1993 volume 25(1) pages 27 – 46

Cite as:
Kim W B, 1993, "Industrial restructuring and regional adjustment in Asian NIEs" Environment and Planning A 25(1) 27 – 46

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Industrial restructuring and regional adjustment in Asian NIEs

W B Kim

Received 18 September 1991; in revised form 10 January 1992

Abstract. The Asian newly industrializing economies (NIEs) are currently experiencing a shortage of unskilled labor, which makes it difficult for them to remain competitive in low- technology, labor-intensive industries. They are also under pressure from the industrialized economies to open up domestic markets and to readjust the value of their currencies. The lower cost economies of Southeast Asia and China are rapidly catching up with these NIEs in manufactured products, posing challenges for the NIEs to readjust their export strategy. Because of their heavy reliance on exports, the NIEs are vulnerable to exogenous shocks such as price and exchange-rate fluctuations. All these pressures require difficult structural adjustment of industries in the NIEs. Against this backdrop, this author surveys the process of industrial restructuring and its aggregate consequences in the NIEs. Also discussed are macro-level adjustment strategies including offshore investment, upgrading the technological level of industries, expanding the hinterland, and labor importation. More specific questions concerned with labor market and employment are addressed, given the trend of enterprises' adopting a more flexible labor strategy. Finally, the need to look into local variations in enterprise adjustment strategy is discussed, in particular, with a focus on the local context.

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