Towards a Knowledge Economy: Firm Competitiveness, Institutional Thickness, Localized Learning and Value Added Supply Chain Networks in Penang, Malaysia

There is a continuing interest in exploring the nature and slgmficance of the operatIOnal dynamics of multi-national firms and their changing global business strategies. The development of competitiveness through innovation, acquisition of new technology, a~d lo~alized .lear~ing has bec~me a critical theme for research as states and regions attempt to carve out vIable mdustnal niches. Ongomg research has shown that success in holding down the global (local embeddedness) and thereby generating self-reproducing growth cannot be reduced to a set of narrow technological or even economic factors. Institutional thickness is important. Significant is the knowledge production and sharing when economic agents work together. Also the idea of whether firm resident knowledge is distinct from knowledge produced in everyday practice by interaction between actors both spatially proximate and non-spatially proximate. Finally and especially critical to developing competitive advantage is the process of creating value added through a supply chain in a global production framework. The overarching goal of the project is to gain a deeper understanding of the ways in which multinational enterprises (MNEs) interact with supplier or sourcing firms and to generalize these behaviors and actions. This is analyzed within the context of the learning and innovative process by examining the supply chain structure and distribution practices of a sample of multi-national enterprises and their supplier firms operating in Penang, Malaysia. The aim is to detail the nature of the growth of new practices associated with supply value chain development and management and show how this varies among firms in the technology sector. Among other factors, corporate core values, ownership strategy, technological sophistication, logistical practices, complexity of actor interaction in the value chain, degree of capitalization, product form and life cycle and especially governance structures will be used as influencing variables in assessing the different ways in which firms interact and learning takes place. Despite the importance of this theme too little research has focused on supply value chains in regards to innovation, creative learning and institutional thickness in local-global relationships. In lieu of hypotheses, the research will be motivated by a series of questions. Among these are the ways in which learning and adaptation are expressed in supply chain structures and logistics. In addition how is tacit versus codified knowledge conveyed among and between MNEs and their supplier firms? Specifically how are issues of information sharing, communication, management and the adoption of new technologies in supply chain management and organization represented and codified? How do differing logistical structures perform in anchoring creative learning toward competitive advantage? The research, which is collaborative with Universiti Sains Malaysia faculty and graduate students, will be carried out in two separate field phases. Data will be gathered from both MNEs and supplier firms through structured and unstructured interviews with supply chain and management personnel in the firms. In addition a web survey will be devised to capture the same information from non-local supplier firms. The results will strengthen our understanding of the organization and learning dimensions of the theory of the firm. It wi II also aid in deepening our understanding of regional production networks, specifically examining relations between MNEs and supplier firms in order to enhance conceptual frameworks which aim to understand the economic development prospects of regions, especially in Southeast Asia. Further it will show how MNEs network with and transfer new knowledge/information (both tacit and explicit) to SMEs in the technology sector of peripheral regions. Finally the research will add to our understanding of the learning process, ubiquification of technology, and how the dynamics of governance structures fit into and aid the capabilit