor, and
Sears Roebuck) followed the Japanese, as did European firms such
as Marks and Spencer and C&A.
These large buyers were very important to local exporting
firms. Buyers often placed orders for 60% to 100% of the annual
capacity of exporting firms in sectors such as clothing,
electronics and plastics. The large buyers gave many exporting
firms in the NICs their first experience in export markets. They
also enabled firms to rapidly expand their production capacity
and obtain credit on the basis of guaranteed forward orders from
the buyers.
Following Hone's work, Wortzel and Wortzel (1981) showed how
exporters from the NICs gradually progressed from passively
selling low cost production capacity to actively promoting their
services to new buyers, to setting up marketing offices locally,
and eventually to the direct marketing of products into overseas
markets. Firms gradually developed their own in-house marketing
expertise and learned about the design of new products, not only
in the electronics industry but also in footwear, clothing and
other areas. By acquiring marketing skills firms were able to
increasingly capture the value-added associated with post-
production activities including packaging, distribution, styling
and marketing. These post-production activities are often a large
component of total value-added.
Foreign buyers not only assisted exporter into export
markets but they also supplied technology in various forms. From
offices located in Seoul and Taipei, they provided firms with
technical information on production and product designs as well
as advice on quality. Some buyers even provided help with cost
accounting procedures. The largest buyers visited factories
29
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
frequently and supervised the start-up and running of new
operations. Buyers also assisted with the purchase of essential
materials, capital goods and components.
2.3.2. Foreign direct investment (FDI)
In electronics the contribution of foreign investment to
value-added and production was smaller that of local firms
(except for the case of Singapore). In overall terms the
contribution of FDI to total capital formation in the four
dragons was very small. FDI contributed around 2% to South
Korea's total capital formation during the period 1976 to 1987
(James, 1990:11). Over the period 1965 to 1985 in Taiwan FDI
accounted for between 1.35% and 4.32% of total capital formation
and between 2.5% and 5.47% of private capital formation (Dahlman
& Sananikone, 1990:73).
However, FDI was highly significant in sectors such as
electronics and machinery. TNCs had the effect of initiating many
of the fast growing electronics sub-sectors (e.g. radio
production in Hong Kong and Taiwan). Foreign firms often acted as
demonstrators for local firms to imitate. TNCs assisted local
firms to grow through sub-contracting, OEM and licensing
agreements. In some sectors FDI accounted for a significant
proportion of manufacturing employment, total employment and
exports. For Taiwan, Schive (1990) calculates that FDI accounted
for between 9% and 16% of total manufacturing employment between
1979 and 1985, and for roughly 20% of manufacturing exports
between 1974 and 1982
17
.
Through the TNCs, FDI gave rise to a Schumpeterian process
of imitation and swarming on the part of local firms. In some
cases the sub-contracting relationships between TNCs and local
firms involved technical assistance and engineering support. TNCs
constituted an important channel of foreign technology transfer.
17
Part 3 discusses the contribution of TNCs to electronics employment and output in South Korea.
30
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
For Singapore, TNCs were the dominant market and technology
transfer channel. In Hong Kong TNCs remain very important. In
1989 they accounted for around 112 firms, 32,000 employees (half
the total electronics employment) and $1.1bn worth of investment
in electronics
18
. In the two larger economies, FDI and joint
ventures remain an important conduit for technology transfer,
especially the training of local managers and engineers.
2.3.3. Other foreign sources
Other less direct foreign sources of technology included the
recruitment of technical staff with experience in foreign firms,
foreign education, product copying and reverse engineering of
products by local firms. Licensing became more important to firms
in South Korea once their technological abilities had reached a
fairly sophisticated level. In Taiwan between 1952 and 1988 the
Government approved more than 3,000 licensing agreements (mostly
in electronics), many including technology transfer clauses
(Dahlman & Sananikone, 1990:78). Many local traders were also
important sources of technical and market information in Taiwan
and Hong Kong.
To sum up, the chief mechanisms by which firms achieved
export-led technology development was by exploiting a variety of
foreign channels of technology and marketing. Often the channel
was dual purpose: both a means of product marketing and a
mechanism of technology acquisition. This applied especially to
foreign buyers, OEM and joint ventures. However, these events did
not occur automatically. They resulted from the efforts,
investments and strategies of local firms keen to learn the
skills of marketing and technology.
18
Calculated from Fok (1991:259).
31
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
3. LATECOMER FIRM STRATEGIES IN ELECTRONICS
Having proposed a scheme for understanding the four NICs'
achievements in electronics, this section briefly reviews
descriptive evidence on the entry strategies of local firms. The
aim is twofold: to partially verify the simple model and to
examine the timing of electronics development as firms progressed
from electronics production to sophisticated software and
research intensive information systems.
3.1. Phase 1 - Industry Start-up (circa late 1959s and 1960s)
The South Korean electronics industry began with the
production of vacuum tube radios in the late 1950s. US TNCs
established wholly-owned operations in the mid 1960s to assemble
simple goods based on cheap labour assembly. US firms imparted
little technology to Korean companies according to Bloom
(1991:10). In contrast, Japanese firms helped "kick start" local
industry. Matsushita and Sanyo provided technical assistance to
Samsung and Goldstar in 1961 and 1962 to help set up transistor
radio factories. Toshiba, also from Japan, set up a joint venture
and began two major technical agreements with local electronics
companies in the late 1960s (Bloom, 1991:8).
While Goldstar began in 1958 as a wholly owned local firm,
Samsung Electronics began as a joint venture with Sanyo of Japan
in 1969. In this year Samsung sent 106 of its employees to Sanyo
and NEC for training in production knowhow for radios, television
sets and components. Under joint ventures with Sanyo, NEC and
Sumitomo of Japan, Samsung was able to absorb foreign technology
for a variety of consumer goods and components (Koh, 1992:23).
The Samsung venture offered the Japanese firms low cost capacity
expansion, cheap labour, low cost management, engineering and
overheads, as wages and other costs rose in Japan.
