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Pisano's recent ICC article offers some clarity around the pursuit and development of new capabilities, but it overreaches by equating this with dynamic capabilities as a whole. The capabilities that he discusses are, for the most part, simply technologies that can be thought of as "ordinary capabilities". Moreover, his approach isolates capability selection from strategy. Opportunities must be sensed and calibrated and a strategy developed before capability gaps can be identified. Pisano also treats general-purpose capabilities as an option without acknowledging their dependence on the stage of the industry lifecycle. In mature industries, general-purpose technologies are less likely to be relevant. While there is much of value in Pisano's article about technology selection and risk, this is overshadowed by the claims he makes for the magnitude of the article's contribution to dynamic capabilities research.

The supply chains of the mobile phone industry span national and firm boundaries. To analyze how value is distributed among the participants, a framework based on theories of firm strategy is applied, and a novel methodology is used to measure value capture in three phone models introduced from 2004 to 2008. The research shows that carriers capture the greatest value (in terms of gross profit) from each handset, followed closely by handset makers, with suppliers a distant third. However, the situation is reversed in terms of operating profit. Carriers shoulder the burden of network installation, maintenance, and upgrading, which absorbs much of the value from their subscription fees. Handset maker nationality, which may also influence supplier choice, is a key determinant of the geographic distribution of value capture. The results are also used to estimate the relationship of handset subsidies to carrier profits, which has been an issue of concern for antitrust authorities in several countries. The analysis shows how the framework can be used to calculate how much service charges might be inflated to cover the subsidies. © 2011 Elsevier Ltd. All rights reserved.

Global value chains span national and organizational boundaries in a growing number of industries. Knowledge creation and exchange within these diffuse networks is more complex than in the centralized R&D process of the past.This research, based on extensive fieldwork with engineers and managers in multinational headquarters and subsidiaries in a number of high-tech industries, analyzes alternative modes of managing knowledge workers in this global setting. Strategic human resource management (SHRM), of which formal HR policies are but a small part, is necessary to structure formal and informal network activities, both within and beyond the firm.We compare two archetypal high-performance SHRM systems and describe how they have evolved in practice. We analyze SHRM for global knowledge flows with offshore subsidiaries, value chain partners, allies, acquisitions, and corporate ventures. We also look at knowledge flows in informal personal networks and via the global circulation of knowledge workers. Finally we review lessons learned about SHRM practices to create and manage knowledge workers in global value chains.

Semiconductor design is a frequently-cited example of the new wave of offshoring and foreign-outsourcing of service sector jobs. It is certainly a concern to U.S. design engineers themselves.In addition to the current wave of white-collar outsourcing, the industry also has a rich experience with offshoring of manufacturing activity. Semiconductor companies were among the first to invest in offshore facilities to manufacture goods for imports back to the U.S. A brief review of these earlier manufacturing experiences and their impact on the fortunes of the domestic industry and its workers can help to illuminate the current debates over offshoring in services.Because meaningful data about the impact of the offshoring of chip design (and even manufacturing) are limited, we rely on a more qualitative analysis for our key points. We have conducted dozens of interviews with engineers and managers at numerous semiconductor and related companies in the United States, Asia, and Europe over the past six years. Our research also incorporates the rich store of publicly available information in trade journals and company reports.This paper describes the two previous stages of offshoring semiconductor assembly jobs and of outsourcing semiconductor manufacturing and the impact they had on the U.S. semiconductor industry. We argue that the initial concern about losing domestic jobs in both stages turned out to be unfounded as the industry used the situation to its competitive advantage by becoming cost competitive (assembly stage) and by developing the fabless sector (manufacturing stage). We then analyze the on-going stage of offshoring design jobs, and compare this stage to the two that came before in order to explore the possible impact on domestic jobs and the U.S. semiconductor industry. We begin in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two looks at the offshoring of assembly jobs, and section three analyzes the foreign outsourcing of manufacturing. Section four explores the offshoring of design jobs, and concludes with a discussion of what this means for the U.S.

Semiconductor design is a frequently-cited example of the new wave of offshoring and foreign-outsourcing of service sector jobs. It is certainly a concern to U.S. design engineers themselves. In addition to the current wave of white-collar outsourcing, the industry also has a rich experience with offshoring of manufacturing activity. Semiconductor companies were among the first to invest in offshore facilities to manufacture goods for imports back to the U.S. A brief review of these earlier manufacturing experiences and their impact on the fortunes of the domestic industry and its workers can help to illuminate the current debates over offshoring in services. Because meaningful data about the impact of the offshoring of chip design (and even manufacturing) are limited, we rely on a more qualitative analysis for our key points. We have conducted dozens of interviews with engineers and managers at numerous semiconductor and related companies in the United States, Asia, and Europe over the past six years. Our research also incorporates the rich store of publicly available information in trade journals and company reports. This paper describes the two previous stages of offshoring semiconductor assembly jobs and of outsourcing semiconductor manufacturing and the impact they had on the U.S. semiconductor industry. We argue that the initial concern about losing domestic jobs in both stages turned out to be unfounded as the industry used the situation to its competitive advantage by becoming cost competitive (assembly stage) and by developing the fabless sector (manufacturing stage). We then analyze the on-going stage of offshoring design jobs, and compare this stage to the two that came before in order to explore the possible impact on domestic jobs and the U.S. semiconductor industry. We begin in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two looks at the offshoring of assembly jobs, and section three analyzes the foreign outsourcing of manufacturing. Section four explores the offshoring of design jobs, and concludes with a discussion of what this means for the U.S.

The separate vertical product segments of the electronics industry are converging into a Net World Order of multifunctional product categories. We lay out a stylized value chain for analyzing firm performance in the various horizontal segments of the Net World Order. We measure firm performance with ROI data for the 1990s, and find that high-performing companies can emerge in any segment. We then turn our attention to the future and sketch the key elements of value creation and capture in the emerging Net World Order marketplace. Alliances and customer relationships are increasingly important, while standards ownership and vertical integration are less important than in the PC era.