Varieties and Alternatives of Catching-up Asian Development in the Context of the 21st Century Edited by Yukihito Sato and Hajime Sato IDE-JETRO Series The Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO) series explores the economic issues faced in developing regions globally, providing new research and analysis of these economies, with the aim of creating a more comprehensive understanding of the issues and conditions they are experiencing With a wide range of volumes covering key economic issues in developing economies, as well as examining the challenges faced as East Asia continues to integrate, the titles in this series are essential companions for academics and policymakers interested in cutting-edge research and analysis of developing economies More information about this series at http://www.springer.com/series/14861 Yukihito Sato • Hajime Sato Editors Varieties and Alternatives of Catching-up Asian Development in the Context of the 21st Century Editors Yukihito Sato Interdisciplinary Studies Center, IDE-JETRO Chiba, Japan Hajime Sato Area Studies Center, IDE-JETRO Chiba, Japan IDE-JETRO Series ISBN 978-1-137-59779-3 ISBN 978-1-137-59780-9 DOI 10.1057/978-1-137-59780-9 (eBook) Library of Congress Control Number: 2016942403 © IDE-JETRO 2016 The author(s) has/have asserted their right(s) to be identified as the author(s) of this work in accordance with the Copyright, Designs and Patents Act 1988 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Cover illustration: © szefei wong / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Macmillan Publishers Ltd London Preface and Acknowledgments Our project began with a question that was raised by Shingo Ito, who is also a contributor to this volume: ‘Has Taiwan completed catching-up yet?’ This question sounded quite simple at first, but after brief consideration proved to be broad and deep, and some fundamental questions struck us Taiwan seems to have already graduated from catching-up If so, when did it graduate? And what indicators show that Taiwan has already graduated? These questions suggested that we needed to reconsider and refine not only our understanding of Asian development based on the conventional catch-up industrialization theory but also the theory itself We asked researchers who had studied industrialization in Asian countries to join the project The countries that they researched included South Korea, China, Malaysia, Indonesia, and India Their broader picture of Asian development contributed to expanding the scope of our study The early latecomers Taiwan and South Korea attained high-speed growth through catch-up industrialization and then started to graduate from catching-up However, late latecomers such as Southeast Asian countries, China, and India have not simply followed the early latecomers but have begun to seek development paths different from catch-up industrialization, considering changing conditions under globalization Their deviation from catch-up industrialization was integrated into our study v vi Preface and Acknowledgments Starting the project, we immediately found that our questions were much more complicated than we had initially thought and that our approach to the questions varied widely Accordingly, we spent a long time discussing the problems in building and consolidating a common analytical foundation Should we argue on the level of the macro-economy, industries, and sectors, or firms? Should we focus on the reductions that have occurred in disparities between Asian latecomers and advanced countries in income, technology level, or some other factors or should we focus on the mechanisms that brought about the reductions? How should we address the relationship between catch-up industrialization and other development mechanisms, which are intimately connected? As the Introduction shows, we agreed that we should examine industry/sector-level catching-up, focus on the mechanisms, and distinguish catch-up industrialization from other mechanisms and investigate their interactions as a central research topic A more