32
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Like South Korea, Taiwan, Singapore and Hong Kong began with
simple consumer goods such as transistor radios and black and
white televisions in the late 1950s and early 1960s. In 1963
Sanyo formed a joint venture with the Taiwanese importer of its
goods, initiating the production of white goods, air conditioning
products and audio products. In 1966 Philips (of the Netherlands)
set up a plant in the Kaosiung free trade zone in Taiwan to
produce resistors, capacitors and simple semiconductor
components. In 1970, Philips began producing black and white
televisions. RCA, an American firm, began producing memory
circuits in 1969 and black and white televisions and monitors for
re-export to the US in 1971. Other foreign investors in Taiwan
included Sanyo, Matsushita, Orion, Sony, Sharp and Hitachi (of
Japan) and General Instrument and Texas Instruments (of the US).
Local firms acted as sub-contractors and OEM suppliers to some of
these firms. Taiwanese managers, engineers and technicians were
trained up within the companies, generating an important human
resource for the future.
In Hong Kong, the first firms to enter were Japanese,
searching for cheap labour in the late 1950s, mainly producing
transistor radios. US firms followed the Japanese. By the mid-
1960s almost every major American producer of consumer
electronics and semiconductors had goods assembled in Hong Kong.
They were attracted not only by low cost labour but also low cost
engineering and management. Management and production technology
diffused rapidly to local firms during the 1960s and early 1970s.
Champagne Engineering Corporation became Hong Kong's first local
electronics manufacturer when it began making transistor radios
for Sony of Japan in 1959. By 1960 it began producing its own
radios, undercutting the Japanese (Henderson, 1989:80). Many
other Hong Kong start-ups soon followed suit.
Unlike the other three dragons, Singapore relied almost
exclusively on foreign investment. Philips began its commercial
activities in Singapore in 1951 with a trading office of four
staff. It began making transistor radios in the early-1960s,
33
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
diversifying into private branch exchanges during the late-1960s.
Many other US and Japanese firms entered during the 1970s to make
electronics, attracted by the location, the low labour costs and
the efficient air and sea ports. Texas Instruments and SGS (of
Italy) entered Singapore in 1969 to assemble and test
semiconductor components. NEC began producing semiconductors in
1976 (company interviews Singapore, 1992).
To sum up, during the start-up phase, foreign companies were
crucial as demonstrators for local firms. They helped initiate
the first electronics ventures and began training local engineers
and technicians. This in-house experience was to prove a valuable
source of foreign technology and management transfer.
3.2. Phase 2 - Take-off, from Assembly to Manufacture of Consumer
Goods and Components (circa 1970s)
During the 1970s new product innovations in the West were
exploited by latecomer firms in East Asia in combination with
foreign TNCs and buyers in search of low cost production. New
product lines included colour televisions, digital watches,
calculators, push-button telephones and television video games.
Some firms mastered the production technology for these goods,
although many in South Korea, Taiwan and Hong Kong relied on OEM
and buyers for technical assistance and market outlets. In
Singapore, the TNCs dominated the scene.
In South Korea several large Japanese TNCs entered during
the 1970s (including Sanyo and NEC) with wholly owned
subsidiaries. By 1976 around 50% of Korean electronics output was
produced in foreign or jointly owned factories, mainly Japanese
and American (Bloom, 1991:10). During this phase, the Korean
chaebol consolidated their links with Japanese electronics
producers. Samsung strengthened its connection with Sanyo. Anam,
now one of the world's largest semiconductor sub-contract
34
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
manufacturers, began making colour televisions with Matsushita of
Japan in 1973.
During the early 1970s, Samsung and Goldstar acquired
technology mainly through technology licensing and OEM
arrangements with Japanese firms (Bloom, 1991:10). However, even
at this early stage selective in-house R&D was used to help
master production and reverse engineer key products. In microwave
ovens, a detailed account shows how in 1977 Samsung began a
relentless trial and error development effort to master foreign
technology. The company undertook a painstaking search to win its
first international order (Magaziner & Patinkin, 1989). Samsung
is today the world's largest microwave oven producer. In 1977,
although there were no television stations in South Korea which
could broadcast in colour, Samsung's engineers gathered together
colour television sets from GE, RCA and Hitachi, in fact every
leading company, in order to help them design their own colour
television model for export.
In 1976 Philips began producing colour televisions in its
Taiwanese facility in Kaosiung. RCA began to transfer metal oxide
semiconductor (MOS) technology to local firms in Taiwan through
the government's Industrial Technology Research Centre (interview
ITRI, 1992). Sanyo's joint venture began making televisions in
Taiwan in 1969 and, later, video cassette recorders. In the early
1970s, IBM began purchasing large quantities of low cost sub-
assemblies and simple components from Taiwanese firms. Later in
the 1970s new engineering intensive local firms "jumped in" at
the (then) state-of-the-art. The best known example is ACER which
was established by Stan Shih under the name Multitech
International Corporation in 1976, with 11 engineers. By 1987
ACER's sales were $331m. Today ACER has extensive international
computer operations and a turnover of more than $1bn per annum
(Electronic Business, feb. 1993, p. 77).
In Hong Kong, during the mid 1970s successive waves of local
firms entered the fast growing consumer electronics industry,
often exporting to the US market. By 1982 there were more than
35
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
1,200 local electronics firms making calculators, computer parts,
digital watches, videogames and other consumer goods. Seventy-
seven percent of these were small companies employing less than
50 persons. The electronics industry also gave rise to a large
supporting industry in plastic mouldings, metal plating, metal
working and parts. By 1991 these firms employed around 30,000
workers in Hong Kong to add to the 64,000 or so employed in
electronics factories (Fok, 1991:259-264).
