Latecomer Catch-up Strategies in Electronics: Samsung of Korea and ACER of Taiwan

Very little is known about the strategies by which East Asian firms acquired foreign technology and managed to ‘catch up’ in electronics. Unlike Western and Japanese innovation ‘leaders’ and ‘followers’, East Asian firms are ‘latecomers’, dislocated from advanced markets, demanding buyers and international sources of technology. This work examines the cases of two leading latecomers - Samsung Electronics of Korea and ACER of Taiwan - to generate insights into how electronics manufacturers overcame barriers to entry and became strong competitors on the world stage. The aim is to highlight the sources, paths and mechanisms of learning in the two firms, relating these patterns to corporate strategy, organization and performance. This contribution argues that latecomers reversed the traditional research and development centred pattern of innovation, travelling backwards along the product life cycle, from mature to early stages. A simple model is put forward to show how latecomer firms progressed up the technological ladder within the electronics subcontract system called original equipment manufacture. Attention is also drawn to theoretical implications and the strengths, remaining weaknesses and future challenges facing latecomer firms.