Transcript Sectoral Activities Branch (SECTOR) The Production of Electronic Components for the IT Industries: Changing Labour Force Requirements in a Global Economy (Meeting: 16 – 17

Sectoral Activities Branch (SECTOR)
The Production of Electronic Components
for the IT Industries:
Changing Labour Force Requirements
in a Global Economy
(Meeting: 16 – 17 April 2007)
Paul Bailey: [email protected]
1
Definition of IT sector
•
ISIC 30 (office, accounting and computer
equipment)
•
ISIC 31 (electrical machinery)
•
ISIC 32 (radios, TVs and communication
equipment)
International Standard Industrial Classification
2
IT, telecommunication and
content activities of firms
Telecommunications (goods
and services) including
manufacturing and disposal
Transmission
Networking
Online
including
interactive
IT (goods and
services) including
manufacturing and
disposal
3
Offline multimedia
Information content (film
production, information
services, the media)
The major players
•
Original equipment
manufacturers (OEMs) –
brand name companies
•
(Acer, BenQ – also OBM; Quanta,
Asustek, Compal)
(HP, Dell, Toshiba, Sony, Lenovo,
Apple, etc.)
•
Contract manufacturers,
Electronics manufacturing
services (EMS) providers
(Selectron, Flextronics, Jabil
Circuit, Celestica, Foxconn,
Sanmina-SCI)
4
Original Design
Manufactures (ODM)
•
Suppliers
•
Assemblers
OEMs: Why outsource?
Reduce time-to-market, time-to-volume
• Lower operating costs, investment, etc.
• Improve inventory management
• Access leading technology, etc.
• Produce on a global scale using parallel
production facilities
• Focus on core competencies
• Organise supply chain
• Enhance purchasing power
•
5
Why be an EMS or ODM?
Acquire knowledge from OEM
• ... work for other OEMs, with knowledge
• Achieve economies of scale
• Facilitate local borrowing
• No need to worry about market research,
distribution, sales and service networks
• Guaranteed purchase of production run
•
6
Globalization, FDI, education
and training
7
•
receiving FDI
•
exporting products
•
migration (out migration, return migration)
•
Education
•
remittances
WTO - Information
Technology Agreement (ITA)
8
•
Signed 1996 in Singapore. Most favoured
nation (MFN) status now provides for “zero”
tariffs on IT products
•
Question: Does the elimination of tariffs lead
to increased trade, lower prices and increased
employment?
•
ILO and WTO now examining the question of
the relationship between trade and
employment.
Employment
•
•
•
•
9
declines in the United States (half a million
jobs, or -30%) and Japan (400,000 jobs or 20%), but still the largest employers
rapid growth in employment include: the
Russian Federation, Mexico (for office,
accounting and computer equipment)
India, Brazil, Republic of Korea, Italy and
France (with regard to electrical machinery)
Philippines, Thailand, India and Italy (with
respect to radios, TVs and telecom equipment)
Employment
Chart 3. Global Distribution of Employment in the Electrical and
Electronic Products Manufacturing Industries, 2004 (Percent)
Canada
1%
Brazil
2%
China
35%
China, Taiw an
3%
All other
19%
France
2%
United States
7%
India
2%
United Kingdom
1%
Spain
1%
Russian Fed
5%
Mexico
3%
Korea, Rep
4%
Japan
9%
Source: Estimated by ILO Sector Activities based on data from SECTORSource
10
Italy
2%
Germany
4%
Indonesia
1%
ISIC 30: Office, accounting and
computing equipment
Chart 4a. Employment in ISIC 30: Office, Accounting
and Computing Machinery Manufacturing
(Top 25 countries, thousands)
United States
Japan
Germany
Thailand
Malaysia
Russian
Korea, Republic of
Italy
United Kingdom
Singapore
Mexico
France
Canada
Ireland
Brazil
India
Spain
Philippines
Czech Republic
Netherlands
Hungary
Macedonia
Ukraine
Serbia&Montenegr
Poland
0
50
100
Source: ILO SECTORSource database
11
150
200
250
300
ISIC 31: Electrical machinery and
apparatus
