globalization: a view from the bottom up the ipc ...web.mit.edu/sis07/www/berger_slides.pdf ·...
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Annual Industry Studies ConferenceApril 26-7, 2007
Globalization: A View from the Bottom Up
The IPC Globalization Study
Suzanne BergerRaphael Dorman-Helen Starbuck Professor of Political Science
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Senior ResearchersAkintunde I. Akinwande, EECSSuzanne Berger, Political ScienceRichard K. Lester, Director, IPC | Nuclear EngineeringCharles Sodini, EECSEdward S. Steinfeld, Political ScienceTimothy J. Sturgeon, IPC
Graduate ResearchersMarcos Ancelovici (2007: McGill)Dan Breznitz (2007: Georgia Tech)Edward CunninghamDouglas Fuller (2007: American University)Sara Jane McCaffreyTeresa LynchEric Thun (2007: Oxford)
Research Team
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The Fear
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Employment data in 1,000s of personsSource: Lexis Nexis and U.S. Bureau of Labor Statistics
Outsourcing News Storiesand Employment
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Research Goal
Note: ‘Globalization’ refers to the set of changes in the international economic
arena and in the domestic economies of nations that tend towards the creation
of a single world market for wages, capital, goods, and services.
To analyze the impact of globalization on theprospects for innovation, economic growth, socialwellbeing and political stability in differentsocieties.
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The Two Questions
1. Reorganization?+ What to keep within the four walls
of the company?
+ What to outsource?
2. Relocation?+ What to keep at home?
+ What to offshore?
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a.ConvergenceCompetition and modularization (the“lego model”) drive one best strategy
b.Varieties of Capitalism drivevarieties of globalization
c.The Legacy Model
Competing Hypotheses
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Companies Interviewed by Sector
Textile, Retail, Apparel 188
Electronics 187
Automotive 59
Other/industry 50
Publishing 22
506
Note: 38 additional organizations were interviewed. This includes
government officials, trade associations, and academics.
Interview Data
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Country of Company Ownership
USA 70
Germany 56
Italy 42
France 33
United Kingdom 31
Other-Europe 26
Romania 2
Israel 24
Japan 32
China 34
Taiwan 134
Other-Asia 18
Canada 4
506 Other Europe: Ireland, Monaco, Netherlands, Sweden,
Scotland Other Asia: Indonesia, Philippines, Malaysia,
Thailand, Singapore, India, South Korea
Interview Data
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Processes of ChangeDriversa. New markets
b. Market volatility
c. Liberalization of trade, finance and investment
Enablersa. New technologies (codifiable specifications; industry
standards)
b. New spaces for production
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Legos or Models?
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From Ideas to Customers
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Resilience of Diversity• Many models of Success: No Silver Bullet+ Dell vs. Sony+ Zara vs. Gap
• No Sunset Sectors Why do high wage Italians still make eyeglasses?
Some of the Findings
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Build on Legacies at Home• How to Live with China
+ Japanese Firms+ US Firms
Some of the Findings
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Some of the FindingsChinese Bilateral Trade with the EU and Japan
Source: Ministry of Commerce,People’s Republic of China
From: Branstetter and Lardy,National Bureau of EconomicResearch Working Paper 12373
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Some of the FindingsU.S.-China Bilateral Trade Imbalance
Source: Ministry of Commerce, People’sRepublic of China
From: Branstetter and Lardy, NationalBureau of Economic ResearchWorking Paper 12373
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Build on Legacies at Home
• How to Sustain Innovation in a FragmentedSystem
Some of the Findings
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Some implications for educationOur graduates will work in a world in whichfragmentation of production and the fragmentation ofresearch,design, development and distribution requirethem to know how to:
• Locate and access knowledge and production capabilities round the world;
• Coordinate activities and cooperate with partners across the borders of their own lab or company and across the borders of their own home country;
• Understand markets and organizations in large new emerging societies like India and China