Globalization of IT Industry Quit What are the locational factors of the IT industry?

Globalization of IT Industry Quit What is the information technology (IT) industry? It is a type of _______-____________ industry. hightechnology Information technology (IT) industry Manufacturing of hardware and equipment (Any examples?) Development of software and related services (Any examples?)

Globalization of IT Industry Quit Processes Inputs Cash Global markets Outputs What are the characteristics of the IT industry? 1 Research and development-intensive Raw materials Power supply Skilled and unskilled labour Technology and R&D Capital Design Manufacturing Assembly Packaging IT equipment products Which two inputs do you think are the most important ones for the IT industry?

Globalization of IT Industry Quit What are the characteristics of the IT industry? Therefore, the IT industry is widely known as a… 1 Research and development-intensive ____________-intensive industry __________-intensive industry _________________________ -intensive industry technology capital research and development

Globalization of IT Industry Quit What are the characteristics of the IT industry? 2 Short life cycle of IT products Only in a few years DevelopmentGrowthMaturityDecline Stage of production Much work on R&D Market grows rapidly Market levels off Market drops rapidly How often do you change your IT products such as mobile phones, PCs, etc.?

Globalization of IT Industry Quit Development Growth Maturity Decline Stage of production Production requirement Location of production Scientists and engineers for ______ Skilled workers Mass production bases: location with ________ labour overseas (in ______ developed countries) What are the characteristics of the IT industry? 3 Multinational and multi-point production (Using an IT firm in the USA as an example) ___________ workers for standardized mass production - Headquarters: in US big city R&D Unskilled more less ____________ and ___________ production Multinationalmulti-point - R&D centres: location with _____________ and _______ labour in home country ( ______ developed countries) professionalsskilled cheap

Globalization of IT Industry Quit What are the characteristics of the IT industry? 4 Concentration in clusters In development / R&D stage What are the advantages for IT firms to form clusters? For example, technology information can flow among firms; and… Silicon Valley in California is one of the most famous IT industrial clusters in the USA attract more professionals to go to the area.

Globalization of IT Industry Quit What are the characteristics of the IT industry? In maturity / production stage What are the advantages for IT manufacturing plants to form clusters? For example, reduce the investment on infrastructure; and… 4 Concentration in clusters efficient use of raw materials and fuels. This cluster pattern is called ____________ _____________. industrial agglomeration

Globalization of IT Industry Quit What are the characteristics of the IT industry? 5 Importance of global markets A lot of money for R&D In order to cover the huge amounts of money spent on R&D…

Globalization of IT Industry Quit What are the characteristics of the IT industry? 5 Importance of global markets ________ markets are needed to maximize the profits. Global Markets of the mobile phone

Globalization of IT Industry Quit University What are the characteristics of the IT industry? 6 An IT industrial landscape This new kind of industrial landscape is called a ________ ________ ________. Located in __________ area Low, modern, dispersed office-plant- laboratory buildings Near to ___________ or research institutes A large pool of scientific and technically skilled labour Venture capital is available suburban universities green field site City centre

Globalization of IT Industry Quit What are the locational factors of the IT industry? In development stage Researchers, scientists and technicians Labour ‧ In ( MDCs / LDCs ) ‧ ( City centre / suburb ) ‧ Near universities or research institutes Site Large amount of __________ capital ‧ Provide financial support for _____ ‧ Encourage innovative culture Market __________ markets Any examples? Others venture R&D Global ______ level High Technology Capital Government policy

Globalization of IT Industry Quit Large amount of __________ capital ______ level In development stage What are the locational factors of the IT industry? In maturity stage Researchers, scientists and technicians Labour Technology ‧ Provide financial support for _____ Government policy Market __________ markets Any examples? Others R&D Global Abundant _______ semi- skilled labour ‧ In ( MDCs / LDCs ) ‧ ( City centre / suburb ) ‧ Near universities or research institutes ‧ In ( MDCs / LDCs ) ‧ _______ land site ‧ Good infrastructure High No need to be of high level venture Large amount of capital to set up factories overseas ‧ Encourage innovative culture ‧ Provide a good infrastructure ‧ Provide good communal services cheap Cheap Capital Site

