Competitiveness in the International Electronics Industry - Essay Example

The author Morri tells us that though the electronic industry is fairly small in the Dominican Republic by global standards, it employs however about 10,000 workers and contributes to about 5 percent of total Dominican exports (8). He further states that the electronic industry is by far the most important industry for a small economy (8). But in order to increase the competition in the electronic industry, the manufacturers in the electronic industry must learn to work together with the public sector to increase the competition position of the industry (Morri 9).

The Dominican Republic has to meet the challenges of the public demands in order to ensure their competition in the electronics industry. The number of workers employed tells us how much is going into the export part of the trade. In order to accomplish competitiveness in the electronic industry, certain factors must be adhered to such as the "improvement in the quality and the cost of the electricity supply. Assistance with both local and international supply sourcing issues including possible common import purchasing and horizontal integration for inputs such as fabricated metals and moldings.

In addition, the encouragement of domestic and foreign investment in critical local suppliers in such areas such as sheet metal fabrication, printed circuit boards, transformers, and general electronic component distribution (Morri 9)." In Latin America, there is extensive foreign investment in the sector by companies such as Verizon, Tricom, Centennial and Cable and Wireless and the cost of a T1 which is a high speed internet is the lowest priced in the whole of Latin America (Morri 16). On the other hand, "Guatemala, Honduras and Nicaragua have competitively low labor rates per hour, but they are not currently considered a competitive threat to the Dominican Republic because all three countries lack a secure environment (Morri 24).

" In the above scenario, foreign investment in the Latin American companies makes it possible to guarantee low prices on certain commodities and labor being cheap makes it not a very feasible environment and so lacks the basis for a competitive environment. Another country that is ideal to examine would be the Chinese and Mexican market in relations to the US market. These two countries supply a lot of their goods to the US markets. According to Morri (9), China and Mexico supply a lot of their electronics to the US markets.

In doing so, the global supply chain from the US to Asia threatens competition including low levels of linkages existing between the electronic manufacturers and the lack of industry expertise in the policy making and FDI promotion framework (Morri 10). The US markets are highly dependent on countries such as Mexico and China to provide a steady supply of electronic goods. Another important factor in increasing competition in the electronic industry is to :"create a one-stop-shop to streamline red tape.

Increase image of electronics and the electrical industry locally. Also, employ or train electronic industry experts in policy and FDI promotion. In addition, build electronic industry support infrastructure for industry investors including offering investors full pre-, during- and post investment services and support. It would also help to decrease exit as well as entry barriers to increase investor confidence (Morri