Comparative Advantage in Hard Drive Industry - Taiwan and Thailand

Computer industry is diversified multinational corporations can compete in industries that combine with high knowledge-intensity and a high degree of internationalization (Dieter 2000). The most important thing to compete the puzzle that we are going to discuss about is knowledge outsourcing throughout the variety of inter-organizational linkages between different countries base on each others’ comparative advantages. In this essay, it will divide to three parts. Firstly, it will introduce the Taiwan’s and Thailand’s electronic background. Secondly, it will discuss the comparative advantages between Taiwan and Thailand, and then use the case study to illustrate the operational state. Finally, it will make summary of this theory.

Taiwan and Thailand is the one of influential section in computer components supply chain of computer industry in the world. However, it is including multilaterally international partnership between the supplier and customers in this high knowledge-intensity industry.

The electronics industry is not only the largest export industry but also the largest manufacturing sector in Taiwan. Taiwan has developed electronic industry it also the world’s largest personal computer production bases (Sato 1997). However, ‘Taiwan were no longer concentrated in labor-intensive products, but were increasingly clustered in products with a high technology intensity, thus becoming more similar to the Japanese RCA pattern’ (Wlliam e.J, Oleksandr.M 2003).

Basing on comparative advantage, Taiwan has trained up following advantages. Firstly, Knowledge Economy is one of irreplaceable advantage. According to the World Bank’s Knowledge Economy Index Ranking (2012), Taiwan ranks 1st in Asia, above Hong Kong, Japan, Korea, Singapore and other major competitors. Especially well in the education, including innovation, information and communications technology (ICT) indexes, ranking among the world’s top 10 in all three. Furthermore, venture capital business living the leading position in Asia, Martin, Kyonghee and Shoko (2002) state many of Taiwanese computer-related company success because of venture capital funding, and it is also benefit to entire economy. Finally, Innovation Focus is the other major reason why products which made in Taiwan enable to stand on the main role of the whole property. (Dieter 2000) claims that Taiwanese enterprises have been able to build a strong international market position relatively early in the product cycle because of combining the incremental product innovation with fast speed-to-market. Efficiency of innovation systems was built with private, academic and official research institution.

According to Thailand.com