detailed explanation is provided in the Introduction Of course, we have not solved all the problems, and in fact, there are many more unsolved problems than solved ones Furthermore, solving one problem often creates new problems For instance, our study includes contrasting cases—one chapter shows an industry that successfully graduated from catching-up and another shows an industry that failed to graduate Although the respective chapters demonstrated the process and mechanism in each case, we were still unable to integrate the case studies and clarify all the factors that caused the differences between them The many remaining questions signify that the catch-up industrialization theory, which was presented by Gerschenkron more than half a century ago, is not yet exhausted and we can derive new research questions from the theory if we extend and modify it The discovery of the theory’s potential may be the most significant contribution of our study, and we wish to realize this potential in future work We also hope that our work will encourage other researchers to study Asian economic development This work is the result of our two-year project ‘Catch-Up Industrialization in the 21st Century’ from 2013 to 2015, sponsored by the Institute of Developing Economies (IDE-JETRO) We completed our research project thanks to the support, advice, and encouragement of many people Preface and Acknowledgments vii We would like to express our deep gratitude to all of them Many people in Asian countries gave interviews and offered valuable information and insightful views based on their plentiful experience Our study was also refined by suggestions from many scholars in this research field In particular, Dr Akira Suehiro, Dr Hitoshi Hirakawa, Dr Ryoshin Minami, and Dr John Humphrey shared their profound thoughts on catchup industrialization and provided useful comments Our colleagues, Ms Taeko Hoshino, Dr Momoko Kawakami, Mr Yasushi Ninomiya, and Dr Byeongwoo Kang, attended many meetings and discussed our work, which contributed greatly to deepening it The support of IDE’s editorial and administrative staff helped us to conduct our projects We also highly appreciate the assistance provided by our editors at Palgrave Macmillan Chiba, Japan 30 November 2015 Yukihito Sato Hajime Sato Contents Introduction: Varieties and Alternatives of Catching Up: Asian Development in the Context of the Twenty-First Century Yukihito Sato and Hajime Sato 1.1 Introduction 1.2 Background 1.3 Goals, Tasks, and Approach 1.4 Preceding Studies on Catch-Up Industrialization 1.5 Research Results and Concluding Remarks References Innovations Derived from Backwardness: The Case of Taiwan’s Semiconductor Industry Yukihito Sato 2.1 Introduction 2.2 Research Questions and Analytical Approach 2.3 Pure-Play Foundry Model in the Fabrication Sector: Innovation Induced by Backwardness 2.4 MediaTek’s Success in the Design Sector: Innovation Emerged from Following 1 16 24 27 27 28 32 43 ix 300 Index ASEAN See Association of Southeast Asian Nations Asian currency crisis, 224, 234 Asian economic crisis, 105, 107, 111, 117, 118 ASICs See application-specific integrated circuits ASSNI (Algemeen Syndicaat van Suikerfabrikanten in Nederlandsch-Indië), 226 Association of Southeast Asian Nations (ASEAN), 247 ASSPs See application-specific standard products AU Optronics Corp.(AUO), 60, 61, 65, 72–4, 76, 77 automation, 163 automobile maker, 138, 139, 141, 144 automobile sheet, 138 Automotive Steel Application Center, 143 B backward linkage, 21, 92, 96, 117, 118 backward linkage effects, 5, 18, 90, 155, 158, 170, 171, 174, 176, 177 balanced-growth strategy, 10 Bangalore, 281, 282 Banking Basic Law, Indonesia, 228 Baosteel, 166, 175, 176 Bappenas, 228, 239 Barry Callebaut, 240 Basic Law on Forestry, Indonesia, 230 basic oxygen furnace (BOF), 131, 132, 134, 160, 161, 163, 168 Bhabha Report, 286 Bhushan Steel, 175 Blu-ray discs, 184, 186 body-shopping, 288, 291, 292 BOF See basic oxygen furnace bottom-up industrialization, 190 breadth of R&D, 56, 57, 64, 67, 70, 73–5, 80–2 British