AUTOMOBILE INDUSTRIALIZATION IN EAST ASIA:
POLITICAL ECONOMY OF NATIONAL PERFORMANCE
Richard Doner (Emory University)
Gregory Noble (University of Tokyo)
John Ravenhill (Australian National University
April 27, 20111
Project Overview
•
•
•
•
•
•
Co-authored book project on cross-national variation in East Asian automobile industries
Puzzle
– Extensive growth
– Upgrading
Alternative Arguments
DNR approach
Role of Business Associations
Limitations / Questions
2
Automobile Industry Performance: Extensive Growth / Upgrading
Extensive Growth
Upgrading
Vehicle production
Vehicle production
Parts production
Parts production
Vehicle exports
Vehicle exports
Parts exports
Parts exports
Auto trade balance
Auto trade balance
Auto employment as % of mfg.
Auto employment as % of mfg.
National ownership – assembly
National ownership – parts
Local value added / upstream linkages
Local technology capacity
OEM – ODM - OBM
Investment-driven growth
Innovation-driven growth
3
East Asian Auto Performance
Integrated Production
Korea
Upgrade
China
toward upgrading
Malaysia
No upgrade
Specialized Parts Production and Export
Taiwan
Partial upgrade (limited
to parts)
Volume Assembly / Export
Thailand
No upgrade
Indonesia
No upgrade
Philippines
No upgrade
Performance: Strong. Global automakers with world-class engineering /
design capabilities; two successful indep. brands (Hyundai-Kia); major
vehicle and parts exports; overseas assembly but few strong indigenous
components producers. Strategy change? No. Consistent support for
domestically-owned assemblers since 1960s
Performance: Strong. Increasingly competent Chinese-foreign joint
ventures; emerging independent firms with growing capacities
(augmented by foreign design and engineering consultants), own brands,
some export capability; major parts exports; some vehicle exports.
Strategy Change? Yes. After mid-1980s, significant opening to foreign
investment; active export promotion.
Performance: Weak. Indep. assembly capabilities (with substantial foreign
help on R&D), heavy protection and imported tech; limited exports of
assemb. vehicles; weak parts prod./exports. Strategy Change: Minimal.
Increase number of “national cars” and foreign involvement; slow trade
liberalization under AFTA
Performance: Strong. Significant exports of replacement parts; some
local OEM parts production; some regional and even global expertise in
electronics-related parts and electric vehicles (industry increasingly
economically integrated with that of mainland China). Strategy Change?
Yes: From mid-1980s, gradually reduced efforts to promote domestic
assembly base.
Performance: Strong. Assembly of volume models for local and regional
markets; significant regional exports of parts; foreign firms dominate;
weak indigenous presence: little local engineering or design; few
domestically-owned upper tier suppliers Strategy Change? Yes: From
mid-1980s, gradually reduced efforts to promote domestic assembly base
Performance: Weak but improving. Assembly of a few volume models
primarily for local market; some local production of OEM parts and
modest exports. Strategy Change: Yes. Shift away from extensive
protection of locally owned assembler and parts, especially after 1997
financial crisis
Strategy Change? Yes. Shift away from protected localization, but
new strategy still not clear. Strategy Change? Yes. Shift away from
4
protected localization, but new strategy still not clear.
Alternative Explanations
•
Market size / Scale economies
– Population not determinate of “effective market size” (Indonesia vs. China)
– Exports and niche markets (Thai one-ton pickup trucks; Taiwan REM exports; Korea “Pony”)
•
Washington Consensus: “Sound Money / Free Markets”
– Maro stability necessary….but
– NICs experience with “wrong” prices (e.g. low % loans, targeted fiscal incentives, e.g. Thai pickup)
– Trade liberalization important but
• Alternative sources of competitive pressures (export push)
• Benefits depend on build-up of local technol capacities
FDI
– Consequence or cause of development?
– Singapore vs. Malaysia?
– Endogenous growth: Benefits depend on domestic absorption capacities
– Promotes wage inequality? Depends on existing education system and pool of skilled labor
• Key role of technical education (e.g. Thailand)
• Growth of informal labor
•
5
“Institutions” Are The Answer….(well, sort of)
•
•
“Good Governance”
– Bureaucratic quality (Weberianness) is important (merit-based recruitment, stable career tracks,
expertise)
– But…value of bureaucratic quality depends on what leaders make of it
– But…effective institutional designs vary with policy goals / local conditions
– Capacity for experimentation key (e.g. China)
– Good governance “endogenous”?