3.3. Phase 3 - Take-off of Professional Electronics, Computers,
Peripherals and Start-up of Design and Manufacture of
Semiconductors (circa 1980s)
During the late 1970s and 1980s the four dragons
consolidated their expertise in manufacturing. In Singapore,
process capabilities were acquired within the TNC subsidiaries
which dominated the industry. Alongside the improvements in
manufacturing capability, more complex design functions were
assimilated as domestic firms moved into the production of
industrial goods, PCs and peripherals. In the second half of the
1980s, companies increased their competitiveness in high quality
precision engineering products such as hard disk drives
(especially in Singapore), colour display terminals, video
graphic adaptors, television monitors and other computer
peripherals. While Taiwan and Hong Kong concentrated on higher
value-added niche markets, South Korean firms continued mass
producing relatively low end electronic goods.
Early Government policies in Korea had promoted local
industry through the Basic Plan for Electronics Industry
Promotion (1969 to 1976) and the Electronics Industry Promotion
Law (iniciated in 1973). As a result of these policies and the
growing strength of local firms, the contribution of foreign
firms to exports fell from 76% in 1969 to roughly 55% in 1972 to
less than 40% in 1980. Employment in foreign subsidiaries fell by
36
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
one third between 1976 and 1985, despite the 50% overall increase
in employment in electronics (Bloom, 1991:9).
With the rise of Korean firms, Japanese firms withdrew from
South Korea. In 1980 Matsushita pulled out of its joint venture
with Anam Electric. Sanyo withdrew from its joint venture with
Samsung in 1983. NEC withdrew from its venture with Goldstar
Electric in 1987. According to Bloom, Japanese firms left for a
variety of reasons: the special tax benefits to investors
introduced in 1972 were withdrawn; changes in Japanese firms'
strategies; and measures taken by the Korean Government to
encourage local in favour of foreign investment. However, Korean
firms remained weak in semiconductor and other components.
Foreign companies were involved directly in about 60% of total
production of components within South Korea in the late 1980s. By
this time components accounted for some 57% of total FDI in
electronics (Bloom, 1991:9).
In Taiwan PCs took off in the 1980s. IBM, Wang and Hitachi
purchased large quantities of finished goods and computer sub-
assemblies. By the late 1980s, Taiwan's main attraction was low
cost high quality engineering, rather than low cost labour. TNCs
purchased keyboards, television monitors, printed circuit boards
and printers. As in the other three NICs, Taiwanese production
shifted to more complex, professional equipment, requiring
precision engineering and electro-mechanical interfacing. In
Taiwan, the production value of computing and related goods
expanded to $6.1bn by 1990, overtaking consumer electronics which
stood at $2.29bn in 1990 (O'Connor & Wang, 1992:42 and 54).
In Singapore, as in Taiwan and Hong Kong, consumer goods'
technology became more complex during the 1980s, with foreign and
local firms making products closer to the introduction phase of
the product life cycle. Philips upgraded its Singapore facilities
by adding hi-fi audio equipment, colour televisions, compact disc
players, and new tuners and precision tools to its product range.
By 1991, Philips Singapore employed around 6,100 people in five
37
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
separate factories and sold more than $800m worth of goods,
mostly for export (Singapore Electronics Manufacturers'
Directory, 1992:76). AT&T began making high end cordless
telephones in 1986. By 1990 AT&T's Singapore's consumer
electronics division had become its world centre for new product
design, utilising automated manufacturing facilities and
computerised just-in-time systems for local OEM suppliers
(Interview, 1992). Partly as a result of its abundant supply of
high quality engineering, by the late 1980s Singapore had become
the world's largest supplier of hard disk drives. Competing US
and more recently Japanese firms "clustered" together attracting
many of the material and technology suppliers to Singapore.
During the 1980s, semiconductor process capabilities were
assimilated within foreign and local firms in the region. In 1984
SGS began fabricating semiconductors in Singapore. Since then it
has expanded and upgraded its local fabrication facilities to
become one of SGS-Thomson's world centres for semiconductor
production (Interview, 1992). In 1990 Texas Instruments joined
together with Canon (of Japan), Hewlett Packard (US) and
Singapore's Economic Development Board to fabricate leading edge
(4 and 16 megabit memory) semiconductors in Singapore.
Philips began a joint venture with the Taiwanese Government
in 1987 to form the Taiwanese Semiconductor Manufacturing
Corporation to make specialist circuits for local design firms.
In 1991, Texas Instruments and ACER formed a partnership to
produce memory circuits to supply local computer manufacturers.
The fast growing demand for microprocessors led Mitac (Taiwan's
second largest computer maker) to form an alliance with Intel of
the US in 1992 to make the new 80586 central processing chip (The
China Post, 31 july 1992, p. 9).
To sum up, during the 1980s local firms and their supporting
industries grew more technologically capable in several areas of
advanced systems production. Foreign semiconductor producers
upgraded their production facilities and formed joint ventures
38
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
with local industry to compete in the rapidly growing markets of
East Asia. However, many local firms remained weak in marketing
terms. In Taiwan, despite the wide availability of design
competence, OEM and foreign companies (including joint ventures)
still accounted for a large proportion of total electronics
output. In 1989 the six largest foreign OEM buyers in Taiwan were
(in order) IBM, Philips, NEC, Epson, Hewlett Packard and NCR
(III, 1991:39-43).
3.4. Phase 4 - From Electronics to Information Technology,
Software, Advanced Computing and Telecommunications (circa
1990s)
During the 1990s many firms in the four dragons are likely
to reach the technology frontier in electronic systems. Further
advances will require larger expenditures on R&D, both to
assimilated outside technologies and to generate new product
innovations quickly. Strategies will focus more on the early
introduction phase of the product life cycle, as firms try to
become leaders in particular markets. Leading firms will try to
make headway into complex applications and systems software for
computing and advanced telecommunications. These are areas which
the dragons are relatively weak. This strategy, currently
underway, will require an upgrading of science and technology
facilities both within firms and in the public sector. It can be
seen as a push into the higher stages of information technology,
based on the dragons strong, cumulative experience in electronics
systems production. This strategy is likely to involve more
partnership ventures between latecomer firms and the
international leaders. Partnerships will enable more Asian
companies to acquire further skills, overcome their technological
dependencies and build more direct links into advanced markets.
