NICs

NICs

• First Phase
• Countries that have rapidly increased their industry since the 1960s. TNCs looked for areas where labour and other costs were lower. EG east Asia. Case study of the Asian Tigers.
• Advantages for these developed countries/ TNCs
• included------>
• A reasonably high level of infrastructure such as roads
• relatively high level of educated people and skill set
• good geographical location
• government initiatives
• less rigid laws and reduced tax rates

Second phase

• As the economies of these NICs grew, wage levels and the cost of operating within those countries began to increase. As a result Japanese, US and European TNCs looked for second generation of countries that could support their operations.
• At the same time the original NICs were developing and growing. With Chaebols in South Korea also begin to move manufacturing tasks to neighbouring countries such as Malaysia

Third Phase

• In recent years both China and India have emerged as targets for FDI by TNCs. Both countries have shown rapid and sustained growth.
• China and India case studies