Airways call centre, 282 Bursa Malaysia, 266 C call centres, 278, 280 Canadian Code, 138 Capability Maturity Model Integration (CMMI) Level certification, 282 Cap Gemini, 283, 284 capital-intensive industry, 80, 83, 209, 214, 221, 222, 234, 240 capital-intensive technology, 189, 193 capitalist camp, 228 capitalist economies, 277 carbon dioxide emissions, 145 catch-down innovation, 19, 22, 159, 184–6, 195, 196, 206–8 conditions for, 206–8 new concepts in developing countries, 194–6 technological progress, 184–6 catching-up approach, 30, 48, 49 catching-up countries, 128, 147 catch-up industrialization, 1–6, 8, 9, 11–16, 19, 22–4, 153, 154, Index 176, 178, 211, 213–15, 219, 221, 241 beyond state-market dichotomy, 12–15 markets and government, role of, 8–12 CC See continuous casting CD See compact disk Central Bank Law, Indonesia, 228, 239 central processing unit (CPU), 35, 48 CGL See continuous galvanizing line chaebol, 99, 103, 105, 106, 118, 141 Cheil Industries, 93, 107 Chiang, S-Y, 39 Chiba Works, of Kawasaki Steel, 130, 131 Chi Mei EL, 72, 73, 76 Chimei Innolux Corp., 60, 73 Chi Mei Optoelectronics Corp (CMO), 60, 65, 72, 73 China Steel (CSC), 166, 175, 176 Chunghwa Picture Tubes, 60 circulation investment, 106 CMO See Chi Mei Optelectronics Corp cold rolling, 168, 176 Cold War, commissioned production, 82 commodity boom, 234–6, 239, 242 compact disc (CD), 45, 48, 184, 186 complete knocked-down (CKD) kits, 290 component-localization program, 229 301 Congress party, India, 286 continuous casting (CC), 131, 132, 160 continuous galvanizing line (CGL), 140, 142 Coolsand, 201 COREX, 145 CPO See crude palm oil CPU See central processing unit crude palm oil (CPO), 20, 221, 235, 236, 240, 252–4, 257–9, 264, 267, 268 crude steel production, 125, 126, 163 D Decree on the Renewal of the Basic Policy on Economy, Finance, and Development, Indonesia, 228 deindustrialization, 216, 219, 220, 234, 237, 238 Department of Atomic Energy (DAE), 289 Department of Electronics, India, 287 Department of Energy (DoE), 287, 288, 290 Desai, Moraj, 289 design service, 41, 42 De Smet, 268 developed country, 1, 6, 7, 19, 56, 61, 90, 183–9, 193–5, 197–9, 201, 202, 207, 212, 268 developing country, 1, 17, 19, 20, 73, 92, 128, 132, 133, 157–9, 177, 183–90, 192–6, 202, 302 Index 207, 208, 219, 241, 249, 263, 269, 273, 277, 280, 294 resource/natural resource-rich developing country, 212, 222, 241, 242 developmental state, 249 developmental state approach, 11, 12, 29, 166 developmental statists, 154, 165 digital video disc (DVD), 45, 184, 197, 205 DIOS See direct iron ore smelting direct iron ore smelting (DIOS), 145, 146 direct reduced iron (DRI), 160 direct reduction (DR) furnaces, 160, 161, 169, 175 disadvantage of backwardness, 10, 19, 156, 158, 159, 167, 174, 177, 178, 214 Display Taiwan, 74 DoE See Department of Energy domestic demand, 23, 103, 134, 167, 169, 190, 218, 295 domestic demand-oriented producers, 103 Domestic Investment Law, Indonesia, 228 domestic market, 4, 10, 19, 44, 90, 106, 109, 192, 200, 207, 218, 233, 264, 291, 294 domestic procurement ratio, 104 Dongbu Electronics, 104 Dongwoo Fine-Chem, 109 DRAM See dynamic random access memory DR furnace See direct reduction furnace dual economy, 10 dual-layer GA sheet, 139 dual-phase (DP) steel, 138 Dula sheet, 140 Dutch disease, 213, 215, 216, 219, 220, 241 DVD See digital video disk dynamic comparative advantage, 154, 166 dynamic random access memory (DRAM), 34, 35, 49, 198 E EAFs See electric arc furnaces early development economists, 9, 11 Eastman Kodak, 72–5 ECIL See Electronics Company of India Limited economic disparity, 103, 104, 118, 255 economic liberalization, 4, 168, 212 eighth-generation (G8) manufacturing lines, 105 electric arc furnaces (EAFs), 160–4, 169, 175 electric bicycles, 202–4, 208 electric vehicles (EVs), 185 electronic design automation (EDA), 42 ELDis, Inc., 74 electronic manufacturing services (EMS), 200 Electronics Company of India Limited (ECIL), 287, 289 Index electron transport layer (ETL), 96, 108 EO policy See export-oriented policy ETL See electron