Title: Beyond the 'Global Factory' model: innovative capabilities for upgrading China's IT industry

Authors: Dieter Ernst

Addresses: East-West Center, 1601 East-West Road, Honolulu, HI 96848, USA

Abstract: China is now the largest exporter of IT goods. But, as globalisation transforms markets for technology and knowledge workers, China|s policy makers and corporate strategists are seeking for ways to move beyond the |global factory| model. This paper explores what is necessary and feasible. I introduce a concept of |industrial upgrading| that links specialisation with firm-level and industry-level upgrading and high integration into global networks. This concept is used to discuss specific innovative capabilities needed to upgrade China|s IT industry. I argue that ||technology leadership strategies|| are not the only option. ||Technology diversification|| can serve as a complementary and arguably less costly option.

Keywords: China; ICT; innovative capabilities; global factory; innovation; industrialisation; global networks; industrial upgrading; venture capital; technology catching-up; information technology; communications; technology diversification.

DOI: 10.1504/IJTG.2007.015459

International Journal of Technology and Globalisation, 2007 Vol.3 No.4, pp.437 - 459

Available online: 17 Oct 2007 *

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