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Globalization and Increasing Returns: Implications for the U.S. Computer Industry

Author

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  • Kenneth L. Kraemer

    (Graduate School of Management, Center for Research on Information Technology and Organizations, University of California, Irvine, California 92697)

  • Jason Dedrick

    (Graduate School of Management, Center for Research on Information Technology and Organizations, University of California, Irvine, California 92697)

Abstract

Over the last twenty years, the computer industry has become global with respect to computer production as well as computer use, a trend which has raised concerns among U.S. policymakers of hollowing out the industry and exporting employment. This paper uses the framework of increasing returns to analyze the issue. It classifies market segments within the computer industry, shows how the advent of the personal computer created these segments, examines how this change in the structure of the industry led to the evolution of an Asia-Pacific production network, identifies company and country leadership in this network, and evaluates the implications for the United States. It shows that some manufacturing employment, mainly in the decreasing returns segments of the industry, has shifted to the Asia-Pacific region. However, it also shows that employment in some manufacturing segments and in software and services, which are increasing returns or hybrid markets, has increased dramatically in the United States. It concludes that the global division of labor between the United States and both companies and countries in the Asia-Pacific region has been largely positive in that it has supported the continuing U.S. leadership position in the global computer industry.

Suggested Citation

  • Kenneth L. Kraemer & Jason Dedrick, 1998. "Globalization and Increasing Returns: Implications for the U.S. Computer Industry," Information Systems Research, INFORMS, vol. 9(4), pages 303-322, December.
  • Handle: RePEc:inm:orisre:v:9:y:1998:i:4:p:303-322
    DOI: 10.1287/isre.9.4.303
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    References listed on IDEAS

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    1. Cusumano, Michael A. & Mylonadis, Yiorgos & Rosenbloom, Richard S., 1992. "Strategic Maneuvering and Mass-Market Dynamics: The Triumph of VHS over Beta," Business History Review, Cambridge University Press, vol. 66(1), pages 51-94, April.
    2. Borrus, Michael, 1997. "Left for Dead: Asian Production Networks and the Revival of US Electronics," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt2db8s8x6, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
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    Cited by:

    1. B B M Shao & W S Shu, 2004. "Productivity breakdown of the information and computing technology industries across countries," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(1), pages 23-33, January.
    2. Jonathan Whitaker & Sunil Mithas & Che-Wei Liu, 2019. "Beauty Is in the Eye of the Beholder: Toward a Contextual Understanding of Compensation of Information Technology Professionals Within and Across Geographies," Information Systems Research, INFORMS, vol. 30(3), pages 892-911, September.
    3. Youngsoo Kim & Ramayya Krishnan & Linda Argote, 2012. "The Learning Curve of IT Knowledge Workers in a Computing Call Center," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 887-902, September.

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