Chart 4b. Employment in ISIC 31: Electrical Machinery
and Appratus Manufacturing
(Top 25 countries, thousands)
Japan
Russian Federation
Germany
United States
Mexico
India
Italy
France
Brazil
Korea, Republic of
United Kingdom
Thailand
Ukraine
Poland
Canada
South Africa
Spain
Hungary
Czech Republic
Malaysia
Indonesia
Romania
Turkey
Iran, Islamic Rep. of
Slovakia
0
200
Source: ILO SECTORSource database
12
400
600
800
ISIC 32: Radio, TV and
communications equipment
Chart 4c. Employment in ISIC 32: Radio, TV,
Communication Equipment and Apparatus
(Top 25 countries, thousands)
Japan
United States
Russian Federation
Korea, Republic of
Malaysia
Germany
Philippines
Mexico
Indonesia
Thailand
France
Italy
India
United Kingdom
Singapore
Hungary
Netherlands
Spain
Finland
Czech Republic
Israel
Ukraine
Canada
Sw eden
Slovakia
0
5
10
Source: ILO SECTORSource database
13
15
20
25
Exports
14
Leading exporters
Billions of
dollars
Share of
world
Share in
economy
EU 25
361
28
9
China
226
18
30
United States
125
10
14
Hong Kong, China
109
8.3
37
Singapore
101
8
44
Japan
98
7.7
16
Korea, Rep. of
83
6.5
29
Malaysia
60
4.7
42
Taiwan, China
56
4.4
17
Exports
15
EXPORTER
Billions of
dollars
Share of
world
Share of
economy
Mexico
37
3
17
Thailand
24
1.9
22
Philippines
24
1.9
58
Canada
14
1.1
4
UAE
7
0.8
7
Indonesia
6
0.5
8
Above 15
1228
96.6
World
1275
100
Country strategies
US and Japan
• Malaysia, Indonesia
• China
• Taiwan, China
• The Philippines, Thailand
• Mexico, Costa Rica
• Rep. of Korea (case study)
•
•
16
Export processing zones (EPZs)
Training needs and skills
acquisition
•
•
•
•
•
17
Formal education and training limited
Companies and workers must continue to
invest through lifelong learning.
Examples given of IT vendor certification
(portable skills).
Also wider community efforts and cooperation
with school systems (best practice).
But, how far down the supply chain?
Social and labour issues
Employment security
• Restructuring
• Contract manufacturing, temporary workers
“perma-temps”
• Freedom of association (union recognition)
and collective bargaining
• Safety and health
• Wages
• Hours of work
•
18
Industry responses
•
Corporate Social Responsibility (CSR), GRI
•
Global e-Sustainability Initiative (GeSI) &
Electronics Industry Code of Conduct (EICC)
•
contents, implementation, monitoring
(auditing), inspection?
•
Mobile Phone Initiative (Basel Convention)
= e-Waste
19
Lifelong learning to remain
competitive
20
•
Lifelong learning is a shared responsibility ... . It is an
investment, it needs to be attractive and accessible;
incentives are essential and the acquired skills need to
be certified. It can increase employee adaptability and
maintain competitiveness.
•
It is more important to train for long-term competencies
than specific skills. Skills development policies and
curricula and training programmes need to be
developed. Need to develop better comprehension,
promote partnership and open novel avenues of
cooperation.
Priority areas for ILO action
21
•
The ILO should identify and promote best
practices on improving working conditions,
occupational safety and health as well as
lifelong learning.
•
It should encourage enterprises to share
information on these issues with each other as
well as with their suppliers and contractors.
Adherence to standards throughout
supply chains
•
•
•
22
Long-term relationships between customers and
suppliers are challenging in a fast-paced and highly
competitive IT industry.
In order to embark on long-term relationships, it is
paramount that suppliers can rely on a productive and
motivated workforce.
Therefore, companies are interested in retaining such a
workforce and benefiting from the resulting
improvements to competitiveness, as are workers who
strive to benefit from long-term employment
relationships and good working conditions.