In 1985, further research was carried out to focus on two areas: 1. the relocation of certain industries from other countries, in particular from Japan, to the ASEAN countries; and 2. the environment necessary to speed up the process of transfer. The research studies attempted to identify constraints perceived to be responsible for the slow pace of redeployment and to formulate measures at national, bilateral, and multilateral levels to enhance the process of industrial development in ASEAN.

In this research, industrial restructuring is defined as the process of bringing a country's industrial activities in line with its existing or emerging comparative advantage in order to make more efficient use of its resource and skill endowments. It also involves the manipulation and adjustment of economic parameters such as investment incentives, prices, wage levels, exchange rates, and tariff and non-tariff barriers to trade. Consequently, the country research studies aimed at generating information and recommendations, based on the experiences of various firms, for industrial development in the ASEAN region. A key indicator of successful redeployment of industries to the ASEAN countries based on comparative advantage is the ability of the recipient country to compete in the world market for these types of manufactures, evidenced by a rising share of manufactures in the country's export total.

Background on Selected Industries

The common industry chosen by the research teams from the ASEAN countries for their case studies is the electronics/electrical industry. This industry is chosen because of its significance in the industrial development strategies of the ASEAN nations. It not only accounts for a large segment of industrial investment and employment, but also reflects very significantly the dependence of the ASEAN countries on such investments from Japan and other developed countries. Furthermore, it has been perceived that there are within this industry economic activities in which ASEAN countries have or are gaining comparative advantages. This in turn implies potential opportunities for economic co-operation between ASEAN and Japan.