Future of Factory Asia

Publication | May 2014

The success of Factory Asia depends on how fast Asia can expand its domestic and regional markets, and upgrade the competitiveness of its manufacturing sector.

During the past 2 decades, the world has witnessed the rise of Factory Asia. Fueled by cheap and abundant labor, Asia has supplied many of the manufactured consumer goods the world needs. This model, i.e., “supply from the East, consume in the West,” has helped lift millions of Asians out of poverty.

Recently, questions have been mounting on the sustainability of Factory Asia. Since the onset of the global financial crisis, demand from advanced economies has remained subdued. Factory Asia has been seen as one of the main causes of the financial crisis through its contribution to a global imbalance. Unless Asia effectively addresses these concerns, the future of Factory Asia looks nebulous. This book has been initiated to assess the challenges confronting the Factory Asia model and provide suggestions and strategies to effectively handle such challenges.

In a nutshell, the success of the new Factory Asia hinges on two tasks: first, how fast can Asia expand its own domestic and regional markets; and second, how fast can Asia upgrade its competitiveness in the manufacturing sector. As analyzed in great detail and depth in this book, small and big obstacles stand in the way of fulfilling these tasks. Without clever economic reasoning, shrewd strategy, and immense political entrepreneurship, the new Factory Asia will remain as an unfinished agenda.

Contents 

  • Executive Summary
  • Beyond Factory Asia
    • Beyond Factory Asia: Fuelling Growth in a Changing World
    • Can Free Trade Agreements Support the Growth or Spread of Factory Asia?
  • Outsourcing Risks of Asian Manufacturing and Services
    • The Effect of International Outsourcing on Job Growth in the Republic of Korea
    • Do Small and Medium Enterprises Gain from Global Production Networks? Evidence from the Republic of Korea
    • Changing Competitiveness of the Japanese Manufacturing Sector and Firms in Regional Production Networks in Asia
    • Services Sector Integration in Asia: Emerging Regional Service Business Models
  • Source of Germany’s Competitiveness in Manufacturing
    • What has been Maintaining Germany’s Competitiveness in Manufacturing?