transport layer export industrialization, 214, 218, 231, 233 export-oriented (EO) policy, 11, 154, 165, 167 export-oriented producers, 103 export substitution, 215, 218, 225, 230, 231, 233, 240 F fabless company, 33, 35, 38–41, 43–6, 48 fab-lite company, 35, 39, 40 Faraday Technology Corporation, 42 FDI See foreign direct investment Federal Land Consolidation and Rehabilitation Authority (FELCRA), 265 Federal Land Development Authority (FELDA), 255–8, 260, 265, 266, 273 FELDA See Federal Land Development Authority Felda Global Ventures, 274 FINEX, 145, 146 firm-level approach, First Industrial Master Plan (IMP1), Malaysia, 260 flash memory, 39, 184, 185 Flemish weavers, flying-geese pattern, 211, 214, 221 follower strategy, 29, 44, 56, 60, 62, 63 303 foreign direct investment (FDI), 18, 174, 221, 228, 229, 232, 248, 281 Foreign Investment Law, Indonesia, 228 foreign skilled labor, 158 forward linkage, 21 forward linkage effect, 157, 170, 171 FPG Oleochemical, 260 Freescale Semiconductor, 40 Free Trade Agreements (FTAs), 212, 239 free trade policies, 11 frugal innovation, 195, 196 FTA See Free Trade Agreements fuel cell electric vehicles (FCEVs), 185 Fuji Steel, 133 Fujitsu Microelectronics, 40 fund-raising capability, 141 G Galaxy S, 76 galvanized steel sheet, 138, 140, 141, 144 Gandhi, Indira, 286, 287, 289 Gandhi, Rajiv, 292 Gara spinning machine, 190, 191, 193 General Electric (GE), 194 General Packet Radio Service (GPRS), 45 General System for Mobile Communications (GSM), 45 Gerschenkron, A., 3, 6, 10, 30, 73, 128, 153–60, 163–5, 167–9, 304 Index 174, 175, 177, 178, 187, 197, 214, 249 Gerschenkronian big-spurt catch-up strategy, 154, 168 GJ Steel, 175 global in-house centres (GICs), 282 globalization, 4, 19, 22, 24, 176, 178, 223 global production networks, 91 Global Services Index (GSI), 282 Global Unichip Corporation (GUC), 42 global value chain, 91, 243 global value chain approach, 29 global warming, 145 Golden Hope, 261 Goodyear, 228 government-affiliated research institute, 67, 74, 82, 83 government censorship, 204 Great Depression, 224, 227, 255 Guangdong Creative Power Entertaining Corporation, 205 Guerrilla mobile handsets, 199, 201, 207, 208 Gwangyang Works, of POSCO 134–6, 142, 143, 146 H handheld electrocardiogram device, 194 HannStar Display Corp., 60 high-grade flat steel products, 162, 174 high-quality steel sheets, 18, 126, 127, 143, 147 high-tech industries, 3, 89, 90 high-tensile steel, 138, 144 HIL See hole injection layer Hindustan Steel Limited (HSL), 166 Hirohata Works, of Nippon Steel, 130 Hirschman, A.O., 10, 23, 153–5, 157–60, 163–5, 169–71, 174, 175, 177, 178 Hirschmanian gradual IS catch-up strategy, 154 hole injection layer (HIL), 96, 108 horizontal keiretsu system, 129 hot charged rolling (HCR), 135 hot-dip galvanized steel sheet (GI), 138 hot-strip mills (HSMs), 134, 135, 140, 161–3, 175 HP Enterprises, 284 HSM See hot-strip mill hybrid electric vehicles (HEVs), 185 hydroforming facility, 143 Hynix Semiconductor, 104 Hyundai Hysco, 140–2 Hyundai Motor Group, 18, 140–4, 147, 148 Hyundai Steel, 140, 141, 175 I IBM, 282–4, 287, 293 IBM Research, 72 IDTech, 72 Idemitsu Kosan, 75, 76 IDM See integrated device manufacturer ILO See International Labor Office import substitution industrialization (ISI), import-substitution (IS) policy, 11, 154, 165, 167, 169, 230 Index income gap, 1, 2, 6, 7, 248 Indian-made computers, 290 Indian programmer, 288 Indian software services industry compound annual growth rate, 280 development of, 284–93 domestic service provision, 289–91 export boom, state-supported, 291–3 export-oriented software service industry, 280, 288 export revenues, 277, 280 firms in, 281–4 foreign competitors, 282–4 leading software service firms, 285 orgins of, 285–8 players in, 281 revenue-size and contribution, 283 software writing, 278, 279 technical and commercial capabilities, 284 types of software service, 279 indium tin oxide (ITO), 105 Indonesia, back-and-forth industrial development under developmental regime, 227–34 impact of natural resource booms, 234–40 manufactured