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Complexity And Internationalisation Of Innovation — Why Is Chip Design Moving To Asia?

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  • DIETER ERNST

    (East West Center, Honolulu, Hawaii, USA)

Abstract

Among Keith Pavitt's many contributions to the study of innovation is the proposition that physical proximity is advantageous for innovative activities that involve highly complex technological knowledge. But chip design, a process that creates the greatest value in the electronics industry and that requires highly complex knowledge, is experiencing a massive dispersion to leading Asian electronics exporting countries. To explain why chip design is moving to Asia, the paper draws on interviews with 60 companies and 15 research institutions that are doing leading-edge chip design in Asia.I demonstrate that "pull" and "policy" factors explain what attracts design to particular locations. But to get to the root causes that shift the balance in favour of geographical decentralisation, I examine "push" factors, i.e., changes in design methodology ("system-on-chip design") and organisation ("vertical specialisation" within global design networks). The resultant increase in knowledge mobility explains why chip design — which in Pavitt's framework is not supposed to move — is moving from the traditional centres to a few new specialised design clusters in Asia.

Suggested Citation

  • Dieter Ernst, 2005. "Complexity And Internationalisation Of Innovation — Why Is Chip Design Moving To Asia?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 47-73.
    • Handle: RePEc:wsi:ijimxx:v:09:y:2005:i:01:n:s1363919605001186
    DOI: 10.1142/S1363919605001186
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    References listed on IDEAS

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    3. Olena Ivus & Walter G Park & Kamal Saggi, 2023. "Patent protection and the composition of multinational activity: Evidence from US multinational firms," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 14, pages 317-345, World Scientific Publishing Co. Pte. Ltd..
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    6. Alex da Silva Alves & Antonio José Junqueira Botelho & Virgínia Duarte, 2018. "Business Modeling and Public Policy in High-Tech Industries: Exploratory Evidences from Two Brazilian Semiconductor Support Programs," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(04), pages 1-25, August.
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    9. Ling Chen & Lan Xue, 2010. "Global Production Network and the Upgrading of China's Integrated Circuit Industry," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(6), pages 109-126, November.

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