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Cotract Manufacturing

In: Business and Management

Submitted By yayami
Words 10486
Pages 42
Electronics Contract Manufacturing: Global Production and the International Division of Labor in the Age of the Internet

Boy Lüthje

Institute of Social Research Johann Wolfgang Goethe-Universität Senckenberganlage 26 60325 Frankfurt Germany E-mail:

Submitted for publication to Industry and Innovation – special issue on “Global Production Networks, Information Technology and Local Capabilities”, coordinated by Linsu Kim and Dieter Ernst Comments welcome, please do not quote December 2001


The role of information technology for production networks in developing countries cannot be assessed without an analysis of the profound changes in the productive structure of global capitalism. In contrast to the general perception of the “informational economy” (Carnoy e.a. 1993, Castells 1996) as service- or science-based, it has to be stressed that in the "new economy" manufacturing continues to matter (Cohen/Zysman 1987). In the electronics industry, a new model of outsourced manufacturing has emerged as a centerpiece of globalized production networks: Contract Manufacturing (CM) or Electronics Manufacturing Services (EMS). This form of network-based mass production closely linked to the emergence of the “Wintelist” (Borrus/Zysman 1997 model of competition and the rise of “fabless” product design companies in key sectors of the information technology (IT) industry. Our analysis of electronics contract manufacturing explores three interrelated sets of questions: • • the patterns of vertical specialization and globalization in the IT-industry, as related to new industry structures and changing architecture of IT-networks; the shift from traditional multinational corporations to global network flagships (Ernst 2001) that develop transnational and regional production networks with hierarchical layers of participants; the possible impact...

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