Already, the early 1990s have witnessed the improvement of
semiconductor process and design capabilities. Each of the four
economies has local, foreign or joint venture firms engaged in
39
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
the design anad manufacture of the latest semiconductors for use
in local systems. Advanced consumer and computer products now
originate from within firms in the dragons. Taiwan alone accounts
for 10% of the worldwide production of PCs and 22% of notebook
computer output (Far Eastern Economic Review, 24 sept. 1992, p.
88). As noted above, leading TNCs design and manufacture highly
advanced consumer and industrial goods in Singapore, using just-
in-time, automated plants.
Some firms have also tried to reduce their dependence on
Japanese technology. In South Korea, Daewoo reduced its reliance
on Japanese technology from 85% of total procurement in the mid-
1980s to 15% in 1992, by forging more links with companies from
the US and Europe (Business Week, 11 may 1992, p. 26).
Although the four dragons remain weak in marketing and
distribution, major South Korean and Taiwanese firms have
established marketing departments abroad and are investing large
sums in advertising and distribution to gain brand awareness. In
1991 ACER of Taiwan signed contracts directly with mass
merchandising outlets in the US, including Best Buy, Circuit
City, CompUSA, JC Penny, Bizmart and Staples, to sell its own
brand personal computers. ACER plans to begin direct marketing
operations in the US in 1993.
South Korean firms have begun to sell own-brand products,
some fairly complex ones, including semiconductors, PCs,
camcorders, video cassette recorders, compact disc players and
colour monitors. Hyundai of South Korea, ranked just below ACER
in terms of PC sales into the US, has set up an ambitious
marketing programme to double the company's US market share by
1994. To achieve this, it has relocated its entire PC business
from South Korea to San Jose and recruited an American ex-IBM
executive to run the operation (Electronic Business, feb. 1992,
p. 61). Nevertheless, with the exception of Singapore, OEM
remains a major outlet for exports.
40
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
With government help (see Part 4) firms in each of the four
NICs are attempting to generate new competitive advantage based
on R&D and complex software. As with previous advances, the new
skills will add to, rather than displace the dragon's present
advantages in low cost precision engineering, high quality design
and electromechanical interfacing. The 1990s are likely to
witness a rapid accumulation of R&D skills in leading firms,
government R&D institutes and the academic sector. Even in Hong
Kong a large new University of Science and Technology has been
set up to plug the R&D gap.
If these efforts are successful, during the 1990s the
dragons will gradually reduce their dependence on Japan and the
US fore core technology inputs. They could also make inroads into
more complex electronics hardware and begin to tackle advanced
computer and communications networking technologies. If the
strategy works more local firms will reach the technology
frontier and begin to directly exploit the research and science
base of R&D institutes to generate new breakthroughs in
information technology.
41
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
4. GOVERNMENT POLICIES
It would be wrong to convey the impression that NIC firms
succeeded in an economic or policy vacuum. On the contrary,
government policies of various kinds have had a profound
influence on the paths of technological achievement in
electronics, as well as emerging patterns of industrial structure
and ownership. In addition, policies to secure sound
macroeconomic management, favourable exchange rate regimes, high
savings, low inflation and low interest rates have created
conditions which enabled firms to succeed. In some cases,
targeted industry support projects may have assisted firms in
climbing up the technology ladder. In general, the development
policies followed by the four dragons are well researched and
need not be dealt with here. However, it should be noted that
serious disagreements exist on the scale, importance and outcome
of government industrial policies in each of the four countries
19
.
The purpose of this section is to highlight some of the
government policies which have proved important to the
development of electronics in the four dragons. They include
policies toward foreign investment, local industry, education,
competition and R&D. It should be stressed that policy mechanisms
and outcomes differ in each of the countries.
4.1. Industrial Support Policies, Competition And Industrial
Structure
South Korea began its development from a lower base than
that of Taiwan and the other dragons. As Levy (1988) shows,
market institutions in South Korea were very poorly developed at
the outset of industrialisation in the mid 1950s and early 1960s.
19
See for instance Galenson (1985) and Hughes (1987) for interpretations of economic development
and government policies in each of the Asian NICs. Wade (1990) looks in detail at Taiwan's
Government policies. Amsden (1989) focuses on South Korea's Government policies. Vogel (1991)
provides an historical, cultural and political view of how and why the four dragons succeeded.
42
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
The response by Government was to support the growth of the large
Chaebol by procurement, subsidies, market protection and
financial incentives (Amsden, 1989). The huge South Korean
conglomerates functioned to internalise transactions which might
otherwise have evolved in a market setting. By contrast, in
Taiwan trading and sub-contracting were relatively well
developed. The country began at a higher per capita income level
(70% higher than South Korea's in 1955; Levy, 1988:44). As in
Hong Kong, there were large numbers of Chinese traders willing
and able to exploit new export possibilities. In electronics,
development occured among the multitude of small family firms
which formed extensive sub-contracting relationships with each
other, with local traders and with foreign companies.
As Levy (1988:45) points out, South Korea lacked the
indigenous traders and sub-contractors present in Taiwan. Market
failure was therefore more prevalent in South Korea. Market
institutions were poorly developed and the initial investment
cost of entry was that much higher in South Korea. The solution
adopted by successive Governments in South Korea was to encourage
the growth of large competing oligopolistic firms with sufficient
resources to overcome entry barriers. The Japanese Zaibatsu
provided a nearby role model for South Korea to follow
20
.
Government policy therefore had a direct effect on the
emergence of the Chaebol and the resulting, highly concentrated
industrial structure in South Korea (one of the highest
worldwide). The South Korean Government employed financial
support measures, tax benefits, credits for R&D and training,
technology support and procurement of domestically produced goods
to help promote the Chaebol
21
.