exports, rise and fall, 232 manufacturing shares of GDP, 238 regional Free Trade Agreements, 239 305 resource-abundant country, 222 sugar, first manufacturing industry, 225–7 top export items 226, 233, 237 tradable natural resource sector, 216, 219, 220 tradable nonnatural resource sector, 216, 219, 220 waves of industrialization, 223–34 inducement mechanism, 19, 159, 164, 165, 169, 170, 175, 177, 178 industrial development for natural resource-rich countries agro-industrializing economies, 213–15 conceptual model, 217–22 factors and mechanism, 218–20 stages of, 218 Industrial Development Reports, 193 Industrial Technology Research Institute (ITRI), 28, 32, 34, 67, 72–4 industry-level approach, infant industry protection, 286, 289 Infineon Technologies, 39 Information Communications Technology (ICT), 278 information technology (IT) hardware, 29 industry, 22, 79 outsourcing, 279, 280 sector, 278 service, 279, 280 Infosys, 279, 282, 284, 293, 294 Innolux Corp., 60, 65, 73, 76 inputs-driven, 154 306 Index integrated device manufacturers (IDMs), 29, 33, 35, 36, 38–42 integrated firms, 161, 162, 167, 168, 174, 176 Intel, 35, 36, 44, 47, 48 intellectual property (IP), 41–3 Inter-Governmental Group, 228 intermediate technology, 19, 159, 185, 186, 188, 189 in China, 199, 203, 206 in developing countries, 192, 193 in Japan’s industrialization, 190, 191 international capital flows, International Finance Corporation, 293 International Labor Office (ILO), 188, 206, 207 International Monetary Fund, 228 International Packet Switching Service (IPSS), 292 International Rubber Regulation Agreement, 255 Investment Incentives Acts, Malaysia, 264 IOI Corporation, 262, 266, 267 IP See intellectual property IS policy See import-substitution policy IT See information technology IT-enabled services (ITES), 279, 280 ITRI See Industrial Technology Research Institute J Janata Dal party, 289 Janata government, 289, 290 Japan Desk project, 111 Japanese Iron and Steel Federation Standard, 139 Japan Export–Import Bank, 133 Joyoung Group, 195 JSR Micro Korea, 109 JSW Steel, 175 K Kawasaki Steel, 130, 131, 141 Kimitsu Works, of Nippon Steel, 133, 134 Kim, Linsu, 14, 49, 90, 91, 128, 193 King Edward III, knowledge-intensive industries, 212, 214, 222, 241, 242 Korea Core Industrial Technology Investment Association (KITIA), 111 Korean industrial development and linkage formation development pattern and strategies, 90–2 enchancement of technological capability, 106–9 expansion of opportunities, 101–6 FPD components, materials, and equipment industries, 92–9 impact of localization by Japanese suppliers, 115–17 increase in FDI by Japanese suppliers, 109–11 inward direct investment inducement mechanism, 112–15 Korean supplier, entry of, 99–101 LCD suppliers, 92–5 Index OLED-related components, materials, and equipment, 96–9 Korean steel industry first wave of innovation, 130–7 implementation of new process technologies, 131–3 institutions and industrial organization, 128–9 integrated steelworks construction, 130, 131 phases of innovation, 127, 128 second wave of innovation, 137–44 third wave of innovation, 144–6 three country paradigm, 129 Krakatau Steel, 168, 169, 174 Kuala Lumpur Commodity Exchange, 265 Kumpulan Guthrie, 261 L labor-intensive conventional technology, 189 labor-intensive export industry, 240 labour-intensive industry, 214, 221, 234 labor-intensive technology, 189 labor-saving technology, 187, 188, 266 Lam Soon, 258 laserdiscs, 184 latecomer country, 1, 4–6, 9, 10, 13, 18, 24, 55, 56, 91, 92, 118, 119, 147, 155, 174, 175, 187, 193, 214, 215, 249 latecomer firm, 14, 163, 184, 186 307 late latecomer, 4, 24, 157, 158 LCD televisions/TV, 60, 61, 81, 101, 102 legitimization for innovation, 57, 78, 79, 82 Leontief inverse matrix, 172 less-developed country, 154, 194, 200 LG Chem, 93, 100, 107, 108 LG Electronics, 61, 71, 104 LG Philips LCD, 93, 104, 112 Lin, Sam, 43 localization ratio, 92, 93, 96 Loders Croklaan, 262 low-carbon steel, 137 Low-Cost Green Car program, 240 low-cost technology, 188 low-end market, 22, 47, 48, 194 low-end