Transcript 4 Tigersx

The 4
Tigers
The highly developed
economies of Hong
Kong, South Korea,
Singapore, and Taiwan.
South
Korea
Taiwan
Hong
Kong
Singapore
These four areas had a over 7% growth
rate for other import between the early
1960’s-90’s.
-major government investments in education,
-non-democratic and relatively authoritarian political
systems (at least in the beginning),
-high levels of U.S. bond holdings,
-high public and private savings rates.
Japan after WW2
• Japan’s industries suffered greatly during World War
Two. In an attempt to combat the threat of
communism the USA helped rebuild their economy.
• As an island nation, which only 10% is arable, Japan
had colonized place like Korea and China to get its raw
materials.
• Now they had to come up with ways to make their
industries profitable.
• At first they were known for high quantity low quality
goods, now it is the opposite.
Japanese Economic Strategies
• Change from Fordist to Flexible Economics (or large do-it-all
factories to smaller, specialized factories)
• JIT: Just in Time
Delivering parts just when you need them
Cheaper warehousing ( lower storage costs)
Diversity of parts
» Need a way to get resources in, products out
• Miniaturization: making products smaller
Tube to transistor
• Making more high order G/S
Cameras, watches, etc. (process has continued to cars)
Tiger System
farming out the industries
Since most money is made in the research and design (R&D) phase.
Japan does that Part and the labor in other countries does the actual
production. Japan kept industries that added prestige and high profits in the
country.
Japan controls Capital and Managerial Skills
Other countries provide Land and Labor
• Japan builds highest profit/prestige items
Cars: Acura, Infinity, Lexus, drivetrains for Ford
Cameras, cell phones, watches, etc.
Note: Since the 1990’s Japan’s economy has struggled The Tigers are not as
attached to Japan as they once were. Here is a brief synopsis of current
practices in the Tigers.
Taiwan is a good example of this group’s development. Agriculture contributes 3% to GDP, down
from 35% in 1952, and the service sector makes up 73% of the economy. Traditional laborintensive industries are steadily being moved off-shore and replaced with more capital- and
technology-intensive industries.
The structure of the industry in Taiwan includes a handful of companies at the top along with
many small and medium-sized enterprises (SME) which account for 85% of industrial output.
These SMEs usually produce products on an original equipment manufacturer (OEM) or original
design manufacturer (ODM) basis, resulting in less resources spent on research and
development.
The electronics sector is Taiwan's most important industrial export sector and is the largest
recipient of U.S. investment. Most car electronics come from Taiwan.
Taiwan's information technology industry has played an important role in the worldwide IT
market over the last 20 years . Taiwan is the world's largest supplier of contract computer chip
manufacturing (foundry services) and is a leading LCD panel manufacturer, DRAM computer
memory, networking equipment, and consumer electronics designer and manufacturer.
Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics
Corporation (UMC) are the two largest contract chipmakers in the world, while MediaTek is the
fourth-largest fabless supplier globally. In 1987, TSMC pioneered the fabless foundry model,
reshaping the global semiconductor industry
-A fab is a facility that produces its own silicon wafers. A fabless facility is one that outsources the
production of silicon wafers. Fabless companies focus on the design and development of their products.
Singapore's strategic location on major sea lanes and industrious population have given the
country an economic importance in South-east Asia disproportionate to its small size. Upon
separation from Malaysia in 1965, Singapore was faced with a lack of physical resources and a
small domestic market.
Singapore has limited arable land that Singapore and relies on the agrotechnology park for
agricultural production and consumption. Human Resource is another vital issue for the health
of Singaporean economy.
Singapore acts as a Entrepot, a place where goods can be moved on and off without tariffs. It
also uses its highly skilled workforce to build extremely high tech goods.
Major industries:
Banking: Singapore is a financial center in Southeast Asia. (According to the Human
Rights Watch, due to its role as a financial hub for the region, Singapore has
continually been criticized for reportedly hosting bank accounts containing ill-gotten
gains of corrupt leaders and their associates, including billions of dollars of Burma’s
state gas revenues hidden from national accounts.)
Biotechnology: Singapore is aggressively promoting and developing its
biotechnologyindustry. Hundred of millions of dollars were invested into the sector
to build up infrastructure, fund research and development and to recruit top
international scientists to Singapore. Leading drug makers, such as GlaxoSmithKline
(GSK), Pfizer and Merck & Co., have set up plants in Singapore
Oil Refining: Singapore is the pricing center and leading oil trading hub in Asia. The
oil industry makes up 5 per cent of Singapore's GDP, with Singapore being one of the
top three export refining centers in the world. In 2007 it exported 68.1 million tons
of oil. The oil industry has led to the promotion of the chemical industry as well as
oil and gas equipment manufacturing
Investment: Major Singapore's largely corruption-free government, skilled
workforce, and advanced and efficient infrastructure have attracted investments
from more than 3,000 multinational corporations (MNCs) from the United States,
Japan, and Europe.
South
Korea
Gagnam, South Korea
South Korea is the world’s 15th largest economy in terms of GDP and its
growth is continuing into the 21st century. South Koreans refer to this
growth as the Miracle on the Han River. Having almost no natural
resources and always suffering from overpopulation in its small territory,
which deterred continued population growth and the formation of a
large internal consumer market, South Korea adapted an exportoriented economic strategy to fuel its economy, and in 2010, South
Korea was the seventh largest exporter and tenth largest importer in the
world.
Major industries:
Shipbuilding: Korean shipbuilders are Hyundai Heavy Industries, Samsung Heavy Industries,
Daewoo Shipbuilding & Marine Engineering, and STX Offshore & Shipbuilding, and are the
world's four largest shipbuilding companies.
Cars: Hyundai Motor Group
Construction: especially in the Middle East
Armament: weapons (rifles, ships, and airframes)
Hong Kong
Hong Kong: Banking
As one of the world's leading international financial centers, Hong Kong’s service-oriented
economy is characterized by low taxation, near-free port trade and well-established
international financial market.
Hong Kong is a favorable destination especially for international firms and firms from Mainland
China.
Hong Kong has ranked as the world's freest economy in The Wall Street Journal and Heritage
Foundation's Index of Economic Freedom for 17 consecutive years, since the inception of the
index in 1995. The Index measures restrictions on business, trade, investment, finance, property
rights and labor and considers the impact of corruption, government size and monetary controls
in 183 economies. Hong Kong is the only one to have ever scored 90 points or above on the 100
point scale.
The Hong Kong Stock Exchange is the 6th largest in the world, with a market capitalization of
about US$2.97 trillion.
By the late 20th century, Hong Kong was the seventh largest port in the world and second only
to New York and Rotterdam in terms of container throughput.
Hong Kong has also had an abundant supply of labor from the region nearby. A skilled labor
force coupled with the adoption of modern British/Western business methods and technology
ensured that opportunities for external trade, investment, and recruitment were maximized.
So what do these places have in common?
• Three of four are islands and South Korea might as
well be
• Finite land and resources
• Very involved in manufacture and shipping
– especially containerized/intermodal shipping
• Once dominated by Japanese multinational
corporations, all have taken steps to strengthen
their own economies
– especially infrastructure/education
Taiwan