Specific actions by the Korean Government in support of a
domestic electronics industry included the Electronics Industry
Promotion Law of 1973. This law helped set up the black and white
20
There are, however, significant differences in structure, finance and organisation between the
South Korean and Japanese conglomerates (Whitley, 1992).
21
For details of Korean Government policies see Lim (1992) especially p. 5.
43
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
television industry and encouraged industry to go beyond
assembly and acquire technology, to improve ouput quality and to
raise exports. As part of the fourth five year plan (1977 to
1981), in addition to the usual incentives, the Government: (i)
arranged foreign loans of $221.6mn; (ii) established an
industrial estate for the production of computers and
semiconductors; (iii) set up the Electronics and
Telecommunications Research Institute with a fund of $60m. In
1983 the Government protected the local market against
competition in computers and peripherals in other low-end
electronics in which Korean firms competed. The Government also
restricted FDI in electronics, except for joint ventures. As a
result joint ventures were formed by Hyundai, Daewoo, Goldstar
and Samsung (Amsden, 1989:83-84).
As in Taiwan, the South Korean Government helped promote
export trade through foreign buyers. For instance, in 1962 it
created and funded the Korean Trade Promotion Corporation
(KOTRA). KOTRA eventually established about 100 trade centres
around the world to supply potential foreign buyers with
information, contacts, product samples and Korean company
information (Rhee et al., 1984:52). KOTRA is situated in the
World Trade Centre in Seoul alongside 30 or so private trade
associations, including the Korea Electronic Product Exporters
Association. These associations track international market
developments and supply information to Korean exporters.
In South Korea, competition policies were introduced, not
always successfully, to curb the abuse of market power among the
Chaebol, to stimulate efficiency and to prevent monopolistic
practises (Amsden, 1989:130-131). Despite conflicts between the
state and the chaebol, as Amsden argues, the large conglomerates
were the product of a harmony of development interests between
Government and private enterprise (p. 136). Rising productivity
was stimulated by rapid growth, rivalry among the business
leaders and oligopolistic competition (rather than monopoly). The
competitive structure was not the result of market forces. On the
44
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
contrary, market structure and competition were the direct result
of the Government's development policy.
Singapore lacked an indigenous industrial base in the 1950s.
The Government therefore decided to attract foreign firms as part
of its industrialisation strategy. Singapore developed what Vogel
(1991:77) calls an administrative state. The Government set up
state-owned or controlled enterprises in several key sectors. In
electronics it left most decisions to private enterprise. TNCs
were attracted by incentives, targeted training schemes, and
infrastructural developments in telecommunications and transport.
By 1990 more than 3,000 TNCs (including 600 large firms) had set
up operations in Singapore. Many of the world's leading
electronics companies established manufacturing and headquarter
facilities.
The Taiwanese Government also took an active role in
electronics, promoting export-led development and taking measures
to assist traders and manufacturers to compete in world markets.
In 1970 the Government set up the Chinese External Trade Council
(CETRA) to carry out market research, to promote packaging and
design and to organise trade missions, seminars and trade fairs.
By 1989 CETRA had a staff of around 700, including 74 offices in
64 cities in 48 countries (Dahlman & Sananikone, 1990:50).
Recently, the Government has promoted technology development
through various joint ventures including the Neotech Development
Corporation (NDC) and the TSMC (discussed earlier). NDC began in
1983 as a venture between the Government sponsored Institute for
Information Industry and IBM to provide exclusive software
services to IBM. NDC projects included control boards for the IBM
daisy wheel printer and peripherals for banking and retailing
computers (Dahlman & Sananikone, 1990:55).
Each dragon followed a different policy path in electronics,
leading to sharply contrasting outcomes in terms of foreign
ownership and industrial structure. Hong Kong was the only
country to follow a laissez faire policy. Today it has a mixture
45
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
of small local firms and large TNCs. Singapore has a concentrated
industrial structure based on (mainly) large foreign TNCs. Taiwan
has the most dispersed industry structure, relying on small
locally owned companies for much of its electronics output. By
contract, South Korea has a very concentrated industrial
structure based on locally owned firms.
Despite the variety of policies, one common theme among the
four countries was the commitment to competition in electronics.
Each country prevented the growth of monopolies, curbed unhealthy
state-firm relations and promoted export-led competition among
electronics firms.
4.2. Education and Training
Another common factor in the success of the four dragons was
the emphasis placed on basic education and vocational (especially
engineering) training. Private, state, domestic and foreign
education all played a part in each country's progress. Many US-
trained Chinese engineers and scientists ended up in Taiwan after
the second world war. During the late 1970s and 1980s, many of
the wealthier families of Taiwan, Singapore and Hong Kong sent
their children to universities in the US. South Korean families
sent their children overseas to Japan as well as the US and
Europe, very often for training in engineering and management
(Vogel, 1991:72).
Engineers and engineering training were crucial in each
country's development. In Taiwan, engineers helped shape the
country's entire economic and industrial strategy. From 1949 to
1985 no less than ten of the fourteen ministers of economic
affairs were engineers by training (Vogel, 1991:27). Unlike
economists who stressed market forces, Taiwan's engineers
believed in government intervention and political and social
direction. They set out to ensure technology was acquired and
funded large technology intensive projects which could not be
46
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
justified on a comparative factor cost basis. They took the view
that economic development was a direct responsibility of
Government.
Under its Ministry of Education, Taiwan invested in
engineering training schools, usually located within the major
universities. Today, the leading computer and electrical
engineering departments are in the National Taiwan University
(Taipei), the National Tsing Hua University and National Chiao
Tung University (both in Hsinchu). Within the Hsinchu Science-
Based Industrial Park alone there are around 8,000 students and
faculty. The largest electronics firm, Tatung Corporation, has
set up its own university - the Tatung Institute of Technology in
Taipei - to train engineers and managers. In 1990 Taiwan's
engineering school's supplied about 9,000 graduates with degrees.