“Developmental States”
– Highly useful in demonstrating benefits of coherent state intervention
– But danger of confusing institutional presence with institutional capacities (e.g. “pilot agencies”)
– Little attention to stage-specific needs
– Emphasis on autonomy minimized contribution of private actors (“embedded autonomy”? )
– Emphasis on autonomy led to “thin politics” – little attention to leaders’ motivations, pressures etc.
6
Political – Institutional Approach
• Development stages: Institutions for what?
• What kinds of competences and resources needed for different stages?
• What are the difficulties of building these competencies?
• Institutional design or institutional capacities?
• Politics of institutional origins: Where do “good” institutions come from?
7
Explaining Performance Variation
Resource
Providers
“Governing”
Institutions
state agencies
bus. Assocs.
Unions
pub.-priv. consult
buyers, competitors,
suppliers of
intermediates and
capital equipment,
public research
institutions, publicprivate research
consortia, companyoriented service
suppliers.
Competencies /
Resources
property rights
macro stability
investment incentives
trade administration
new markets
education / skills
R&D
standards / testing
Performance
Outcomes
extensive growth
upgrading
8
Performance Outcomes via Development Stages
•
Igniting vs. sustaining growth (Rodrik)
•
1st vs. 2nd generation econ reforms (Nelson)
•
“Extensive” vs. “intensive growth” (Irmen)
•
Diversification vs. specialization (Imbs and Wacziarg )
•
“Middle-income trap” (e.g. Yusuf / Nabeshima)
•
Extensive growth vs. upgrading
9
Extensive Growth: Challenges
•
Investment-driven process
– Requires mobilizing resources “hidden, scattered, or badly utilized...”
– Market failures: existing information and assets will not lead entrepreneurs to put
their resources into new activities.
– Need to facilitate investment of invest scarce funds in activities whose short-term
risks exceed potential but uncertain, long-term development benefits
•
Key challenge: Risk socialization
– Assume stable property rights and macro stability
– Information (e.g. through low interest loans, tax/tariff incentives)
– Coordination through provision of complementary assets (e.g. infrastructure)
– But also….expose producers to market discipline
•
However, …no focus on indigenous tech. capacity and/or linkages
10
Upgrading: Challenges of Learning and Linkages
•
Learning
– To operate existing production efficiently via engineering, product management, raw materials
control, scheduling, repair / maintenance, trouble shooting
– To create new capacity through search and select technology, new management skills etc.
– To innovate products and processes through adaptations of tools, products, processes
•
Challenges of innovation and improving technology capacity
– Innovation refers to products/processes “new” to firm
– Externalities (poaching)
– Public bads (monopolistic markets for certain technologies)
– Public goods (R&D)
– Information imperfection
• What works in local context?
• Variability of learning by technology
• Tacit, not codified knowledge need to “tinker”; requires active learning
•
Linkages: Ustream capacities developed enough to serve competitive downstream users
11
Competencies / Resources
Development Stages
Competencies /
Resources
Extensive
Growth
Competency/Resource
Providers
Upgrading
Open factor markets:
competitive pressures
on producers and
conditional access to
inputs
Investment incentives
(fiscal, monetary)
Scale economies:
Market exploration /
development
Scale economies:
industry rationalization
Infrastructure
tariff reduction; end
of NTBs
complex tariff regime to promote upstreamdownstream linkages
relatively generic
much more targeted
Competitors
export incentives
export incentives; identification of niches;
moderately important
very important
Suppliers of
intermediates, capital
equipment
logistical;
more specialized
Education and Skills
general education;
unskilled or semiskilled
need for higher-level and sector-specific skills;
better vocational and technical training
not necessary
important
local not needed
important to develop problem solving
capacities of local firms
Research and
Development
Standards and Testing
Others? (e.g.
