The Japanisation of Silicon Glen : implications for spin-off and supplier linkages

McCalman, James (1991) The Japanisation of Silicon Glen : implications for spin-off and supplier linkages. Quarterly Economic Commentary, 17 (1). pp. 56-63. ISSN 0306-7866

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The incidence of management buy-outs, subsidiary spin-offs and the level of local supplier linkages in the Scottish electronics industry has always been both a cause for concern and a source of great disappointment. For too many years now the cry of wasted opportunity has been heard amongst analysts of the Silicon Glen phenomenon as the industry itself has spectacularly failed in its attempt to become Scottish in an ownership sense. The December 1990 issue of this commentary notes that in the electronics industry in Scotland, "...the actual record of MBOs in this sector is disappointing, with only two of any note in the last couple of years."(l) One of these was subsequently sold to a Korean company. The evidence suggests that the nature of the industry itself has prevented the development of a more prominent indigenous representation and that the large American domination has had a negative influence in generating start-ups, developing the immediate local supplier infrastructure or leading to a significant growth in management buy-outs. The paper is divided into four sections. The first analyses the differences in approach between American and Japanese high technology firms. Second, the organisational issues for management and workforce are discussed. Third, there is an analysis of the likely implications for the generation of new start-ups. Finally, there is a commentary on the indigenous industry's capability to deal with opportunities that come its way and circumstances which might assist this process.