« « Plan versus Market Explanations in Computer Industry (4)

Plan versus Market Explanations in Computer Industry (5)

Our approach explains differences in industrial performance between companies and countries primarily in terms of:

The Structure of the Global Computer Production System. Both the structure and the evolution of that system are important. This includes competition, alliances, and market transactions among companies at different levels of the production chain, from silicon to systems to software. It also includes the geographical structure of the global production network, that is, who makes what, and where.

Government Industrial Policies. These are the policies that influence the development of national computer industries. In an industry whose geographical structure is largely determined by the business decisions of a few MNCs, but also affected by the choices of thousands of small companies, government policy can be an important factor influencing those decisions.

These policies include tariffs and other trade barriers, incentives to attract foreign investment or encourage local investment in computer production, export promotion, training of computer professionals, investment in infrastructure and R&D, and promotion can actually be counterproductive later on because of changes in the natureof the competitive environment.

National Computer Industry Structures. Each country has its own industry structure, marked by several features. Some countries’ industries are dominated by foreign multinationals, while others consist mostly of domestic companies. In some countries, a few large, diversified firms lead the industry, and smaller companies are generally part of the supply chain of one of these firms.

In others, entrepreneurial smaller companies compete with each other and have only loose ties to each other and to larger firms. A given industry structure may be advantageous for competing in one product area, yet be detrimental in other markets.

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