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Chia Lin Sien, Fellow Institute of Southeast Asian Studies,
Lloyd C. Onyirimba, Centre for Information Technology Systems and Strategy (CITSS),
George S. Akpan, Research Scholar/Graduate Fellow National University of Singapore, Singapore
Over the past half-century, the Asian developing economies have undergone several shifts in business orientation – from import substitution to mass production of standardized products for restricted markets to more flexible production of differentiated products for much more diversified, and freer, global markets. Globalization can be seen as enhanced functional integration among internationally dispersed economic activities Wrigley, Wagenaar, and Clarke (1994; Thomas 1996). Globalization also takes the form of increasing networking of national economies involving consumers, suppliers, and markets. This is the result of multinational corporations operating on a world-wide scale taking advantage of the new international division of labor, in which the production process is spread over several countries to achieve economies from different types of labor and resource inputs Kini (1995).
All these international activities occur within a framework of enhanced technology that generates significant productivity gains while the traditional economy of traders is giving way to a world economy of international producers. In turn, globalization results in greater complexity of international trade as raw materials, parts, and products are shipped among multinational corporations' plants in different countries. Improvements in transport technology, particularly the bulking of goods and the introduction of containerization and intermodalism, further support the growth of this spatial division of labor by reducing the real cost of transport and improving the reliability of the logistics chain Wrigley, Wagenaar, and Clarke (1994).
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