An earlier Foundation-supported project studying globalization of the semiconductor industry focused on new strategies and approaches of companies in the industry to organize their R&D efforts across the globe. Emphasis was placed on what was happening in China, where there has been a recent surge in the number of semiconductor companies starting up operations. This large number, estimated at more than 600, of new semiconductor enterprises is a new and different pattern from earlier international competition in the industry. These new startup companies are likely to lead the way forward for the Chinese industry. The current grant will focus on the emergence of this large number of semiconductor design firms in China. The project will use results of the prior research on Chinese design firms and data from the National Bureau of Statistics in China. It will benefit from contacts established during the first grant period. The aim is to determine the size, growth rate, and profitability of this part of the industry, and to understand better the business models and strategies being adopted by these firms. Relationships of these newer firms with the large State-owned semiconductor enterprises and with multinational corporations will also be explored. Project Director: Henry Chesbrough, Adjunct Professor and Executive Director, Center for Open Innovation, Institute of Management, Innovation & Organization, Haas School of Business.

This grant supports a one-year project aimed at understanding where value is captured in the manufacture and use of Apple Computer's innovative and immensely successful iPod product family, with its closely integrated iTunes software and iTunes music store. The manufacture and even some of the development of the i-Pod are done in China; 50% of the device's value is in the Japanese-supplied hard disk, and some value resides in the Korean-supplied memory chips and audio decoder. Yet the intellectual property and many high salary jobs in software, R&D, and supply chain management are in the U.S. The project will develop metrics to measure where value is captured by country and firm and will analyze recent trends in where this value is added. Project Director: Kenneth L. Kraemer, Professor, Information Systems, School of Business.

Old-line manufacturing industries have been undergoing dramatic restructuring. Supply chains, once located primarily in high-wage and developed countries, are now dispersed across the globe, with significant roles being played by increasingly skilled suppliers in low-wage countries. This grant supports a project to examine the consequences of this transformation for the competitiveness and survival of U.S. and European component manufacturers, i.e., the mostly small to midsize companies that produce metal and plastic parts for durable manufacturing industries, such as motor vehicle, construction machine, agricultural and electrical equipment, home appliance, and industrial machinery producers. U.S. component manufacturers face competition not only from new producers in low-wage countries like the Czech Republic, Mexico, and China, but also from sophisticated European producers. The project team, made up of political scientists and researchers in public policy, sociology, and economics, will build on past work by industry studies researchers. Geographic patterns of supply chains in component industry markets and the performance, strategies, and organization of component manufacturers in the U.S. and key European countries will be explored. Among the questions to be studied is whether there are systematic and characteristic differences in how American and European producers develop policies for and engage in outsourcing and offshoring. In-depth interviews with managers in component suppliers, large customer firms, as well as with officials in relevant trade associations and regional and local governments will be featured, along with quantitative statistical analysis of trade and commodity flows. Project Director: Professor Gary Herrigel, Department of Political Science.

To produce a more accurate comparison of the production of engineers and corporate hiring practices in China, India, and the United States. Project Director: Professor Gary Gereffi, Department of Sociology.

To write a book analyzing and comparing how advanced technology production is developing within India and China. Project Director: Ernest H. Preeg, Senior Fellow in Trade and Productivity.

To study the movement of creative and managerial jobs in the global advertising industry. Project Director: Professor Peter J. Taylor, Department of Geography.

To partially support a conference on the globalization of the biopharmaceutical industry, mostly funded by industry, and involving Industry Center faculty, industry studies affiliates, and other economists. Project Director: Iain M. Cockburn, Research Associate.

To partially support a conference on industrial innovation in China. Project Director: Garrick Utley, President, Neil D. Levin Graduate Institute of International Relations and Commerce.

To study globalization in the forest industry. Project Director: Roger A. Sedjo, Senior Fellow, Energy and Natural Resources Division.

Support for an introductory assessment of higher education institutions in India as compared to the United States. Project Director: Rafiq K. Dossani, Senior Research Fellow, Institute for International Studies.

Support to study software offshoring models. Project Director: Professor Stephen Hawk, School of Business & Technology.

To conduct two conferences in Washington, D.C. to explore new ideas about global trade. Project Director: Kent H. Hughes, Director, Program on Science, Technology, America and the Global Economy.