technologies as a determinant of industrial development and specialization.
This is
because the flying geese concept denotes a group of economies arranged orderly in some
Industries or industrial
tiers in accordance with their stages of industrialization.
production processes or technologies will be passed on from a higher tier to a lower tier
when comparative advantages change in such a way that it is no longer profitable for the
higher tier economies to engage in the production of the product. In the Asian Pacific
context, it implies that industries are passed on from the U.S. to Japan, then to the NIES,
and then to the ASEAN (Yamazawa, 1990). This hypothesis in essence asserts that there
is a product life cycle and countries participate in the production of the product at
different stages of the cycle in accordance with their comparative advantages. With rapid
developments of new technologies and a trend of increasing globalization of production
and technology, product life cycles if existing at all tend to be very short. It is for this
reason that the product life cycle hypothesis of foreign investment is to be reassessed.
A trend which we have observed most recently and which will certainly continue
is a specific pattern of industrial specialization among developing countries generated by
the development of a specific new technology. It is no longer always true that an
industry is first established in an advanced country and then passed on to the next tier
of countries in the next phase of the product cycle. Rather, it is a specialization of
different countries in the different sub-sectors of the various industries that are affected
by a newly developed technology soon after the technology is commercialized. Instead
of a product life cycle, we should be speaking of a technological cycle in which industries
are affected or created by a new technology and countries specialize in different
industries and sub-sectors at different stages of the technological cycle. The new
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