ABSTRACT
This chapter examines the impact of technological change on the process of foreign investment in the Asia Pacific region. It focuses on the changing behaviour of Japanese companies in the region, many of whom have moved away from the hub-spoke structures and Tokyo-oriented operating mentality that have long dominated their behaviour. While a number of 'push factors' account for the expansion of Japanese foreign direct investment (FDI) in the western Pacific Rim — among them domestic economic restructuring and the appreciation of the yen — new and critical 'pull factors' have also been at work. The chapter draws on the experiences of NEC, Hitachi, Fujitsu and Matsushita to highlight the ways in which technology has altered the strategic thrust of Japanese firms in the Asia Pacific region. In constructing networks, Japanese firms look for partners who can contribute high value-added. The chapter deals with an assessment of the policy implications for the economies of the Pacific Rim.