segment, 31 low-grade iron ore and coal, 145, 146 low-income agricultural economies, low-income population, 187, 194, 195, 200, 206 low-priced manufactured products/ goods, 212, 239 low-temperature polysilicon (LTPS), 72 L Processing, 139 LTPS See low-temperature polysilicon Lurgi, 268 M macroeconomic stability, 13 macro-level analysis, 308 Index Malayawata Steel, 168, 169, 175, 192, 193 Malaysian Palm Oil Board (MPOB), 265, 268 Malaysian palm oil industry annual average prices, 271 expansion of, 257, 258 export structure, 252, 253 global economic conditions, 269–73 high value-added, 259–61 industrial development policies, 264–6 land area of palm oil plantation by ownership, 256 major production of edible oils, 270, 272 per capita gross domestic product (GDP), 247 rationalization and restructuring, 258, 259 restructuring and integration, 261–3 significance of, 250–4 technological requirements for, 266–9 value chain, 250, 260, 261, 266, 269 world market share, 251, 252 manga (cartoon), 204 Manila, 281 manufactured goods, 5, 9, 24, 214, 230, 233, 236, 239 marketability of innovations, 79, 80 marketable technology, 78 market and state dichotomy, 166 market-friendly approach, 12 mechatronic smart machines, 90 MediaTek /MTK, 17, 28–30, 32, 43–9, 201, 208 Megasteel, 175 Meiji Restoration, 190 Microsoft, 279 middle-income industrialized economies, Mighty Atom, 204, 206 Minicomputer Policy, India, 290, 293, 295 Ministry of Commerce, Industry and Energy (MOCIE), Korea, 101, 104, 111 Ministry of Defence (MoD), India, 289 Ministry of Economic Affairs, Taiwan, 67, 83 Mitsubishi Heavy Industries, 135 MNCs See multinational corporations MOICE See Ministry of Commerce, Industry and Energy motorcycles, 194, 202, 203 MPOB See Malaysian Palm Oil Board M-Star, 201 MTK See MediaTek Multihole Lance Nozzle, 132 multinational corporations (MNCs), 6, 194, 195, 282 mutualistic (sang-seng) cooperation between large and small companies, 103, 104, 106 N Nagoya Works, of Nippon Steel, 146 NAIC See newly agro-industrializing country Nano, 194, 195, 207 Index national innovation system, 83 national innovation system approach, 13, 15 nation-state level, 13, 156, 157, 160, 164, 167, 168 natural resource–based products, 212, 215, 218 NCK, 109 neoclassical economists, 11 neoclassical growth theory, 153 neo-Schumpeterians, 153 New Economic Policy (NEP), Malaysia, 255 newly agro-industrializing country (NAIC), 215, 241 Next Generation Growth Engine Program, 101 Nippon Steel Corporation (NSC), 126, 133, 139, 146 Nippon Steel & Sumitomo Metal, 146 Nissan Motors, 139, 144 Nokia, 282 non-light-emitting LCD panels, 70 non-resource-based industrialization, 20, 212 nontradable sector, 216, 219 Nordic Code, 138 NSC See Nippon Steel Corporation NVIDIA, 40 NXP Semiconductors, 39 O ODM See original design manufacturing OEM See original equipment manufacturing official development aid (ODA), 228 309 OHF See open-hearth furnace oil boom, 230–7, 239, 242 oil revenue, 231, 235, 242 OIP See Open Innovation Platform Oita Works, of Nippon Steel, 146 online roll grinder (ORG), 135 on-the-job training, 141 OPEC See Organization of the Petroleum Exporting Countries open-hearth furnace (OHF), 130, 131, 160, 161 Open Innovation Platform (OIP), 42, 43 optical discs, 184, 185, 199 Organization of the Petroleum Exporting Countries (OPEC), 231, 234 original brand manufacturing (OBM), 14 original design manufacturing (ODM), 14, 29, 43, 44, 46 original equipment manufacturing (OEM), 14, 29, 43, 44, 46 ornamental crop, 254 overtaker strategy, 56, 57, 63 Oxygen Converter Gas Recovery System, 132 P pair cross mill (PCM), 135 palm kernel oil, 269 Palm Oil Registration and Licensing Authority (PORLA), 265 Palm Oil Research Institute of Malaysia (PORIM), 265 Panasonic, 40 Pan Century, 262 310 Index Paris Club, 228 Parts and Materials Technology Development Program, Korea, 101 passive-matrix organic light-emitting diode (PMOLED), 71 patent, 14, 57, 64, 65, 67, 71, 75, 100, 183 path dependency, 56 pembangunan, 227–9, 239 personal computer (PC), 29, 43, 44, 46, 47, 62, 64, 211 