Environmental
Services
Buyers / Global Value
Chains
Company-oriented
service suppliers
Customs agents
Industrial extension
agents
Public research
institutions
Public-private research
consortia / cooperative
learning arrangements
12
Distinguishing Development “Difficulties”
•
Number of actors whose participation is required to implement policy
•
Information intensity
– Level and novelty of technology
– Site specificity
– Availability of existing template
•
Distributional Consequences
–
–
–
•
Numbers of winners vs. losers
Political strength (e.g. cohesion, leverage) of winners vs. losers
Speed of gains vs. losses
Upgrading more difficult than extensive growth (ceteris paribus)
13
Competencies / Resources
Competencies /
Resources
Development Stages
Extensive
Growth
Open factor markets:
compet. pressures on
producers and
conditional access to
inputs
tariff reduction;
end of NTBs
Investment incentives
(fiscal, monetary)
Scale economies:
market development
relatively generic
Scale economies:
industry rationalization
Infrastructure
moderately
important
logistical;
Education and Skills
general
education;
unskilled or
semi-skilled
Research and
Development
Standards and Testing
Others? (e.g.
Environmental
Services
Upgrading
Difficulties / Challenges
Extensive Growth-- Upgrading
# Actors
complex tariff
regime to
promote
upstreamdownstream
linkages
much more
targeted
export
incentives; ID
niches;
very important
rising
more
specialized
higher-level and
sector-specific
skills
rising
rising
not necessary
Important
local not needed
Key for local
firms’ problem
solving
capacities
export incentives
Info.
complex
Distrib.
moderate
rising
complex
med-high
rising
med
low-med
Competency/
Resource
Providers
Buyers / Global
Value Chains
Competitors
Suppliers of
intermediates
and capital
equipment
high
Private service
suppliers (e.g.
training)
med
Customs agents
high
low-med
State industrial
extension agents
rising
high
low
rising
high
low
Public / private
schools, colleges,
polytechnics
Public research
institutions
Public-private
research
consortia / coop.
learning
14
Example: Investment Promotion
Dimension
Extensive Growth
Upgrading
Core objectives:
Job growth; foreign exchange;
access to GPNs
Job growth; foreign exchange;
technology / managerial spillovers;
stronger local producers
Incentives
Generic one-size-fits-all tax / tariff
incentives; pre-investment
screening;
Sector specific; more conditional
based on value added, tech.
sharing; emphasis on postinvestment performance
Information requirements
Relatively low (Thai BOI example)
High sector-specific info;
forecasting;
#s of Actors
Relatively low: mainly investment
promotion agency
High: Investment agency +
consultants, universities, RTOs,
firms
Distributional consequences
Low; mostly winners
Moderate: low performers lose
incentives
Promoting upgrading requires that “government investment agencies develop greater expertise and flexibility rather than a sector-neutral and minimally active policy stance” Felker and Jomo (2000: 17).
15
Example: Vocational / Technical Training
Dimension
Extensive Growth
Upgrading
Core objectives
Supply sufficient
personnel at lowest cost
Provide high-skilled personnel to attract
and benefit from higher value added
investments
Information
requirements
Low
High: narrow vs. broad curricula? How
technical?
#s of actors
Low
High(er): good curricula is “co-produced,”
i.e. involves input by consumers being
served
Distributional
consequence
Low
Moderate: requires consolidation and
higher entry barriers for providers
16
Vocational/Technical Training “Network” in Thailand
(Ritchie 2010)
17
Upgrading Requires “Governance” Institutions
•
“Governing” – reconciling interests and preference of diverse yet interdependent actors
•
State agencies with functional supervisory responsibility
–
–
–
Ministries
Investment promotion agencies
Environmental protection agencies
•
Business associations
•
Unions
•
Public-private consultative
18
Effective Governance Depends on
Institutional Capacities
•
•
•
•
Consultation
– Identify actors’ preferences, interests, capacities
– Multiple forms:
• Top-down vs. bi-directional
• Participation in formulation and/or implementation
• More difficult task, more bi-directional, participation in implementation
Credibility
– “Problems of credibility …major obstacle to better growth performance” (Brunetti and Weder 1994)
– Rewards and sanctions
– Need to avoid unexpected change (time inconsistency) while maintaining flexibility to change…based
on consultation
Monitoring
– Provides information about actors’ actual behavior
– “Without monitoring, there can be no credible commitment” (Ostrom (1990).
More difficult the development policy task, stronger institutions requires
19
Example: University-Industry Linkages in Thailand
• Collaboration fragile
• Partly result of weak S&T research in Thai universities
• Underlying problems in governance institutions, especially Ministries of
Education and University Affairs, as well as local business associations
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Automotive Business Associations
Taiwan
China
Thailand
Leadership /
composition
Largely local
Local and foreign …but
increasing local influence
Foreign dominated, espec. after ‘98;
fragmented – OEMs vs. REMs
Technical training?
Yes
Yes
Yes but weak: AHRDP led by MNCs
Data gathering?
