The Role Played by Asia Pacific State in Upgrading Technologies - Essay Example

? The Role played by Asia Pacific in upgrading technologies in the Asia Pacific The emergence of countries in Asia as important pivot points for innovation offshoring indicates a profound shifting of the change of gravity in Asia Pacific countries economy and to the larger extent the global economy (Kitching, 2001). This is owed to the success of the region as a primary global factory in innovations and industry as diverse as footwear, agro-industries, steel, electronics, machine tools, IT-enabled business services, cars, electronics, and software, as well as the supporting role Asia Pacific governments have continued to provide (Acocella, 2005). The integration of firms in Asia Pacific into GPNs have greatly stimulated industrial development. Operating under GPNs, Asia Pacific firms have been successful at tapping into the leading markets in the world (Barbara, 2008).  Through this, these firms have been able to compensate for their small size domestic market. Through network participation, Asia Pacific Firms have been able to access to the leading-edge technologies, as well as best-practice management approaches (Barbara, 2008). This has created pressures, incentives, as well as new opportunities for the Asia Pacific network suppliers to update and upgrade their management and technological capabilities and the workers’ skill levels. Studies indicate that Asia pacific governments have been behind the most of the scientific innovations in these regions. The focus of this paper to discuss the role of Asia Pacific countries in upgrading technologies in the Asia Pacific region. The role of governments continues to be a source of development of industrial capabilities and economic growth in Pacific Asia region. However, the 2010 downturn in the electronics industry and the 1997 global financial crisis brutally exposed the model of technological diversification. A country becomes more vulnerable (1) if it becomes highly integrated into GPN (2) if its large share of exports is purely electronic, and (3) if it is largely dependent on exporting products to the United States for purposes of getting revenue (Iansiti, & West, 1997). Additionally, returns for the factory model are also decreasing. As capital intensive for these investments increase, new employments are generated (Iansiti & West, 1997). It also causes the decline in local spillovers to domestic suppliers as global contract manufacturers contribute their services to the integrated manufacturing, which in turn increases the share of production of the global industry. Moreover, much of the investments of global factory has remained footloose leading to relocation of new low-cost locales and plant closure. Asia Pacific firms heavily rely on Japanese, European, and American firms as their dominant source of new technology. This shows why heavy concentration of innovative capabilities, R&D, and intellectual property rights being centered on the U.S (Iansiti, & West, 1997). For Asia Pacific, this led to razor-thin margins due to hefty licensing fee levied by the dominant global brand firms. A broad consensus has emerged across the region that electronic industries within Asia region need to upgrade to somewhat higher value-added technologically more attractive services, products and production stages (Chomsky, & Robert, 2011). These changes, however, require strong innovative capabilities to be developed. In order to achieve this, the leading software and electronic companies and the Asia Pacific states have sought to improve and develop knowledge, skills, and management techniques required to help create and commercialize new services, products, processes, equipment and business models (Chomsky & Robert, 2011).  The states and these companies have focused on what is feasible (Chanda, 2007). This has been done with the view that the region as a whole has continued to substantially lag behind in the development of the broad-based science and technology systems (Chanda, 2007). Instead of directly adopting technology leadership strategies, in order to effectively compete head-on with renowned technology leaders in the world, businesses and states in Asia Pacific region have focused on diversification in technology. Arguably, this was the important foundation for the success of the region in attracting innovation offshoring. Diversification in technology involved expanding the product's or company’s technology base into a wider range of technology area focusing on development of products and applied research that draw on the process and component technologies, which are not difficult to acquire or new to the world. Such technology diversification has enabled Pacific and Asia Pacific firms to build on their strengths in process development, prototype development, and manufacturing (Chanda, 2007). These firms have also been successful at leveraging their experience in the provision of knowledge-intensive support services needed to be able to raise funds and to manage customer relations and supply chains, development of human resource, and knowledge exchange. Most importantly, because of the government support, firms in this region have used the technology diversification to accumulate capabilities to assimilate, implement, and improve foreign technology (Kohler, & Emilio, 2003). Studies indicate that the supportive policies provided by Asia Pacific governments have enabled firms in this regions to seize opportunities to improve their performance in the networks (Honday, 1995). For instance, the Hong Kong government has applied the laissez-faire strategy, which differs with other governments in Asia Pacific regions. The Hong Kong government has confidence in the free market economy because of doctrine of free market. Its approach makes it somewhat more general and passive than other countries within the same setting. The government of South Korea, on