Wintelism and Production Networks in the Electronics Industry

A.J.W. van de Gevel

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This paper deals with two interrelated elements of globalization: Wintelism and cross national production networks which have been underexposed in discussions about globalization.Wintelism refers to the shift in competition away from final assembly and vertical control of markets by final assemblers toward a struggle over de factor product standards generating market power anywhere in the value chain.In electronics Intel and Microsoft are leveraging their control over PCs to alter the terms of competition by emphasizing the microprocessor resp. the operating system as de facto market standards.The creative use of intellectual property rights and associated licensing strategies define defensible market positions more than manufacturing cost as the basis of competitive advantage.Cross national production networks refer to the dis-integration of the industry's value chain into constituent functions which can be contracted out to independent producers wherever located in the global economy.These networks have emerged most clearly in Asia and have been used by American and Japanese firms.The development of USA direct investment in electronics in Asia over the past three decades will be examined and compared with Japanese investment in Asia.A production network typology will be used to analyse the positions of US, Japanese and Overseas Chinese electronic firms.The final question to be discussed is whether the production networks that have emerged in East Asia can become a significant feature of the integration of Central /Eastern Europe.The optic of such networks provides an alternative perspective on the East European economic transition.The basic conclusion is that Wintelism and networking were the principal means by which the US electronics industry recovered from its mid-1980 s crisis in competition with Japanese firms and will likely influence a broader range of sectors.However, there is nothing automatic about the benefits of participating in international production networks.Periodically there are important reversals in the distribution of such benefits.The China Circle will witness one of the great market battles in memory as US, Japanese and indigenous production networks vie for 21 st century advantage.
Original languageEnglish
Place of PublicationTilburg
PublisherDepartment of Economics
Number of pages34
Publication statusPublished - 1997

Publication series

NameFEW Research Memorandum


  • production
  • internationalization
  • electronics industry
  • economic networks


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