Pertamina, 237 Perwaja, 169 Philippine software services industry, 280 Philips, 33, 40, 75 Pioneer Industry Ordinance, 264 pixel electrode technology, 67 Plaza Accord, 231 Pleasant Goat and Big Wolf, 205, 206 PNB (Permodalan Nasional Berhad), 261 Pohang Steel (POSCO), 18, 126, 129, 133–7, 142–8, 166–8, 174–6 Pohang Works, of POSCO, 133, 134, 136, 146 POSCO See Pohang Steel (POSCO) poverty-stricken farmers, 255 PPO See processed palm oil Prebisch–Singer thesis, processed palm oil (PPO), 252–4, 257–61, 263, 264, 267, 268 Process Innovation, 143 product cycle, 194 productivity-driven, 154 product-out strategy, 79 public debt problem, 228 pure-play foundry model, 16, 17, 28, 29, 32–6, 38, 41 Q Qualcomm, 45–9 Qunshan project, 39 R random access, 197 rapeseed oil, 267, 269, 271 Rashtriya Ispat Nigam Limited (RINL), 166 R&D See research and development R&D center, 109, 112–14, 116 R&D options, 56 Realtek Semiconductor, 44 remote delivery, 291–5 redundancy in R&D organizations, 82 Renesas Electronics, 40 research and development (R&D), 17, 37–9, 43, 101, 103, 116, 117, 137, 143, 147, 259, 265, 268, 273 resource-based industrialization, 20 reverse innovation, 194–6 Reynoso stelsel, 226 Roh, Moo-Hyun, 103 rolling firms, 161, 163 rush work culture, 44 S Samsung Electronics, 35, 61, 65, 67, 71, 75–8, 91, 93, 96, 101, 102, 104–7, 111–14, 116 Samsung Group, 77 Index Samsung SDI, 74–6, 104 Sanyo Electric, 72, 74 SCOPE21, 146 sector-level analysis, SEMES, 93, 107 Semiconductor Energy Laboratory, 74 semiconductor recession, 100 semi-integrated (EAF) firms, 161 servo press, 139 SGS crystallization See super grain silicon crystallization shanzhai cellular phones/handsets, 29, 45, 199 shared growth policy, 103 shareholder lawsuits, 106 Sharp, 61, 63, 74, 112 short-term profit maximization, 290 SID See Society for Information Display Sime Darby, 258, 261 simple knocked-down (SKD) kits, 290 single-layer GA sheet, 139 single-rate transactions, 228 Sino-Indian war, 286 sintering furnace, 145 SK Display, 74 skilled foreign people, Small and Medium-sized Subcontractor Council, Korea, 106 small power loom, 191, 193 small-and/to-medium sized enterprises (SMEs), 100, 103–5, 115, 200–2 smart phones, 45 SMEs See small-and/ to-mediumsized enterprises 311 social capability, 7, 12, 31, 56, 73, 156, 214, 215 social capability approach, 13, 15 Society for Information Display (SID), 72, 74 Soeharto, 227, 229, 230, 234, 237, 239 Software Engineering Institute, at Carnegie Mellon University, 282 Software Export Scheme, India, 288, 291, 295 software package, 278, 279, 281 software piracy, 281 sole-agent system, 229 Sony, 40, 74–6 Southern Edible Oil, 258 soybean oil, 267, 269, 271 soy milk maker, 195 spooling machines, 191 Spreadtrum, 201 State-Owned Enterprise (SOE) Law, Indonesia, 228 static comparative advantage, 154 Steel Authority of India (SAIL), 166 steel-consuming industries, 169, 170, 178 steel industry in Asia advantages of backwardness, 155, 156, 165–9 appropriate technology, 159 Asia International Input–Output (AIO) table, 171 binary–opposition pairings, 154 domestic steel demand, 170 foreign direct investment, 174 Gerschenkron’s framework, 154–9, 164, 167, 178 global political economy, 174–7 312 Index steel industry in Asia (cont.) Hirschman’s framework, 153–5, 157–9, 164 index of sensitivity dispersion, 171–3 initial investment level and scale of production, 162, 163 intermediate technology, 159 late industralization, 155–9 linkage effects, 169–74 quantitative analysis types, 171 sectoral studies, 166–8 steel production process, 160 steel products, 161, 162 types of companies, 161 world crude steel production, 163 ST Microelectronics, 39 subscriber identity module (SIM) cards, 200 Suehiro, A., 13, 49, 56, 90, 154, 177, 211, 213–15 Sumitomo Metals, 132 super grain silicon (SGS) crystallization, 105, 108 surface corrosion, 138 Swiss surveyor company, 232 System-on-Chip (SoC), 41 T Tailer Welded Blanking facility, 143 Taiwan flat panel display industry acquisition of technology, 63 AMOLED development, 76, 77 business conditions, 77, 78 global