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1 The Production of Electronic Components for the IT Industries: Changing Labour Force Requirements in a Global Economy (Meeting: 16 – 17 April 2007) Paul.

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Presentation on theme: "1 The Production of Electronic Components for the IT Industries: Changing Labour Force Requirements in a Global Economy (Meeting: 16 – 17 April 2007) Paul."— Presentation transcript:

1 1 The Production of Electronic Components for the IT Industries: Changing Labour Force Requirements in a Global Economy (Meeting: 16 – 17 April 2007) Paul Bailey: baileyp@ilo.org Sectoral Activities Branch (SECTOR)

2 2 Definition of IT sector ISIC 30 (office, accounting and computer equipment) ISIC 31 (electrical machinery) ISIC 32 (radios, TVs and communication equipment) International Standard Industrial Classification

3 3 IT, telecommunication and content activities of firms Telecommunications (goods and services) including manufacturing and disposal IT (goods and services) including manufacturing and disposal Offline multimedia Online including interactive Transmission Information content (film production, information services, the media) Networking

4 4 The major players Original equipment manufacturers (OEMs) – brand name companies (HP, Dell, Toshiba, Sony, Lenovo, Apple, etc.) Contract manufacturers, Electronics manufacturing services (EMS) providers (Selectron, Flextronics, Jabil Circuit, Celestica, Foxconn, Sanmina-SCI) Original Design Manufactures (ODM) (Acer, BenQ – also OBM; Quanta, Asustek, Compal) Suppliers Assemblers

5 5 OEMs: Why outsource? Reduce time-to-market, time-to-volume Lower operating costs, investment, etc. Improve inventory management Access leading technology, etc. Produce on a global scale using parallel production facilities Focus on core competencies Organise supply chain Enhance purchasing power

6 6 Why be an EMS or ODM? Acquire knowledge from OEM... work for other OEMs, with knowledge Achieve economies of scale Facilitate local borrowing No need to worry about market research, distribution, sales and service networks Guaranteed purchase of production run

7 7 Globalization, FDI, education and training receiving FDI exporting products migration (out migration, return migration) Education remittances

8 8 WTO - Information Technology Agreement (ITA) Signed 1996 in Singapore. Most favoured nation (MFN) status now provides for “zero” tariffs on IT products Question: Does the elimination of tariffs lead to increased trade, lower prices and increased employment? ILO and WTO now examining the question of the relationship between trade and employment.

9 9 Employment declines in the United States (half a million jobs, or -30%) and Japan (400,000 jobs or - 20%), but still the largest employers rapid growth in employment include: the Russian Federation, Mexico (for office, accounting and computer equipment) India, Brazil, Republic of Korea, Italy and France (with regard to electrical machinery) Philippines, Thailand, India and Italy (with respect to radios, TVs and telecom equipment)

10 10 Employment

11 11 ISIC 30: Office, accounting and computing equipment

12 12 ISIC 31: Electrical machinery and apparatus

13 13 ISIC 32: Radio, TV and communications equipment

14 14 Exports Leading exportersBillions of dollars Share of world Share in economy EU 25361289 China2261830 United States1251014 Hong Kong, China1098.337 Singapore101844 Japan987.716 Korea, Rep. of836.529 Malaysia604.742 Taiwan, China564.417

15 15 Exports EXPORTERBillions of dollars Share of world Share of economy Mexico37317 Thailand241.922 Philippines241.958 Canada141.14 UAE70.87 Indonesia60.58 Above 15122896.6 World1275100

16 16 Country strategies US and Japan Malaysia, Indonesia China Taiwan, China The Philippines, Thailand Mexico, Costa Rica Rep. of Korea (case study) Export processing zones (EPZs)

17 17 Training needs and skills acquisition Formal education and training limited Companies and workers must continue to invest through lifelong learning. Examples given of IT vendor certification (portable skills). Also wider community efforts and cooperation with school systems (best practice). But, how far down the supply chain?

18 18 Social and labour issues Employment security Restructuring Contract manufacturing, temporary workers “perma-temps” Freedom of association (union recognition) and collective bargaining Safety and health Wages Hours of work

19 19 Industry responses Corporate Social Responsibility (CSR), GRI Global e-Sustainability Initiative (GeSI) & Electronics Industry Code of Conduct (EICC) contents, implementation, monitoring (auditing), inspection? Mobile Phone Initiative (Basel Convention) = e-Waste

20 20 Lifelong learning to remain competitive Lifelong learning is a shared responsibility.... It is an investment, it needs to be attractive and accessible; incentives are essential and the acquired skills need to be certified. It can increase employee adaptability and maintain competitiveness. It is more important to train for long-term competencies than specific skills. Skills development policies and curricula and training programmes need to be developed. Need to develop better comprehension, promote partnership and open novel avenues of cooperation.

21 21 Priority areas for ILO action The ILO should identify and promote best practices on improving working conditions, occupational safety and health as well as lifelong learning. It should encourage enterprises to share information on these issues with each other as well as with their suppliers and contractors.

22 22 Adherence to standards throughout supply chains Long-term relationships between customers and suppliers are challenging in a fast-paced and highly competitive IT industry. In order to embark on long-term relationships, it is paramount that suppliers can rely on a productive and motivated workforce. Therefore, companies are interested in retaining such a workforce and benefiting from the resulting improvements to competitiveness, as are workers who strive to benefit from long-term employment relationships and good working conditions.


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