Yes
Yes
Sort of; JETRO and private sector
more important sources
Standards and Testing
facilities?
Yes
Yes
Only partial, weak, recent
Commercial focus
Yes: auto shows; terms of
liberaliz. With PRC
Yes:
Yes: market devel; but MNCs key in
regional arrangements (BTB, AFTA)
Links to technical
institutes?
Strong: Auto Parts
Promotion Center;
Automotive Research and
Testing Center
Moderate (?): Often through
firm-based institutions?
Weak-moderate: Through Thailand
Automotive Institute
Strength of local
technical institutions
Strong
Moderate-strong
Weak: Operating under unstable
ambivalent / unstable MoI
Association’s consulting /
credibility / monitoring –
espec. technical issues
Strong
Moderate-strong
Very weak
21
Explaining Business Association Strength / Weakness
•
Level #1: Key role of state institutions in providing incentives for associational strength / role
– Corresponding ministries (e.g. Industry)
– Investment promotion agency
– “isomorphism” (coercive, mimetic, normative)
•
Level #2: Political Institutions (veto players)
– Number of parties and factions
– Government / cabinet (in)stability (The key government agency overseeing the auto
industry in Thailand – Ministry of Industry - had 14 different ministers in 11 Years)
•
Level #3: Preferences of Political Leaders
– Short term / particularistic focus on rewarding narrow coalitions
– Longer term / broader focus on development outcomes
22
Why Would Political Leaders Forego Short-term Gains
for Long-term Development?
•
•
Alternative approaches
– Good governance….but problems of measurement and endogeneity
– Democracy…but no clear link between regime type and development
– Deep background factors, e.g. colonial legacies…links unclear
– Able/corruption-free leaders…but silent on leaders’ incentives
Systemic Vulnerability
– Claims on state resources
• External threats requiring
• Internal, popular pressures and demands
– Available resources to satisfy claims
• Natural resource revenues
• Foreign aid
• Foreign investment
23
Political Origins of Institutional Capacities
Constraints / Pressures on
Political Leaders
Claims on resources
-external threats
-internal demands
Available resources
-natural resource revenues
-foreign aid
-FDI
Political Institutions
(veto players)
Preferences of
Political Leaders
Governance
Institutions’
Capacities
-consultation
-credibility
-monitoring
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Big Questions
•
Crises and Threats
– What constitutes crisis / threat?
– Threshold to promote institutional strengthening?
– Threshold to transform veto players?
– Mechanisms linking threats to outcomes?
– Positive outcomes inevitable? likely?
•
Ambiguous impact of FDI
– Source of technological spillovers….in presence of strong local competencies
– Can reduce demand for competencies by providing in-house or at home
– But sudden loss of FDI might prompt internal strengthening…?
•
Crisis as stimulus to cross-class collaboration
– N. Europe: “vulnerability and openness…(can)…impress on elites the need for internal
unity and cooperation” (Katzenstein 1985)“
– E. Asian NICs: threats key to push elites on need for export strategy that engaged and
rewarded non-elites, including labor
•
Expansion of informal labor
25
THANK YOU….
QUESTIONS? COMMENTS?
26
Difficult Analytics of Crises
•
Crisis literature is extensive but offers few consistent guidelines
–
–
–
•
Defining “crisis:” dimensions of difference
–
–
–
–
•
What is a “real crisis”?
Impact and consequences?
Mechanisms through which crises influence outcomes?