its part, plays an active role in its local technological development. It has even gone ahead to develop and implement the systematic technology policy for upgrading technology (Honday, 1995). This government support has resulted into impressive gains in science and technology of the Third World countries. The regional rate of growth in trade, Growth in gross domestic product, and inward foreign direct investment, which has surpassed even the pace the region achieved in 1980s, and 1990s. The region has increasingly become a sophisticated market for other goods and services. Governments of Asia Pacific countries have provided an enabling environment for exposure to innovation offshoring (Honday, 1995). This has provided room for large global organizations to set up innovative offshoring in Pacific and Asia Pacific. For example, the R&D share in Asia Pacific for the United States firms has moved from 3% of $12billion in 1995 to about 12% of $20 billion in 2003. A recent study indicate that by 2004, China had risen to third position in offshore R&D location, after the UK and the U.S.A. followed by India in sixth position, and Singapore in ninth position. Currently, many firms have at least an R&D facility in India, China and Singapore (Ivon Braun & Eugenio, 2007). In Asia Pacific and Pacific States, most of the R &D offshoring is concentrated in industries that deal with electronics (Granstrand, 1998). China dominates in hardware R&D with India attracting R&D software. China in the third states, in terms of location of R&D internationalization of the non-equity forms after the U.S and the UK but ahead of France and Germany with India being ranked equal to Japan Ivon (Braun, & Eugenio, 2007). The Asia Pacific region has a proud historical achievement especially in science and technology (Granstrand, 1998). However, for a long time, this region has lacked an enabling environment for scientific and technological creativity, and the neglect of science of technology. In recent years, there has been a resurgence of innovations in many countries of the Asia Pacific and pacific region though not all. Most of these countries in these region have built key scientific and technological capacities. Diversities in such scientific and technological capacities among these countries has stimulated the opportunities for economic co-operation (Granstrand, 1998). The scientific and technological partnership within the region and at a global level has been stimulated within the context of imaginative and practical regional vision in the utilization of science and technology for sustainable development of the region. The government of Asia and the top software and electronic company did mobilize the investment substantial to deter the infrastructure, and supporting the leading-edge R & D programs in few areas of priority (Granstrand, 1998). Singapore, South Korea, Taiwan, and Hong Kong with small Nordic countries in Europe have made the entire globe a broadband access. Some areas within India and China have attracted offshoring innovation and have advanced at a faster rate. Additionally, the R & D gross domestic expenditure increased in Asia among the five leading exporting electronics countries with Singapore and China faces a fastest rise. This resulted in a massive growth, in terms of output. The scientific paper, number of potential investors within Asia, and the paper ratio increased. The end product was that the new innovation clusters emerged for not only the broadband technology, but also the application in Singapore and South Korea for digital consuming devices, and mobile communication in Taiwan, Korea, and China. This was also inclusive of the software engineering and the embedment of the software development inside India. Other Asian government together with the leading companies kept concerted efforts in supporting the research programs and developing the alternative standards (Granstrand, 1998). For instance, in telecommunication, the four leading players of South Korea, are always engaged in basic efforts of becoming the ley content and platform developers for the complex system of technology especially the mobile communication. Such efforts have established considerable potential in developing he complex system of technology that are accumulated in the research laboratories such as the telecommunication, and electronics Institute of Research, and in the R & D chaebol labs. Another example is TDX, which is a system of switch, and communication founded by the Qualcomm code-division access (CDMA) standards. A good example is when China tries to establish the alternative hard generation 3G wireless and digital standards that are referred to as TD-SCDMA. The Dating Telecommunication and enterprise that is owned by the Chinese state enterprise and the institute of research of the Ministry of industrial information development established standards of the time division code-division synchronous multiple access (TDSCDMA). In turn, the union of international Telecommunication approved it in the year 2000. In order to speed up the strategy implementation, Dating established a number of collaborative agreements with the industrial global leaders for conducting the R & D based in China. It also established a joint venture between Texas instruments, Nokia, Taiwanese ODM or the (original design manufacturing) suppliers, which is a joint venture between Samsung and the Philips, and the agreement of licensing with ST microelectronics. The agreements give the Chinese Company access to some critical designs of the building block. These linkages are the illustration of the vital function that the programs play in the offshoring investment attraction (Iansiti, & West, 1997). The significant innovation attraction for the Offshoring investment comes as a result of the impressive improvement in the regional pool of talents. Establishing the strengths that already exist in manufacturing, firms in