FROM GLOBAL TO REGIONAL PRODUCTION NETWORKS IN THE TELECOM SECTOR: IMPLICATIONS FOR INDUSTRIAL UPGRADING IN EAST ASIA

This paper investigates the evolution of international production networks in the telecom sector over the last two decades. Telecom production has been progressively more dispersed across countries, with emerging economies in East Asia spectacularly increasing their shares in world exports and, at the same time, experiencing industrial upgrading from labour-intensive activities to the manufacture of telecom parts and components. Originally driven by US telecom manufacturers' outsourcing practices mainly to East Asia, telecom production networks have recently undergone major restructuring through the expansion of contract manufacturers operating on a global scale. At the same time, production networks have become more regional, with two emerging trends: on the one hand, Mexico has been increasingly serving the United States as a production base for telecom equipment; on the other hand, there are stronger production networks within East Asia, as Japan and the first-tier NIEs (Hong Kong, Singapore, South Korea and Taiwan) are deepening their division of labour with emerging Asian economies. These geographical and organisational changes pos serious challenges to further upgrading of East Asian suppliers.