Substance: economic vs. political
Spatial: internal vs. external
Onset speed: rapid vs. gradual (Pierson: “time horizons”)
Duration: shorter vs. longer
Crisis categories: from shock to ongoing threats
–
–
–
–
–
–
Rapid onset, short-term, exogenous econ. shock (e.g. 1997 Asian $ crisis)
Rapid onset, long-lasting, exogenous econ. shock (e.g. 1970s oil crisis)
Gradual onset, long-lasting, endogenous econ. “exhaustion” (ISI, mid-income trap)
Gradual, long-term external security threats (e.g. S. Korea, Taiwan post-WWII)
Gradual, long-term (?) contentious politics (e.g. Singapore labor early 1960s)
Gradual, long-term combination of external / domestic political threats with low access to resources, i.e. systemic
vulnerability (e.g. E. Asian NICs)
27
Impacts of Crises
•
Views on crises’ impacts have evolved
– Initially very optimistic: (“f there is one single theme…(in)…the political economy literature it is…that crisis is instigator
of reform” – Rodrik 1996)
– Now, recognize cross-national variation in response to similar crisis
– Now, disaggregate reform process (formulation, implementation, sustinability, macro/micro components)
– Now, highlight key role of domestic variables
• Nature of coalitions
• Nature of assets held
• Capital-labor conflicts
• Political institutions..influencing elite cohesion
– Now, suggests causal mechanisms
•
Mechanisms: How might crises influence outcomes
–
–
–
–
Learning: chaos  reassessment of previous policies and new mapping
Special politics: economic disarray and weaker opposition suspension of rules and delegation of authority to
particular actors
Change in equilibrium behavior: actors revise payoffs and time horizons
Increase risk-taking behavior (“prospect theory”)
28
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Preliminary Arguments
•
Mechanisms: Crises and Innovation
– Learning: scanning for new models and institutional experimentation
– Change in equilibrium behavior: lengthen time horizons to account for long gestation periods
– Increase risk-taking behavior: forego immediate benefits of particularistic policies for longer-term
benefits of more public goods
– Special politics: reduction in # of veto players AND/OR increase in # of veto players, i.e. elite cohesion
and popular/labor incorporation
•
When will such mechanisms operate? What kinds of crisis?
– Gradual onset, multi-dimensional, threats ,as reflected in the vulnerability concept , constitute a
necessary condition for the development of innovation-supporting institutions
29
29
Title
Indicator
Year
Notes
China
Indo.
Korea
Malay.
Phils.
Thai
Taiwan
13,790,994
464,816
3,512,926
489,269
62,523
999,378
226,356
Extensive Growth
Vehicle prod. - cars and
commercial vehicles (units)
2009
Vehicle prod. - cars (units)
2009
1, 8
10,383,831
352,172
3,158,417
447,002
28,169
313,442
251,490
Vehicle prod. - commercial
vechiles (units)
2009
1, 8
3,407,163
112,644
354,509
42,267
34,354
685,936
51,966
Vehicle export (units)
2009
2, 3
153,740
48,222
1,462,218
21,791
7,731
1,321,864
15,560
Vehicle import (units)
2009
2, 3
409,225
67,619
78,647
333,458
130,227
42,737
52,482
Vehicle export (Value) (in USD
except for Malaysia)
2009
2, 3, 9
1,104,609,515
628,661,069
22,396,942,201
145,031,166
94,354,176
4,090,004,688
203,928,742
955,442,302
462,385,421
1,349,326,857
-861,088,126
3,627,619,267
-1,145,398,115
1,836,946,849
4,841,374,536
139,671,696
- Calculating USD equivalent
Vehicle import (value) (in USD
except for Malaysia)
41,143,593
2009
2, 3, 9
14,354,398,503
902,297,098
1,862,825,578
- Calculating USD equivalent
Auto trade balance (value)
1,579,587,714
448,109,990
2009
7, 9
13,249,788,988
-273,636,029
20,534,116,623
- Calculating USD equivalent
1,434,556,548
-406,966,397
Parts prod.
Parts export (in USD except
for Malaysia and Taiwan)
2009
4, 5, 6
26,285,581,680
2,838,111,670
9,615,868,304
862,048,628
- Calculating USD equivalent
Parts import* (in USD except
for Malaysia and Taiwan)
4,226,136,432
2009
4, 5, 6
21,149,069,746
2,405,294,320
5,840,650,186
2,138,522,977
366,345,604
3,707,147,788
- Calculating USD equivalent
Auto trade balance (Parts)
Total Exports (in USD except
for Malaysia)
Global share of auto. products
in
trade
Auto employment as % of mfg.
60,049,234
1,816,948,335
2009
5, 7
5,136,511,934
432,817,350
3,775,218,118
1,276,474,349
1,470,601,245
1,134,226,748
79,622,462
2009
3, 9, 10
1.20165E+12
1.1651E+11
3.63531E+11
1.57195E+11
38435801947
1.52497E+11
193,801,188,481
2.28%
2.98%
8.81%
0.64%
5.02%
5.86%
0.18%
2.88
9.10
6.12
3.09
2009
2008
11, 12,
16
30
3.45
31
Indicator
Title 2
Year
Notes
2010
13
China
Indo.
Korea
Malay.
Phils.
Thai
Taiwan
Nat'l ownership: assembly
Nat'l ownership: parts
OEM / ODM/ OBM
Value added as % of overall mfg.
