May 12, 2016—A report drafted by Nathan Associates concludes that the rapid pace of innovation in the semiconductor industry—benefiting companies, consumers, and countries alike—can be tied to participation in the global value chain.
The report, Beyond Borders: How an Interconnected Industry Promotes Innovation and Growth, explores the economic forces behind the evolution of that global value chain and the risks of attempting to reproduce that value chain within a single country. The report was prepared for the Semiconductor Industry Association.
"As the history of the past 50 years along with economic fundamentals demonstrate, innovation accelerates and is profitable when the industries within each country specialize in tasks they can best perform, and in which participants collaborate across the entire value chain, share knowledge, and exploit each other’s relative advantages," the report found. "This is different from most other less complex industries where simply adding productive capacity or implementing protectionist measures may be enough to enable an emerging industry to be competitive."
The report finds that "development and adoption of global standards would facilitate the efficient functioning of the global value chain" and "governments can create policies that facilitate integration into global value chains."
Among the policies are ones that remove barriers to trade, "establish a transparent and predictable investment environment, and ensure sound legal systems and intellectual property protection."