A further 5,000 obtained degrees in computer science and
mathematics. Students obtain a grounding in mathematics, science
and basic engineering. Some go on to graduate research supported
by the National Science Council (IEEE Spectrum, june 1991, p.
61).
At independence nearly one half of all Koreans were
illiterate. The country also lacked an adequate supply of
managers and engineers (Vogel, 1991:48 and 55). Studies show that
Korean industrial development was facilitated by the Government's
commitment both generally to education and, more specifically, to
the supply of well-trained engineers (Amsden, 1989:238-239).
As noted in Part 1, a large number of engineers are supplied
by Singapore's educational institutions and universities. For a
long time the Singapore Government has involved large foreign
firms in setting up and running its vocational educational
institutes. Philips first educational links began in 1971 with a
four year craft apprenticeship programme organised with the
Ministry of Education. This was specifically designed to increase
the supply of human resources in crafts and engineering for
Philips. In 1975 the Government's Economic Development Board
47
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
(EDB) and Philips set up the EDB-Philips Government Training
Centre for precision engineering. By 1991 the EDB operated five
joint training institues with an enrollment of 2,500 students:
the French Singapore Institute, the German-Singapore Institute,
the Japanese-Singapore Institute, the Precision Engineering
Institute and the Philips-Government Training Centre. These
institutes provide two and three year training courses in tool
and die and precision machining, plastics technology, factory
automation, mechatronics and industrial electronics.
Engineering courses have become increasingly complex as
industry has evolved in the four NICs. In Singapore, in addition
to craft and technician programmes, courses now include advanced
software training and computing. To encourage TNCs to upgrade to
high value-added electronics and R&D, the Singapore Government
recently set up the Institute for Manufacturing Technology, the
Information Technology Institute, the Institute of
Microelectronics and the Magnetics Technology Institute. The
advisory boards usually include managers of the TNCs who advise
on specific projects and overall direction. In Taiwan and Korea,
as in Singapore, the curricula in engineering schools tend to
reflect the current and foreseen production needs of industry
(e.g. the technology for hard disk drives, PC manufacture,
computer printers and software) rather than basic research or
science.
Today, the phenomenon of "jumping ship" is well known in
Taiwan. This occurs when managers trained up in US corporations
return to Taiwan to start up their own firms and research
projects. The head of the Government's ITRI, Morris Chang, is
well known in the US after a distinguished career in Texas
Instruments an GE. Start-up firms such as Microelectronics
Technology (established in 1983) retain their links with US
corporations including HP, Harris and TRW. The founders of TECOM
(established in 1980) originated from Bell Labs and IBM. The
directors of Macronix (set up in 1989) were from Intel and VLSI
Technology (Interviews at Hsinchu, 1992).
48
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Similarly, the Samsung Advanced Institute of Technology
(SAIST), established in 1987, has successfully recruited top
level Korean staff, mostly from the US, to direct research into
computers, communications, semiconductors and other high
technology areas. SAIST has a budget of around $140m per annum
and employed around 2,200 staff in 1990. It follows a deliberate
strategy of recruiting back Korean engineering and scientific
talent from abroad (Interview SAIST, 1991). The popular press in
the dragons now speak of the "brain gain", rather than "brain
drain", when referring to the pool of local engineering talent in
foreign firms abroad.
49
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
5. CONCLUSIONS AND POLICY IMPLICATIONS
Considerable care must be taken when trying to draw policy
lessons from the experience of the four dragons in electronics.
It is not possible to generalise form the case of electronics to
other sectors. Nor is it possible to generalise from the
experience of the four Asian NICs to other developing countries
within Asia or in other regions of the world. Indeed, as shown
above, there are considerable difference among the dragons in
terms of corporate strategy, government policy, industrial
structure, patterns of innovation and industrial ownership.
However, some common success factors arise which are worth
general consideration and which may have some bearing on the
position of other industrialising countries.
In each case technology accumulation in electronics was
linked to exports and foreign channels of investment. Foreign
buyers and OEM arrangements served a dual purpose. On the one
hand they provided an outlet to the international market,
assisting firms to overcome market entry barriers (e.g.
distribution, packaging, advertising and marketing). On the other
hand they served as a direct channel for technology transfer,
allowing local firms to gradually learn electronics technology.
OEM acted as a "training school" for many local companies. Other
important foreign channels included FDI, joint ventures and
licensing. Local firms from Taiwan and Hong Kong imitated foreign
firms and supplied TNCs under sub-contracting arrangements. These
mechanisms were exploited by local firms to bootstrap their way
into electronics markets. Korean firms used joint ventures and
OEM arrangements to overcome entry barriers and accumulate
technology.
For other industrialising coutries, these events show that
export orientation and export-led growth was intimately linked to
technology assimilation and learning. Local firms in the dragons
exploited the various foreign market and technology channels,
50
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
enabling them to follow and eventually catch up with the world
market leaders in electronics. Export-led technology development
acted as a focussing device for local firms, guiding investment
choices and linking technology investments to the international
market.
Under import substitution (IS) policies it is difficult to
see how foreign market channels can be used to "pull" technology
along in this manner, unless IS is coupled to export-led
development as in the case of Taiwan and South Korea. Unless the
local market is very large, rapidly growing and sophisticated,
local firms under IS may find themselves falling further behind
the technology frontier as it advances.
While foreign channels provided the opportunity, local firms
were the foundation upon which the dragons developed (with the
exception of Singapore). Local firms generated most of the
employment, exports and value-added in electronics. Local
companies exploited the foreign channels of marketing and
technology. Without them, South Korea, Taiwan and Hong Kong
would, in all probability, not have succeeded in electronics.
Foreign investment was a necessary but insufficient condition for
success. The TNCs helped "kick start" local industries, transfer
technology and train local technicians, engineers and managers.
But local firms forced the pace and scale of progress.
