Factoryless Goods Producing Firms

摘要

The global economy is undergoing a series of rapid, connected transformations that are changing the way products are produced and sold. International trade in goods has surged, with the ratio of trade to GDP increasing for almost all country pairs. This increase in trade has been accompanied by the rise of global value networks and the relocation of production activities across national borders. At the same time, there has been renewed interest in the fragmentation of production activities across the boundaries of the firm and its links to the increases in trade and offshoring of production. The different activities of the value chain for a product can be performed by one or more establishments of a single firm, or can involve many different firms. In both cases, the activities can be performed in different locations within and across country borders. In this paper, we consider an extreme form of the fragmentation of production activities where the firm does not conduct manufacturing activities but nonetheless is heavily involved in activities related to the production of goods. Our focus is on firms in the wholesale sector. Traditional wholesalers are primarily, or exclusively, involved in intermediating goods between producers and retailers/consumers. Factoryless goods producing firms (FGPFs), in contrast, design the goods they sell and coordinate the production activities, either at the establishment itself or through the purchase of contract manufacturing services. In other words, FGPFs are manufacturing-like as they perform many of the tasks and activities found in manufacturing firms. There are many ways to classify the activities or tasks needed to take a product from an initial concept through production until its delivery to the final customer. Pre-production activities can include development of the initial idea or conceptualization, R&D, product design, and engineering as well as development of specifications for production. Production itself involves transformation and assembly of inputs and coordination of the various production stages. Post-production tasks might cover the determination of prices and quantities, marketing and branding, logistics, and the ultimate sale of the good to final customers. Traditionally, these activities were undertaken by the same firm in one location. Today, firms may perform different parts of each production stage in different domestic and foreign locations. When the activities are separated in space, firms can also decide whether they should outsource them to others. We define a FGPF as a firm that has no manufacturing establishments in the United States, but performs pre-production activities such as design and engineering itself and is involved in production activities, either directly or through purchases of contract manufacturing services (CMS). FGPFs are present in industries from beer brewing to semiconductors. Perhaps the canonical example of a factoryless goods producer is the British appliance firm, Dyson, best known for its innovative vacuum cleaners. The firm initially designed, engineered, and produced vacuum cleaners in Wiltshire, England but subsequently chose to offshore and outsource all the production to Malaysia while leaving several hundred research and other employees in the United Kingdom. Dyson's more recent innovations in product lines such as hand dryers and fans have never been produced in the United Kingdom or by Dyson itself. The best-known example of a factoryless goods producer is Apple Inc. Apple designs, engineers, develops, and sells consumer electronics, software, and computers. For the vast majority of its products, including iPhones, iPads, and MacBooks, Apple does none of the production and the actual manufacturing is performed by other firms in China and elsewhere. While Apple is known for its goods and services and closely controls all aspects of a product, almost none of Apple's US establishments would be in the manufacturing sector. The semiconductor industry is well-known to have factoryless goods producers in the form of "fabless" firms.Mindspeed Technologies, a fabless semiconductor manufacturer in Newport Beach, CA "designs, develops, and sells semiconductor solutions for communications applications in wireline and wireless network infrastructure equipment." Mindspeed outsources all semiconductor manufacturing to other merchant foundries, such as TSMC, Samsung, and others. Mindspeed's establishments would not be in the manufacturing sector. Dyson and Apple started with production facilities inside the firm in the home country and subsequently shed their production lines and outsourced and offshored production. In addition, they retained or expanded other activities including research and development, design, engineering, marketing, and distribution. These examples raise several important questions about FGPFs, their origins, and their relationship to the off shoring of production. Are today's FGPFs more likely to have been involved in manufacturing in the past? Do FGPFs perform a wider range of activities than non-FGPFs? Are they larger firms? Are FGPFs more likely to be importers and do they import a greater share of final sales? We look at import activities of FGPFs and at the importance of manufacturing in the past activities of today's FGPFs. To date there is very little systematic evidence on the extent of these types of firms. In this paper, we use data from the US Census of Wholesale Trade in 2007 to systematically document features of factoryless goods producing firms in the wholesale sector in the United States. There are several reasons why distinguishing FGPFs from traditional wholesale establishments may be important for economic welfare or policy. First, the mere existence of the FGPFs highlights a new type of production function in the global economy involving extreme fragmentation of tasks. Second, the types of workers, and as a result jobs and wages, employed by FGPFs likely differ significantly from those at traditional wholesalers. Third, the relative importance of R&D and innovation is likely more important at FGPFs. These potential differences between FGPFs and traditional wholesalers introduce the possibility of very different wage, employment, and productivity dynamics if factoryless goods production grows as a fraction of aggregate activity. Our research is related to a broader set of questions that asks how production, innovation, knowledge, and productivity are related. One perspective is that without production activities located nearby, in the long run a firm cannot continue to generate new ideas, improve product quality, innovate its designs, and raise productive efficiency. The counterpoint suggests that the advent of dramatic improvements in telecommunication technology, the rise of the Internet, and the reduction of transportation and trade costs have combined to allow firms to separate their activities geographically and potentially locate them outside the firm. This perspective suggests firms will thrive if they can take advantage of comparative advantage and relative cost differences in the performance of the tasks involved in the creation, production, distribution, and marketing of a product. Co-location of these tasks may not be necessary and might be more costly.