Globalization of production: Insights from the hard disk drive industry

Rapid change in the geographical location of production raises important qu estions regarding the welfare, development potential, and competitive posit ion of different countries and regions. This paper explores in detail the g eography of economic activity in a specific industry, the hard disk drive ( HDD) component of the computer industry. Firms in the HDD industry are brea king the production system into ever smaller distinct steps, and spreading the physical location of these steps around the world. Firms from the Unite d States dominate the industry. Our findings suggest that globalization has enabled US firms to sustain their dominant position in the industry, prese rve employment in the United States (and possibly expand it), and increase employment worldwide, most notably in Southeast Asia. (C) 2000 Elsevier Sci ence Ltd. All rights reserved.