Vertical dis-integration and vertical re-integration: Limits to the modern production system

This paper attempts to sketch the characteristics of mass production activities in the modern IT/electronics industry while avoiding simplification. In the second section “Revisiting the post-Fordism controversy”, we clarify that the general perception of the characteristics of American industry/corporate organization in the 1990s, particularly in the IT/electronics industry, was a series of discussions known as Wintelism. Next, the third section “The limits of Wintelism” discusses how the limits of this industry/corporate organization were revealed in the 2000s and thereafter, focusing on the characteristics particular to a model which is apt to promote accumulation of excess production capacity. It is also important to consider changing trends in product design, namely, the spread of “integrated products.” Then, in the fourth section “Addressing the limitations of Wintelism,” we examine how Apple, a leading brand from the developed world, and an EMS company from an emerging economy (Foxconn) that is a leader in today's mass production activities have tried to break through this limitation. What becomes clear is a phenomenon that could be called the rehabilitation of vertical integration or vertical reintegration. However, the mass production activities typified by Foxconn lack, at least at present, harmonization between industrial upgrading and “social upgrading,” labor-management cooperation, or a mechanism for “coordination.” This is one challenge for modern mass production activities. We touch upon this in the conclusion.