ABSTRACT

This paper addresses an increasingly prominent phenomenon in the world economy: the coincidence of cooperation and competition among major private actors in the same sector at the same time. Sometimes referred to as the ‘New Competition’ (Best 1990), this duality reflects an ongoing redefinition of the competitive order in certain global industries such as pharmaceuticals, semiconductors and automobiles. In these industries, large firms have been making cooperative arrangements for research, production and marketing while at the same time competing against one another in world markets. In this paper, I explore how such redefining occurs by investigating the international politics of industrial restructuring. My main argument concerns the governing of competition in global industries through the use of networks, especially transnational strategic alliances among multinational corporations (MNCs). The logic of this argument is straightforward: if networks are a distinct form of economic governance, and international strategic alliances are an important form of network organisation, then the growth in these alliances over the last couple of decades constitutes an increasingly important source of governance in the global political economy. Networks have by no means replaced other organisational forms, but their growth in prominence has been consequential for the character of competition. As such, business scholars such as John Dunning have referred to this current era of industrial restructuring as ‘alliance capitalism’. In the semiconductor industry, the central industry case study of this paper, such alliances have been increasingly prevalent and consequential.