Tuesday, June 12, 2007

Globalist, Statist, and Network Paradigms in East Asia

Globalist, Statist, and Network Paradigms in East Asia

This chapter, as it is a form of summary in itself, is difficult to summarize. Essentially, it examines the positions of the various authors of the text, and seeks to find the commonalities in their arguments.

Its main sections are globalism and statism, which in turn are divided into subglobal regions and semiperipheral zone, and global influences and state institutions, respectively.

In the globalism section, globalism itself is defined, and the theoretical approaches of radicalism, conservatism, and liberalism are lined up in order of degree of globalism, with radicalism being the most global and liberalism being the least. Then the differences in the arguments of the various authors are pointed out, and they are distributed as most (Cumings) to least (Simon) globalist. Winckler then goes on to point out that the similarities between the arguments are really less than the similarities, and to introduce two areas in which a synthesis of liberal, radical, and conservative approaches to globalism shows promise: subglobal regions and semiperipheral zone.

The subsection on subglobal regions reviews the elements of the three-zone model (core, semiperiphery, periphery) and the processes (geopolitical, political-economic, sociocultural) and how they can be applied to identify the differences between subglobal regions. Because each such region represents a multiplicity of “cases,” each with a different set of historical circumstances, a more flexible approach is emerging, stressing historical-structural elements and the notion of conjuncture. Winckler, however, warns against reducing analysis of subglobal regions to “mere historical narrative.”

The subsection on semiperipheral zone discusses the arguments for and against the existence of such a zone, its function, and the usefulness of it in analysis.

The section on statism begins with a definition of statism and how it focuses on the national level to explain socioeconomic development, and it places liberalism (least statist) and conservatism (most statist) at opposite ends of the spectrum of theoretical approaches. This is followed by a review of the different authors’ emphasis in terms of statism. Winckler then looks at how their approaches differ and are similar, again finding a synthesis of approaches.

Winckler then points out two areas in which radical-statist literature is weak: global influences, in which the statist approach fails to explain the connection between supranational and national, and state institutions, in which the statist approach fails to “posit an explicit conception of state institutions and to asses the mutual impact of these institutions on each other’s development.” He ends this section with an interesting discussion of alternative social mechanisms and social networks.

Globalization and the Future

This chapter begins with a brief summary of Taiwan’s economic history, and then goes on to explain the dilemma that it faces for the future. Basically, the conditions that Taiwan relied on for its own development (low-wage labor, positioning itself strategically in the world economy, and the leveraging of technological innovation) have now shifted to other, less-developed countries like China.

Next it examines new product and market strategies, particularly competing on price versus competing on innovation, differentiation, and brand. Then it examines location strategies, or whether it is best for firms to stay in Taiwan, or move production elsewhere.

Low-cost manufacturing has been Taiwan’s greatest strength, but faced with increased competition and a rising standard of living, there is not much further firms can go in keeping costs down. As the text says, “the most serious problem of relying on a strategy of lowering costs is that this is a game that many other can, and do, play.” In order to continue to achieve profits, Taiwanese firms need to develop other strategies to remain competitive and profitable.

Another problem Taiwanese firms face is a dependence on a small number of customers. Because of this, these firms need to develop “unique or difficult-to-replace products and services” in order to “raise the entry bars for would-be rivals.” Branding is one way to do this, but it has proven difficult and risky. OEM firms stand the chance of alienating their customers when they enter into competition with them. Other strategies are to continually innovate on new and current products.

Another important strategy involves location. The chapter discusses the pros and cons of firms keeping some or part of their operations in Taiwan (R and D, for example), while moving other parts (like production) overseas either to China or other places (Mexico is one example, that has the advantage of being geographically close to American markets).

The chapter closes by positing that, in order for Taiwan to remain competitive and relevant in the global marketplace, it will be important for public policy to continue to support research (ITRI) and other institutions like higher education that support and contribute to new technologies and innovation.

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