Technological strategies and trajectories of Hong Kong’s manufacturing firms

1. Technological strategies and trajectories of Hong Kong’s manufacturing firms 指導教授:張菽萱 教授 研究生:鄭雯涵 (94312039)

2. Abstract 1.This study attempts to interpret Hong Kong’s economic success by examining its national innovation systems. 2.This study investigates the technological catch-up paths taken up by Hong Kong’s manufacturing firms.

3. Abstract 3. Hong Kong relies on three major imitative strategies: reverse value chain strategy, reverse product life cycle strategy and process capability specialist strategy. 4.Firms in Hong Kong evolved into regional coordinators by extending their competence in managerial and consultancy services.

4. Introduction 1.Firms in late industrializing economies can build up their capabilities through organizational learning and imitation, and hence alter their prevailing competitive advantages. 2.During the initial stage of the development, due to low level of absorptive capacity and poor resource base, small firms in a latecomer economy can only conduct replication or pure copying.

5. Introduction 3.When multinational firms from advanced nations take advantage of cheap labor and land in latecomer economies by making foreign direct investment or subcontracting jobs to firms in developing economies, latecomer firms can then take the opportunity to learn from advanced firms. 4.During the imitation process, manufacturers pick and choose different models and later combine them into a novel product.

6. Capabilities development paths 1.Reverse value chain strategy: from OEM to OBM a. developing process capabilities (OEM) b. extension into product design capabilities (ODM) c. new product creation/branding activities (OBM)

7. Capabilities development paths 2.Reverse product life cycle strategy: late-follower to fast-follower a. pursuing product and process technological learning b. reposition the image (low-end producer to high-quality, high-sophistication manufacturers)

8. Capabilities development paths 3.Process capability specialist strategy a. expanding the vertical scope of process capabilities b. concentrating on becoming the supplier of specialized niche components or process steps

9. The national innovation system of Hong Kong 1. Imitation (family business) 2. Unsophisticated technology (quick returns) 3. Strategic followership

10. The factors that shaped the innovation systems of Hong Kong 1. Political factor 2. Initial industrial structure (small and quick returns) 3. The structure of competition (unprotected) 4. Cultural factor (familism)

11. Extending existing capabilities 1.Firms find that they can earn rewards through providing services to foreigners and serve as international coordinators. 2.By relocating or subcontracting labor-intensive activities to the other low cost regions, while keeping offices in Hong Kong as coordinating centre, these manufacturing firms have gradually evolved into trading firms.

12. Conclusion 1.Firms in Hong King adopted imitative strategies. 2.This study argues that relying on OEM business and learning from early industrialized nations can be useful development strategies.

13. Conclusion 3. Many manufacturing firms in Hong Kong relocated their production or subcontracted their jobs to other low costs countries, and became regional coordinators. 4. The growth experiences of the Asian latecomer firms reveal a various degree of government involvement in the industries.