Health, Women's Work, and Industrialization - Center for Gender in ...
Health, Women's Work, and Industrialization - Center for Gender in ...
Health, Women's Work, and Industrialization - Center for Gender in ...
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<strong>and</strong> because manufacturers need to hol d 1 abor costs down, Ameri can<br />
semi conductor fi rms, bei ng <strong>in</strong>dustry 1 eaders, began to set up an<br />
<strong>in</strong>ternational assembly l<strong>in</strong>e <strong>in</strong> the 1960s, with the Europeans <strong>and</strong> Japanese<br />
follow<strong>in</strong>g shortly thereafter. The semiconductor <strong>in</strong>dustry's search <strong>for</strong><br />
off-shore locations co<strong>in</strong>cided with the adoption of a rapid <strong>in</strong>dustrialization<br />
strategy by many Asian countries. It was a time when a development strategy<br />
of import-substitution was seen as a failure. When Taiwan's Kaohsiung Free<br />
Trade Zone was successfully set up <strong>in</strong> 1965, other governments also bui lt<br />
free trade zones <strong>and</strong> developed <strong>in</strong>dustrialization policies that were<br />
export-oriented. To attract <strong>for</strong>eign <strong>in</strong>vestments, Asian governments offered<br />
a variety of <strong>in</strong>centives, such as tax holidays, import duty waivers,<br />
unl imited repatri ati on of profits, <strong>and</strong> control s of 1 abor-organi z<strong>in</strong>g<br />
activiti es. These governments, <strong>in</strong>terested <strong>in</strong>a 11 types of di rect <strong>for</strong>ei gn<br />
<strong>in</strong>vestments, found opportunities <strong>in</strong> all branches of electronics, garments,<br />
textiles, footwear, toys, sport<strong>in</strong>g goods, <strong>and</strong> other labor-<strong>in</strong>tensive<br />
enterprises.<br />
Among the semiconductor manufacturers, Fairchild was the first to beg<strong>in</strong><br />
off-shore sourc<strong>in</strong>g when it set up an assembly plant <strong>in</strong> Hong Kong <strong>in</strong> 1962.<br />
General Instrument was the first <strong>in</strong> Taiwan <strong>in</strong> 1964, <strong>and</strong> Fairchild the first<br />
<strong>in</strong> Korea <strong>in</strong> 1966. Nati onal Semi conductor estab 1 i shed a flood of fi rms <strong>in</strong><br />
S<strong>in</strong>gapore <strong>in</strong> 1968 <strong>and</strong> Malaysia <strong>in</strong> 1973, <strong>and</strong> then set up the first plant <strong>in</strong><br />
Thail<strong>and</strong> <strong>in</strong> 1974. Assembly plants were set up <strong>in</strong> the Philipp<strong>in</strong>es <strong>and</strong><br />
Indonesia <strong>in</strong> 1974. Although Asia has been the preferred region <strong>for</strong><br />
off-shore sourc<strong>in</strong>g, a few plants are also found <strong>in</strong> the Caribbean area <strong>and</strong><br />
Mexico. In these less developed countries (LOCs), the semiconductor firms<br />
were <strong>in</strong>volved only <strong>in</strong> the most labor-<strong>in</strong>tensive process (assembly), with<br />
other steps <strong>in</strong> the process bei ng done at the home country; only <strong>in</strong> recent<br />
years have they started to shift test<strong>in</strong>g operations to a few Asian<br />
countri es. Today, wi thout excepti on, every establ i shed U. S., if not other,<br />
semiconductor firm is engaged <strong>in</strong> some off-shore assembly.<br />
Economic imperatives were important <strong>in</strong> the move to develop a global<br />
assembly l<strong>in</strong>e. Studies of <strong>in</strong>dustry leaders (Saxenian 1981; Lim 1978a) cite<br />
as the most important reason <strong>for</strong> locat<strong>in</strong>g overseas the plentiful supply of<br />
low wage labor <strong>in</strong> LOCs. When the electronics <strong>in</strong>dustry was rapidly<br />
develop<strong>in</strong>g <strong>in</strong> Asia <strong>in</strong> the mid-1970s, low wages (see Table 1), especially<br />
relative to the level <strong>in</strong> the U.S., presented a great attraction to the TNCs.<br />
Although wages <strong>in</strong> all these countries are low, there are substantial<br />
differences among them, <strong>in</strong> part refl ecti ng the chronology of el ectronics<br />
<strong>in</strong>dustry locations <strong>in</strong> Asia. Between 1976 <strong>and</strong> 1980, wages <strong>in</strong> electronics had<br />
risen considerably <strong>in</strong> these countries. Still, the wages were substantially<br />
less than those <strong>in</strong> the U.S. or Japan, as seen <strong>in</strong> Table 2.<br />
Other issues identified by the corporations as important locational<br />
factors were: (1) the cost, reliability, <strong>and</strong> accessibility of transportation<br />
<strong>and</strong> communications, (2) tax holidays <strong>and</strong> other <strong>in</strong>vestment <strong>in</strong>centives, (3)<br />
proximity to local markets, (4) local <strong>in</strong>frastructure, <strong>and</strong> (5) political<br />
stability (<strong>in</strong>clud<strong>in</strong>g ability to control labor unrest).