Development and Globalisation Case Studies

• BARBIE dolls were first produced in 1959 by the AMERICAN toy company MATTEL in JAPAN.
• In the late 1960s, the company moved its main factory to the island of Taiwan (in order to lower labour costs).
• This was widely seen as a 'TRAILBLAZER' for the outsourcing of production by TNCs that was to make EASTERN ASIA the workshop of the world.
• At its height, the Taiwan factory produced over half the Barbie dolls made.
• However, with 20 years, rising incomes in Taiwan led Mattel to look again for a cheaper labour source.
• In 1987, Mattel opened its first factory in China where wages were much lower and gradually production was moved there.
• Today, Mattel still makes Barbie dolls in 2 Chinese factories but also has production centres in Malaysia and Indonesia (a lower wage economy).
• The Taiwanese economy has benefited further from globalisation: the island is now home to many companies, whose names would be recognised in the UK, responsible for making most of the world's LAPTOPS, PERSONAL ORGANISERS and MP3 PLAYERS.

• ASUSTEK
  • IPODS and MAC MINIS for APPLE. It also makes the MOTHERBOARDS for 1 in 3 of the world's DESKTOP COMPUTERS.
• QUANTA
  • Largest manufacturer of laptop computers. Quanta and other Taiwan firms make 75% of DELL, SONY, COMPAQ, HEWLETT-PACKARD and other well known brands.
• TSMC (Taiwwan Semiconductor Manufacturing Company)
  • World's largest manufacturer of OUTSOURCED COMPUTER CHIPS with around 50% of the market.
• UMC (United Microelectrics Corporation)
  • Has another 25% of the COMPUTER CHIP market.
• BenQ 
  • Major manufacturer of MOBILE PHONES, CAMERAS and MP3s. In 2005, it brought the mobile phone divison SIEMENS, one of Europe's largest manufacturing companies.

Taiwan is concerned that these high-tech industries will also be moved to mainland China (BenQ and Asustek already operate factories in China). However, Taiwan's rulers seem confident that their reputation for reliabilty will allow them to remain in the ascendancy in these industries for the foreseeable future.

Characterstics:

• Lowest HDI in the world: 0.311
• 0.02 physicians per 1,000 population - 2.77 in the UK.
• Literacy= 28.7%.
• Agriculture provides 1/3 GDP and livlihoods for 9/10th of population.
• 63% are under the poverty line.
• $1.556 billion external debt.

Causes of poverty:

• Food insecurity and drought.
• Landlocked location.
• 80% of land = Sahara desert.
• Political instability (coup 2010).
• Dependent on external factors (uranium market, rainfall, donor financing- 1/2 government budget comes from aid).
• Poor infrastructure.
• Inadequate health and edcucation systems.

'Competitive advantages' for the location of firms in India:

• The second-largest Eglish-speaking human resource in the world.
• Investment- friendly and supportive governement policies.
• Adaptibility to new technologies.
• A world-class infrastructure in line with the developed countries for power, transport and data communication.
• The world's third-largest brain-bank, with around 2.5 million technical professionals.
• A stable democratic environment with over 50 years of independence.
• A large market size with a middle-class population of 250-350 million, with increasing purchasing power reflected by a hige increase in the purchase of consumer durables in recent years.
• Special investment and tax incentives given for exports in certain sectors such as electronics, telecom, software, and research and development activities. 

Advantages of Karnataka state in Bangalore:

• The state was the first in India to set up engineering colleges.
• It was te first to set up a technology university.
• It introduced a statewide policy to promote the IT industry with grants and tax incentives.
• In 1991 it established a software technology park in Bangalore which now covers 140,000 metres squared.
• It now has six further technology parks with a total area of around 560,000 metres squared.
• It has the best telecom infrastructure in the country.
• In 2008 plans to build:
  • New Green Park, for research into environmentally friendly building design  and construction(to build using investments from Saudi Arabia).
  • A NanoPark for research into nanaotechnology (technology dealing with matter on a molecular size scale of nanometres- 1 billionth a metre).
  • A biotech park for research into new medical, veterinary and plant technology.