The Internet as a Global Production Reorganizer: The Old Industry in the New Economy

Gunnar Eliasson ()
Additional contact information
Gunnar Eliasson: The Royal Institute of Technology (KTH)

A chapter in Long Term Economic Development, 2013, pp 243-271 from Springer

Abstract: Abstract Globalization of production is breaking up the 200 year industrial knowledge monopoly and backbone of the wealthy Western economies; their engineering industries. Development is moved by a distributed manufacturing technology made possible by the integration of computing and communications (C&C). Previously internal value chains, now distributed over global markets of specialized subcontractors, have made smaller scale production relatively more profitable. As engineering firms are embracing the new technologies to take them into the New Economy, they are destroying the business platforms for laggard incumbent firms. As volume based strategies of the old actors clash in markets with new innovative producers, the dynamic and complex decision environment that characterizes an Experimentally Organized Economy (EOE) raises the business failure rate. The complexity of the situation makes the capturing of the new opportunities genuinely experimental and dependent on entrepreneurial capacities that are not universally available among the industrial economies. While some developing economies are successfully adopting the new technologies, entering onto faster growth paths, mature industrial economies experience difficulties of reorganizing for the same task. Some suffer more from the new competition than they benefit from the new opportunities. For the foreseeable future, however, engineering will continue to serve as the backbone of the rich industrial economies.

Keywords: Industrial Revolution; Engineering Industry; Industrial Economy; Business System; Enterprise Resource Planning (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:eccchp:978-3-642-35125-9_11

Ordering information: This item can be ordered from
http://www.springer.com/9783642351259

DOI: 10.1007/978-3-642-35125-9_11

Access Statistics for this chapter

More chapters in Economic Complexity and Evolution from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().