Research On International Division Of Labor In IT Industry

Information technology has become one of the most important drivers of the world economy and social development, and IT industry gives more and more contributions to the whole world economy. However, the development of global IT industry is lopsided: the developed can control the top because of the core technology, while the developing and new industrialized countries can but be dominated in the international division of labor. What cause this different situation? How to make progress with the technology and meliorate the situation when join the international division? Research on the problems above is of important practical and theoretical significance for the developing countries.International division of labor has greatly changed under the globalization, and many new situations and problems are hard to be explained by the traditional theories of international division of labor. It is thought in this paper that the research of new international division of labor should be implemented under the view of global factors'cooperation which not only concerns with trades and distribution of labor among countries, but concerns with the layout and feature of the global division network, and new division media,form along with the development of industry value chain. The division of labor can lead to a high efficiency according to the important economy idea raised by Smith in"AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS". The enterprise will try to organize the production in a more effective way for more profits and higher productivity, which consequently lead to the progress of producing division of labor and improvement of productive forces of human. The division of labor brings coordinating problems while promotes the productivity. That is to say the division of labor can bring up the transaction cost while generate more efficiency. The principle of international trade and home trade is the same;both of them are the results of compromise between specializing economy and saving transaction cost. The analysis of international division of labor in IT Industry in this paper starts from Smith's classical ideology of division of labor, and it tightly centers on the basic frame about division—efficiency, and combining the theory of transaction cost of the New Institutional Economics. In the analysis of IT Industry among countries, this paper emphasizes that a country's situation in international division of labor lies on its industry's power of competition. At the same time, any country's development of foreign trade will be restricted by its domestic resource, and adequately exerting its comparative advantage is the base for a state to make and maintain its industry's competitive advantage.The research in this paper shows that modularity is the basic character of IT industry production and the basic reason which forms the character of international division of labor in IT industry. In the modularity production mode, the division of labor in international IT industry value chains deepens farther. Under the background of economic globalization, IT Industry adopts the standard and opening production mode widely. Transnational corporations are searching strategic resource all over the world. Cross-border M&A and outsourcing become new forms of the division of labor in IT Industry. At the same time, core technology controls the layout of global division of labor.After obtaining the main considering on the character of international division of labor in IT Industry, this paper discusses the international division of labor in IT Industry among the different countries. By analyzing the development of IT Industry and the status participating in the international division of labor in representative countries and regions such as America, Japan, Taiwan, India, the paper ultimately summarize the principle that a state should follow when participates in international division of labor in IT industry from their experiences and lessons, and put forward practical proposals for China's developing IT Industry and participating in international division of labor. This paper figures out that obeying the internal rules of the IT industry development, finding the comparative advantage of its own factors reasonably as well as choosing the orientation of the industry development is the precondition and foundation;developing high-tech industry cluster and improving the abilities of technical innovation is the core;the government and the market economic institution are the important guarantee.There are two analytical characteristic in the paper: (1) the choice of analytical framework. The analysis in this paper starts from Smith's classical ideology of division of labor, and it tightly centers on the basic frame about division—efficiency, and combining with transaction cost theory of the New Institutional Economics. That is the international division of labor - efficiency– coordination cost framework under the economic globalization.(2) Combination of theory and practice. The paper analyses the efficiency and cost mechanism of international division of labor in IT industry firstly, and then proves it by case analysis. Case analysis and the theory prove each other.The new ideas in this paper are as follows: (1) selecting a new angle of research. Technical characteristics of IT industry promote the modular production mode to form, and the modularity is the basis of the IT industry's international division of labor. The research in the paper start from the efficiency of IT industry modular production and the paper analyses characteristics of the IT industry's international division of labor further, which constitutes a unique angle of research.(2) Putting forward some new points. Firstly, the paper thought that the modular division of labor can bring more efficiency than the classical division of labor. Modularity can promote the formation of Porter's competitive advantage, which is called the modular efficiency as the modular competition efficiency. Secondly, IT industry has its own developing rule. It is an importance principle for any countries to develop IT industry that competitive advantage should be developed under the precondition of respecting the rule of IT industry.