The implication for other countries emerging from IS
regimes, is that investment liberalisation alone may not be a
sufficient condition for electronics development. The two largest
dragons, Taiwan and South Korea, controlled and restricted the
inflow of FDI. FDI was used judiciously to assist in the
development process. Indeed, FDI only constituted a tiny
proportion of total capital formation in these two economies.
Therefore, without the exploitation of foreign investment by
local companies, liberalisation alone may be insufficient to
produce the type of industrial development witnessed in the
dragons.
51
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
Regarding the process of innovation in electronics, the
experience of the dragons may well prove instructive for other
countries. Although, there were no rigid "phases" of development,
there was a tendency for industry to move from simple assembly to
more comnplex tasks involving production engineering, product
design, prototype development and R&D. Firms progressed from the
mature to the earlier stages of the product life cycle as
capabilities were accumulated. Technology was gained in a
gradual, path dependent and cumulative manner. Indeed, many firms
began in "pre-electronic" activities (e.g. assembly and testing)
and gradually moved to the manufacture of simple, then complex
electronic systems. Only recently have leading firms entered
software intensive information technologies and advanced
semiconductors. The path to advanced information technology was a
gradual one - and still largely incomplete. For other countries,
this suggests that to fully exploit the industrial development
potential of electronics, complementary basic industrial and
engineering skills are required (e.g. plastic moulding,
electromechanical interfacing, precision machining and fine
engineering). These skills are needed to produce electronic
goods and systems. Their accumulation is also a route towards
more complex, higher value-added electronics and information
technology.
This "overlap" of technological paradigms has implications
for training. It suggest that for electronics and information
technology, a strong supply of pre-electronic craft and
production engineering skills is needed. Electronics
manufacturers in the dragons benefited from government policies
which emphasised craft and engineering training in academic
institutes and government laboratories connected with industry.
One of the key advantages of the NICs is their abundant supply of
high quality engineering talent.
Regarding industrial structure and strategy, there was
considerable variety among the four dragons. Taiwan relied on a
52
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
multitude of small, fast moving firms supplying niche markets.
Some of these have become fairly large, although they are still
tiny by South Korean standards. Hong Kong relied on a mixture of
foreign TNCs and small local firms. These experiences suggests
that some of the disdvantages of small scale can be overcome in
electronics and that there are proven alternatives to the
Japanese and South Korean large firm "models" of electronics
development.
Competition was more important to electronics success than
firm size and industrial concentration. Intense competition for
export markets occurred in each of the four NICs. Government
policies in each country ensured that competition occurred among
electronics suppliers and that monopolisation and collusive
practises were curbed. This proved more difficult in South Korea,
given the size and influence of the chaebol. In Taiwan and Hong
Kong the family-based "overseas Chinese" firms tended to promote
a climate of competition.
Regarding industrial policy, three of the four dragons
(except Hong Kong) practised systematic policy intervention (e.g.
tax breaks, subsidies and marketing assistance); South Korea and
Taiwan practised import-substitution and FDI restrictions.
Singapore subsidised the entry of foreign TNCs. Hong Kong is the
only example of a laissez-faire, free market approach. The lesson
for other countries appears to be that whatever the pattern of
industrial structure, FDI, ownership and intervention, strong
competition among firms is essential for electronics development.
53
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
BIBLIOGRAFY
AMSDEN, A. (1989) Asia's Next Giant: South Korea and Late
Industrialisation. New York, Oxford University Press.
BLOOM, M. (1991) Globalisation and the Korean Electronics
Industry. Paper Presented to EASMA Conference. Fontainbleu,
INSEAD, 17-19 oct.
BUSINESS WEEK, various issues.
CHAPONNIERE, J.R. (1992) The Newly Industrialising Economies of
Asia: International Investment and Transfer of Technology.
STI Review, n. 9, apr. Paris, OECD.
CHAPONNIERE, J.R. & FOUQUIN, M. (1989) Technological Change and
the Electronics Sector - Perspectives and Policy Options for
Taiwan. Report Prepared for OECD Development Centre Project
"Technological Change and the Electronics Sector -
Perspectives and Policy Options for Newly-Industrialising
Economies". Paris, OCDE, may.
THE CHINA POST, 31 july 1992, p. 9.
DAHLMAN, C.J. & SANANIKONE, O. (1990) Technology Strategy in the
Economy of Taiwan: Exploiting Foreign Linkages and Investing
in Local Capability. World Bank (preliminary draft).
EIU (1990) South Korea, n. 1, 1990. Economist Intelligence Unit
Country Report.
ELECTRONIC BUSINESS, various issues.
ELECTRONIC TIMES, 24 aug. 1989.
FAR EASTERN ECONOMIC REVIEW, 24 sept. 1992.
54
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
FOK, J.T.Y. (1991) Electronics (chapter 16). In: Doing Business
in Today's Hong Kong, 4th Edition, American Chambers of
Commerce, dec.
FORREST, J.E. (1991) Models of the Process of Technological
Innovation. Technology Analysis an Strategic Management,
3(4):49-453.
FORTUNE, 7 oct. 1991.
FRANSMAN, M. & KING, K. (eds.) (1984) Technological Capability in
the Third World. London, Macmillan.
FREEMAN, C. (1990) Networks of Innovators: a Synthesis of
Research Issues. International Workshop on Networks of
Innovators. Montreal, Canada, may.
GALENSON, W. (ed.) (1985) Foreign Trade and Investment: Economic
Development in the Newly Industrialising Asian Countries.
Wisconsin, University of Wisconsin Press.
HENDERSON, J. (1989) The Globalisation of High Technology
Production: Society, Space and Semiconductors in the
Restructuring of the Modern World. London, Routledge.
HONE, A. (1974) Multinational Corporations and Multinational
Buying Groups: Their Impact on the Growth of Asia's Exports
of Manufactures - Myths and Realities. World Development,
2(2):145-149, feb.
HUGHES, H. (ed.) (1987) Achieving Industrialisation in East Asia.
Cambridge, Cambridge University Press.
IEEE Spectrum (1991) Special Report: Asia Power, june, p. 24-66.