Value added as % of manufacturing industry
10.30
14, 15
- manufacture of motor vehicles
2.9
7.3
6.1
2.4
3.2
7.3
- manufacture of bodies (coachwork) for
motor vehicles
0.2
0.1
0.1
0.2
0.2
- manufacture of parts and accessories for
motor vehicles
2.1
1.6
4.7
1.0
4.8
Notes
(1) www.oica.net
(2) Data refers to “Motor vehicles for the transport of persons”. Source: COMTRADE, SITC Rev.3
(3) Data for Taiwan is sourced from Taiwan's Bureau of Foreign Trade Statistics (http://cus93.trade.gov.tw/ENGLISH/FSCE/)
(4) Parts refer to the same product codes that we had using when calculating Low/Medium/High tech components. Source: COMTRADE, SITC Rev
(5) Data denominated in USD except for Malaysia (MYR) and Taiwan (NT$1000)
(6) Data for Taiwan is sourced from http://www.ttvma.org/information.php
(7) Negative number means a trade deficit.
(8) Data for Philippines sourced from http://www.asean-autofed.com/statistics.html
(9) Data for Malaysia denominated in MYR
(10) Data sourced from COMTRADE, SITC Rev 3
(11) For Indonesia, Malaysia, Philippines - calculated from data extracted from ILO LABORSTA Database. Employment in Auto industry refer to employment in the
manufacture of motor Vehicles, Trailers and Semi-Trailer and other transport equiment.
(12) For Korea, source: Korean Automobile Industry Report 2008
(13) For Korea, source: Korean Automobile Industry Report 2010
(14) Source: Unido website (http://www.unido.org/index.php?id=1000313)
(15) Data for China is 2007, Philippines is 2005, the others 2006
(16) Data for Taiwan is for 2006 and is calculated from data extracted from http://win.dgbas.gov.tw/dgbas04/bc2/ics95/GENERAL/EN/ZG8.pdf
32
World trade of automotive products by selected
countries 2001-08 (USD billions)
Source: WTO Statistics
database time series.
Accessed by 14.12.2009.
Figures are rounded off.
Notes: SITC groups 781,
782, 783, 784, and
subgroups 7132, 7783.
USD at current prices. #)
Estimated value.
Taken from Peter Wad,
“Impact of the Global
Economic and Financial
Crisis over the Automotive
Industry in Developing
Countries” UNIDO
Working Paper.
33
Global South motor vehicle manufacturers’ production
(all types) and ranking 2001-07 (million units)
Source: OICA statistics.
For Proton 2007,
Automotive Quarterly
Review 2008 Q4, fig. 3.3
p. 229.
Taken from Peter Wad,
“Impact of the Global
Economic and Financial
Crisis over the
Automotive Industry in
Developing Countries”
UNIDO Working Paper.
34
Development Stages, Competencies, Difficulties
Competencies /
Resources
Property rights
Development Stages
Extensive Growth
Upgrading
general
general and technical / IPRs
Exchange rates
Open factor markets:
competitive
pressures /
conditional input
access
Macroeconomic
Stability
Investment
incentives (fiscal, $)
stable
tariff reduction;
end of NTBs
stable
complex tariff regime to
promote upstreamdownstream linkages
important
important
relatively generic
much more targeted
Trade administration
efficient customs;
fast-track;
complex...
Scale economies:
new market devel.
Scale economies:
industry consolid.
Infrastructure
Local supplier
development
Labor market
Education and Skills
export incentives
export incentives;
identification of niches;
very important
R&D
not necessary
Standards /Testing
local not needed
moderately
important
logistical;
n.a.
flexible
general education;
unskilled or semiskilled
more specialized
critical
flexible and specialized
need for higher-level and
sector-specific skills; better
vocational and technical
training
important
important to develop problem
solving capacities of local
firms
Difficulties Moving to Upgrading
Information
#s of actors
distributional
costs
more technical,
rising
n.a.
specific
not demanding
few
stable
more productrising due to
specific
need for more
info.
technical but not
changing
high; sector-specific
few
few
moderate due
to need for
consult. and
monitor.
few
moderate:
benefits
depend on
performance
low
moderate
?
high
technical; rising
rising
low?
high: needs to be
sector - or productspecific
moderatehigh
low
high
moderatehigh
moderate
moderate
increasingly
technical, product
specific
high
moderate:
important for
potential
winners
35