How Sustainable are Benefits from Global Production Networks? Malaysia’s Upgrading Prospects in the Electronics Industry

A progressive integration of East Asia’s electronics industries into global production networks (GPNs) provides a fascinating example of the benefits that Asian firms can reap from linkages with foreign firms (see, for example, Borrus et al., 1997, 2000). Network participation has provided Asian producers with access to the industry’s main growth markets, helping to compensate for the initially small size of their domestic markets. It has also provided new employment opportunities, and induced Asian network suppliers to develop primarily operational technological and management capabilities (Ernst and Kim, 2002). As a result, East Asia has emerged as the dominant global manufacturing base of the electronics industry, especially for assembly and component manufacturing.