share, 57–60 innovativeness and marketability, 78–80 LCD panels, patents related, 65–7 legitimization for innovation, 78–80 OLED panels, patents related, 67–71 OLED-related patent acquisitions in USA, 70 pending issues, 81–3 R&D management, characteristics of, 63–71 R&D spending-to-sales ratio, 65 rise of AMOLED development, 71, 72 role of government, 82, 83 spread of LCD TVs, 60–2 suspension and stagnation of R&D, 73, 74 technology integration and Breadth of R&D, 63, 64 ultra-compressed catch-up model of industrialization, 57–63 Taiwan Semiconductor Manufacturing Company Limited (TSMC), 28, 29, 32, 33, 35, 36, 38–43, 49, 82 Taiwan’s semiconductor industry active in-house research and development, 37 design sector, 43, 44 dynamic random access memory (DRAM), 34 equipment suppliers’ roles, 38 level of mass-production technology, 36, 37 line width, 34, 36, 39, 40, 42 wafer caliber, 36, 37 Tata Consultancy Services (TCS), 282, 284, 288, 293, 294 Index Tata Motors, 194, 207 Tata Steel, 175, 176 TCS See Tata Consultancy Service technological capability, 13, 14, 18, 56, 63, 100, 102, 105–7, 117, 118, 158 technological catch/catching-up, 21, 23, 36, 37, 49, 50, 62, 126, 128, 136, 147, 153, 157, 159, 162, 184, 185 technological progress, 5, 10, 15, 19, 22, 23, 30, 62, 79, 128, 172, 174, 181–4, 187, 188, 191 technology-centered approach, 13 technology integration, 56, 63, 64, 80 TDK, 71 Texas Instruments, 40 TFT panels See transistor liquid crystal display panels Tohoku Pioneer Corporation, 71 Tomioka Silk Mill, 191 top-down industrialization, 190 Toppoly Optoelectronics Corp., 76 TORAY Advanced Materials Korea, 109 torque sensor, 202, 203 Toshiba, 39, 40, 75, 76 Toyota Motors, 139, 140 traditional handlooms, 191 transformation-induced plasticity (TRIP) steel, 138 transistor liquid crystal display (TFT-LCD) panels, 62, 73, 74 transnational fragmented value chains, Tsai, M.-K., 32, 44–6, 48 Tsao, R., 35 313 TSMC See Taiwan Semiconductor Manufacturing Company Limited Tsurumi Works, of Japan Steel Pipe, 130 twinning-induced plasticity, 144 TWIP steel, 144 U ULVAC Korea, 93, 109 UMC See United Microelectronics Corporation underdeveloped/under-developed countries, 9, 10, 157, 158 UNIDO See United Nations Industrial Development Organization Unilever, 228, 240, 262, 269 United Microelectronics Corporation (UMC), 28, 35, 36, 42, 44, 48 United Nations Industrial Development Organization (UNIDO), 188, 193 Universiti Pertanian Malaysia, 265 upgrading of economic structure, 248 of export structure, 254, 264 in Malaysia’s palm oil industry, 265 of natural resource-based and nonresource-based industries, 213 qualitative, 220 of semiconductor industry, 35 technological, 22, 36 US automobile makers, 138 314 Index V value migration, 279 Vanguard International Semiconductor Corporation, 37 Veblen, T., 8, 187 very-large-scale integration (VLSI) project, 34 Viatron, 96, 105, 108 Victor Company of Japan (JVC), 197 video CDs, 19, 197–9 video tape recorders (VTRs), 197–9 VTRs See video tape recorders W warranty term, 138 Washington Consensus, 11, 12, 165 Weltrend Semiconductor, 41, 43 Western industrialization, 90 Wideband Code Division Multiple Access (WCDMA), 45, 48 Windows Mobile, 45 Wipro, 282, 284, 293, 294 World Bank, 12, 170, 228, 293 World Steel Dynamics, 126 World War II, 9, 18, 89, 125, 129, 137, 146, 164, 247, 254 Y Yamaha, 202 Yawata Steel Corporation, 129, 133, 136, 192 Yawata Works, of Nippon Steel Corporation, 130, 131 ... exporting countries in 2012 284 285 Introduction: Varieties and Alternatives of Catching Up: Asian Development in the Context of the Twenty-First Century Yukihito Sato and Hajime Sato 1.1 Introduction... in the new century In this context, this volume reconsiders our understanding of the development of latecomers in Asia based on the catch -up industrialization theory by taking these changes into... consideration and, in so doing, aims to reassess and elaborate on the theory This introductory chapter consists of the following four sections The next section examines the changes in the development of Asian