Globalization of IT Industry Quit What is the world distribution of the IT industry? Where is most IT industrial centres found? USA Europe They are ( MDCs / LDCs ).Why is the IT industry set up there? There are more _____________ and ________ capital. professionalsventure The IT industry here mainly concentrates on _____. R&D

Globalization of IT Industry Quit What is the world distribution of the IT industry? Are there any IT industrial centres in LDCs?Why is the IT industry set up there? There are cheap ______ price and ________ costs. landlabour The IT industry here mainly concentrates on the manufacturing of the ___________. hardware China India Mexico Brazil Malaysia

Globalization of IT Industry Quit Where is the IT industry in the USA? Can you name a famous IT industrial cluster in the USA?Where are these IT clusters mainly found in?They are mainly found in the suburbs of _______ cities. large Why? Silicon Valley

Globalization of IT Industry Quit Where is the IT industry in the USA? Why is the IT industry there? Favourable locational conditions The suburbs of the large cities in the USA have… skilled labour and professionals __________ capital from the big cities attracts a __________ living and working environment a ______ standard of living attracts _____- developed infrastructure _____- developed infrastructure high pleasant well venture

Globalization of IT Industry Quit Innovative culture Good infrastructure and communal services Favourable economic plans Where is the IT industry in the USA? Why is the IT industry there? Helpful government policies The policies carried out by the state governments also help attract the IT firms to come to their states. These policies include: Favourable business climate

Globalization of IT Industry Quit Case study: How did the hard disk drive (HDD) manufacturing industry develop in the USA? Distribution pattern of the HDD industry of the USA ( ) Where was technological development carried out? In ＿＿＿＿＿＿＿. the USA Where were the assembly plants? In ＿＿＿＿＿＿ and ＿＿＿＿＿＿. the USAEurope Why? It was the beginning of the industry, it needed:  ＿＿＿＿＿＿＿＿＿＿＿＿＿＿ for R&D; professionals / scientists  places with ＿＿＿＿＿＿＿ technology; and advanced HDDs were bulky, assembly plants needed to be located near __________ to save transport costs. markets Stage 1:

Globalization of IT Industry Quit Distribution pattern of the HDD industry of the USA ( ) Distribution pattern of the HDD industry of the USA (1980 onwards) Where is technological development carried out? In ＿＿＿＿＿＿＿. the USA Why? ＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿ are needed for R&D. Professionals / Scientists Where are the assembly plants? In ＿＿＿＿＿＿. Asia Why? Case study: How did the hard disk drive (HDD) manufacturing industry develop in the USA? Stage 1: Stage 2: 1980 to present

Globalization of IT Industry Quit Advancements in technology Smaller size of HDDs Better transport results in lower ___________ costs + Lower the locational importance of __________ Better communications  production plants can be set up away from the HQs transport market Market situation Pressure from consumers Keen competi- tion $20,000$15,000$8,000 Attractions of LDCs ________ labour ________ land Favourable government policies + + ___________ the locational pull of LDCs Cheap Increase Stage 2: 1980 to present

Globalization of IT Industry Quit What is globalization? What is the relationship between globalization and the IT industry? It has many meanings. But we can look at it in two major aspects. Countries all over the world have become more inter-related. There is a growing number of multinational firms. The development of the IT industry is very much in line with the development of globalization.

Globalization of IT Industry Quit Foreign market Globalization in marketing IT products target at _________ markets. 1 Export Foreign market Export products directly 2 License Grant a license overseas Home country Produce and sell here Set up a plant overseas Produce here Home country 3 Foreign direct investment (FDI) Sell here Produce and sell here What is the relationship between globalization and the IT industry? global

Globalization of IT Industry Quit Globalization in production What is the relationship between globalization and the IT industry? Home country Overseas HQs and R&D in… Production bases in… (usually in ________ developed countries) less _____________ production Multinational

Globalization of IT Industry Quit

Globalization of IT Industry Quit Laptop Mobile phone iPod PSP Examples of IT hardware and equipment

Globalization of IT Industry Quit SMS Online games e-shopping Examples of IT software and related services Online ticketing