Product Development And Production Networks:

Conventional views of comparative advantage hold that capital-inten-sive manufacture should be located in industrialised nations, while labour-intensive aspects should locate in developing nations. This view has had to come to terms with the fact that countries such as South Korea, Taiwan and now Mexico are 'creating' their own comparative advantage in advanced manufacturing through investments in skills and infrastructure. The case of the automotive industry in Mexico illustrates the working out of this new approach, as well as highlighting the difficulties and barriers that such countries face, particularly in new product development capacity.