55
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
III (1991) Information Industry Yearbook. Taiwan, Institute of
Information Industry.
JAMES, W. (1990) Basic Directions and Areas for Cooperation:
Structural Issues of the Asia-Pacific Economies. Asia Pacific
Cooperation Forum. Seoul, Korea, Korea Institute of
International Economic Policy, 21-22 june.
KOH, D.J. (1992) Beyond Technological Dependency, Towards and
Agile Giant: the Strategic Concerns of Samsung Electronics
Co. for the 1990s. Msc. Thesis. England, SPRU, University of
Sussex (unpublished).
JUN, Y.W. & KIM, S.G. (1990) The Korean Electronics Industry -
Current Status, Perspectives and Policy Options. Report
Prepared for OECD Development Centre Project "Technological
Change and the Electronics Sector - Perspectives and Policy
Options for Newly-Industrialising Economies". Paris, OECD,
may.
LEVY, B. (1988) Korean and Taiwanese Firms as International
Competitors: the Challenges Ahead. Columbia Journal of World
Business, spring, p. 43-51.
LIM, Y. (1992) Export-led Industrialisation: the Key Policy for
Successful Development. UNIDO, Global Issues and Policy
Analysis Branch. Paper Presented at Wilton Park Conference.
Asian Competition with Europe and North America, 14-18 dec.
LUNDVALL, B. (1988) Innovation as an Interactive Process: from
User-Producer Interaction to the National System of
Innovation. In DOSI, G.; FREEMAN, C.; NELSON, R.; SILVERBERG,
G. & SOETE, L. (eds.) Technical Change and Economic Theory.
London, Frances Pinter.
56
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
MAGAZINER, I.C. & PATINKIN, M. (1989) Fast Heat: How Korea Won
the Microwave War. Harvard Business Review, jan.-feb., p. 83-
92.
MALERBA, F. (1992) Learning by Firms and Incremental Technical
Change. The Economic Journal, v. 102, july, p. 845-859.
MARSHALL, A. (1890) Principles of Economics. London, Macmillan.
NSTB (1991) Science and Technology: Windows of Opportunity.
National Technology Plan. Singapore, National Science and
Technology Board.
O'CONNOR, D. & WANG, C. (1992) European and Taiwanese Electronics
Industries and Cooperation Opportunities. Paper Presented at
Sino-European Conference on Economic Development, may.
PORTER, M. (1990) The Competitive Advantage of Nations. London,
Macmillan.
RHEE, Y.W., ROSS-LARSON, B. & PURSELL, G. (1984) Korea's
Competitive Edge: Managing the Entry into World Markets.
Baltimore, John Hopkins Press.
SCHIVE, C. (1990) The Foreign Factor: the Multinational
Corporation's Contribution to the Economic Modernisation of
the Republic of China. Stanford, California, Hoover
Institution Press.
SINGAPORE ELECTRONICS MANUFACTURERS DIRECTORY, 1992.
SINGAPORE INVESTMENT NEWS (1991) Precision Engineering
Supplement. Singapore, Economic Development Board.
UTTERBACK, J.M. & ABERNATHY, W.J. (1975) A Dynamic Model of
Process and Product Innovation. OMEGA, The International
Journal of Management Science, 3(6):639-656.
57
ESTUDO DA COMPETITIVIDADE DA INDÚSTRIA BRASILEIRA
IE/UNICAMP - IEI/UFRJ - FDC - FUNCEX
VERNON, R. (1960) Metropolis 1985: an Interpretation of the
Findings of the New York Metropolitan Region Study.
Cambridge, Massachusetts, Harvard University Press.
VOGEL, E.F. (1991) The Four Little Dragons: the Spread of
Industrialisation in East Asian. Cambridge, Massachusetts,
Harvard University Press.
WADE, R. (1990) Governing the Market: Economic Theory and the
Role of Government in East Asian Industrialisation.
Princeton, New Jersey, Princeton University Press.
WHITLEY, R. (1992) Business Systems in East Asia: Firms, Markets
and Societies. London, Sage Publications.
WORTZEL, L.H. & WORTZEL, H.V. (1981) Export Marketing Strategies
for NIC and LDC-based Firms. Columbia Journal of World
Business, spring.
Livros Grátis
( http://www.livrosgratis.com.br )
Milhares de Livros para Download:
Baixar livros de Administração
Baixar livros de Agronomia
Baixar livros de Arquitetura
Baixar livros de Artes
Baixar livros de Astronomia
Baixar livros de Biologia Geral
Baixar livros de Ciência da Computação
Baixar livros de Ciência da Informação
Baixar livros de Ciência Política
Baixar livros de Ciências da Saúde
Baixar livros de Comunicação
Baixar livros do Conselho Nacional de Educação - CNE
Baixar livros de Defesa civil
Baixar livros de Direito
Baixar livros de Direitos humanos
Baixar livros de Economia
Baixar livros de Economia Doméstica
Baixar livros de Educação
Baixar livros de Educação - Trânsito
Baixar livros de Educação Física
Baixar livros de Engenharia Aeroespacial
Baixar livros de Farmácia
Baixar livros de Filosofia
Baixar livros de Física
Baixar livros de Geociências
Baixar livros de Geografia
Baixar livros de História
Baixar livros de Línguas
Baixar livros de Literatura
Baixar livros de Literatura de Cordel
Baixar livros de Literatura Infantil
Baixar livros de Matemática
Baixar livros de Medicina
Baixar livros de Medicina Veterinária
Baixar livros de Meio Ambiente
Baixar livros de Meteorologia
Baixar Monografias e TCC
Baixar livros Multidisciplinar
Baixar livros de Música
Baixar livros de Psicologia
Baixar livros de Química
Baixar livros de Saúde Coletiva
Baixar livros de Serviço Social
Baixar livros de Sociologia
Baixar livros de Teologia
Baixar livros de Trabalho
Baixar livros de Turismo