Asia have established a huge range of the capabilities and skills that are specialized. Such skills include the resource management, and the quality control, customer relations, and the chains of supply. For the country to remain in the GPN, the firms in Asia had to shift to the development of products, and increasing the system design together with the circuit intergraded design (Barbara, 2008). The Asia proximity, and the vast manufacturing the base is a vital asset from the development of the product. It focuses on the production and manufacturing of the commercialized samples. The firms in Asia have established a huge development progress in the specialized skills that are needed for the design projects. The National Science board, asserted that Asia is one of the leading countries in exporting electronic and has expanded substantially (Iansiti, & West, 1997). The country has high systems of education and high sectors of technology in the efforts of developing the competitive international excellence centers. For decades, these countries were key sources of the international technical and mobile scientific talent. However, some of the countries have established programs of design in order to retain the personnel thus attracting different people from various sections. For example, the number of engineers who graduated in China are twice those that graduated in the United States. China has massive numbers of individual at Ph.D. level in the engineering and science sectors. This is the most critical display of the capabilities of a country. One recent report reported that in the year 1995 to 20003, there were over 48,740 individuals who enrolled in the engineering Ph.D. programs. This enables China to give out high numbers of persons with the doctorate degrees (Chomsky, & Robert, 2011). The rapid expansion of this kind will come as a result of a reduced quality of the graduate education in many universities. Another study argued that whenever there exist negative factors about twenty five percent of India’s graduate engineers are suited to work at the global corporations, whereas the current portion in China carries only ten percent (Glyn, 2006). This study showed ha the existing supply of the suitable engineers in countries with low wages display a three quarters of the required talent of engineers in countries with high wage (Glyn, 2006). This percentage can be classified as being higher than forty four percent of the countries with low wage in comparison to the required supply of young engineers in countries with a high income. Additionally, the young engineers supply has displayed a trend of growing at a faster rate in countries with low wage in comparison to countries with a high wage (Glyn, 2006). Conclusion Asia Pacific countries can proudly claim distinguishing connections with key achievements in the field of science and technology. In centuries ago, some of the Asia pacific countries were key pioneers in the field of science and technology. These countries are renowned for scientific discoveries in the fields of astronomy, mathematics, and technological related inventions such as printing, gunpowder, paper, and materials all of which were important in the unfolding of civilization and history. However, centuries later, scientific and technological innovations in the region gradually faded. This left the region a backwater in regard to scientific culture and development of new inventions. In the recent years, ones again, there has been notable resurgence of technological innovations in most of these countries though not all. The primary objectives of various key players including the government, non-governmental organizations, and financial firms has made this possible. These players have helped stimulate development of science and technology in most of the countries in these Asia pacific region, building more speedily and further on advances already made in the last two or three decades. Governments such as the South Korea and Hong Kong have been the pinnacle of these scientific and technological achievements. Supportive policies provided by Asia Pacific governments have enabled firms in this regions to seize opportunities to improve their performance in the networks. This has provided room for large global organizations to set up innovative offshoring in Pacific and Asia Pacific. The significant innovation attraction for the Offshoring investment comes as a result of the impressive improvement in the regional pool of talents. Establishing the strengths that already exist in manufacturing, firms in Asia have established a huge range of the capabilities and skills that are specialized. References Acocella, N., 2005. Economic policies in Pacific Asia. Cambridge: Cambridge University Press. Barbara, C., 2008. The international legal personalities. Theorizing on the individual and the states in the eras of globalization. Saarbrucken: Verlag Dr. Muller. Chomsky, N., and Robert, W., 2011. Profiting Over People: Neoliberalisms & Global Orders. New York: Seven Story Press. Chanda, N., 2007. Bounds Together: How Trade, Preaching, Warriors and Adventurer Shape Globalization. Yale University Press, New Haven. . Honday, M. 1995. Innovation in East Asia. The Challenge to Japan. Aldershot, Uk: Edward elgar. Granstrand, O. 1998. “Towards a Theory of the technology-Based Firm.” Research Policy 27, no5. Glyn, A., 2006. Capitalism Unleashing: Finances, Globalization, and Welfares in Asia. Oxford: Oxford University Press. Iansiti, M, & West, J. 1997. “Technology Integration: Turning Great Research into Great”. Harvard Businss Review. Ivon Braun, J., & Eugenio, D., 2007. The Globalization of Agriculture and food.  Oxford: Oxford University Press.  Kitching, G., 2001. Social Justice transformation list in Asia. New York: Penn State Press.  Kohler, G., & Emilio, J., 2003. The role of Government in Pacific Asia: Critical perspective. New York: Nova Science Publishers.  Read More