Gary Gereffi

The Emergence of a Global Manufacturing System

p. 211 -- international trade and production is linked by core corporations

increase in industrial diversification to the third world, while each country is increasing specialization, shift towards export-oriented development strategies

Worldwide industrialization

p. 212 -- industrialization is no longer development

industry as a percentage of the economy has been growing in all third world nations at the expense of agriculture

East Asia has more manufacturing than any other developing region

Diversified, export-oriented industrialization

p. 213 -- the world trade has grown 30x since 1960

dramatic increase in high tech and medium tech exports from the East Asian NICs

exports are a much larger part of GDP for developing nations than for the developed nations

manufactured exports dominate in the NICs, much less so in Africa

textiles went down in the NICs and they went up in the less developed nations

Geographical specialization ad export niches

p. 214 -- NICs are getting more specialized in their exports

vertical integration of corporations and state support helps the countries to enlarge and upgrade their niches

p. 215 -- move towards chains dominated by corporate investment or purchasing

Producer-driven vs. Buyer-driven commodity chains

Global commodity chains are not only international, but global in that their scope is of a world market, not just crossing national boundaries

p. 216 -- two types of chains: producer- and buyer-driven

producer-driven: administrative control by the TNC -- produces just for them, often some investment, sub-contracting as well

automobile industry is a prime example of producer-driven chains

buyer-driven: decentralized system encouraged by a distributor making a large OEM order with specs to a manufacturer. often cheap, labour intensive products.

in the buyer-driven chains the buyers do not own any of the production means. they just hire it in effect.

producer-driven chains allow the producers to keep others out of the market due to the high entry costs

p. 219 -- buyer-driven chains are costly to enter at the retail level where you have to have store networks and brand name recognition

Local Patterns of Global Sourcing

p. 220 -- the more elite a product, the more advanced a country it will come from

the more expensive and skilled workers are used to produce the more complicated merchandise

p. 223 -- high end producers will produce in the advanced and least advanced countries as they are confident of their quality control standards and they realize that the more advanced countries are more flexible while the less advanced ones are cheaper

outer (lower) producers are lower quality, take longer, and cheaper

‘Triangle Manufacturing’ in Global Commodity Chains

p. 224 -- outsourcing by the NICs to cheaper labour countries to avoid import quotas

has brought production to many smaller nations and moved the NICs from production to middleman status

p. 225 -- getting harder to compete as the US is placing quotas on these new countries more quickly and the technology transfer from the NICs allows them to produce much more efficiently

Conclusions

p. 226 -- Industrialization is not the same as development

To be competitive you have to get ahead and stay ahead -- much harder these days

The countries should try to move up the commodity chains to the highest value added levels to gain the most benefit, but this requires the most education and infrastructure

p. 227 -- buyer-driven chains allow for great flexibility for the top, but great instability for the bottom -- the end retailer can easily change producers if market or political conditions encourage it

triangle production takes advantage of higher quotas in other nations

the NICs have been able to provide a stable interface to cheaper markets

p. 228 -- exporting is only good in the long run for developing countries if it is the first step in a move towards market integration