Innovation offshoring and Asia's electronics industry -- the new dynamics of global networks

This paper explores how innovation offshoring gives rise to Global Innovation Networks (GINs) in the electronics industry. The focus is on chip design. The paper documents the scope of offshoring and the progress achieved in the complexity of design stages and in capability upgrading in Asia. The paper explores the forces that are responsible for the organisational and geographical mobility of innovation within GINs emphasising their systemic nature. The paper argues that innovation offshoring is likely to accelerate Asia's transformation from the 'global factory' model to 'upgrading through innovation'. But massive challenges must be mastered before Asia's leading electronics exporting countries can exploit these opportunities. Such challenges result from the very demanding requirements that locations need to fulfil in order to qualify for R&D investments by Transnational Corporations (TNCs).