36. According to MIDA, at the end 1990 the total number of approved companies in electronics was 420, distributed among the three sub-sectors as following: 81 in consumer goods, 85 in industrial goods and 254 in electronic parts (Cfr. Cheah, 1991).

37. In 1990, the share of Japan on the total amount of FDI in electrical and electronics industry (Japan FDI E&E / FDI E&EInd) was 54.2%.

38. In 1990, the share of electrical and electronics industry on the total amount of Japanese FDI was 50.5%.

39. See section 1. The proposed sub-industry classification is: 1) Electrical and Electronics equipment; 2) Computer; 3) Telecommunication; 4) Microelectronics; 5) Electronic components.

40. See section 1.

41. With regard to this point, we can learn from the different experience of industrial policy of South Korea and Taiwan in contrast to that of India and Brazil. The Asian countries started with an EE strategy, which eventually allowed them to benefit from export earnings and than gradually reach technological autonomy. On the contrary, moved from a desire of independence, India and Brazil started with an IS strategy, aiming to first obtain technological autonomy and lately to gain from export earnings through EE. However, due to the fast speed of technological change, India and Brazil were afflicted by the problem of technical obsolescence which prevented them from achieving the levels of international competition and eventually reaching the EE phase.

42. The concept of capacity for absorbing investment is referred not only to capital equipment and production plants, but also to human resources (availability of skilled labor) capable to absorb technologies from abroad.

43. From our interviews conducted in Malaysia, it emerged that at this stage, the problem of technological dependence from FDI lies more on the absorbing capability of local firms than on the transferring will of the foreign ones. In particular, this is due to a lack of entrepreneurs and skilled labor in electronics.

44. In particular, flows of imports from more advanced countries.

45. Remember from section 4 that, according to the system of investment incentives, products are usually re-imported from Singapore to Malaysia.

46. Electronics holds a share of around 30% both of production and employment and more than 50% of exports on the whole Malaysian manufacturing sector.

47. To this regard, it is our impression that the NEP (New Economic Policy, 1970-1990), by discriminating non-Bumiputera entrepreneurs, may have created a certain “discouraging effect” on the flourishing of local SMEs. For further discussion see: a) FONG Chan Onn “Small and Medium Industries in Malaysia: Economic Efficiency and Entrepreneurship” The Developing Economies Vol.XXVIII N.2, June 1990; b) ONOZAWA Jun “Restructuring of Unemployment Patterns under the New Economic Policy” The Developing Economies - Vol. XXIX N.4 - pp.314-329, December 1991.

48. The main entry-barriers are: R&D investments, technology skills and know-how, quality standards, economies of scale, availability of skilled labor. See section 2.

49. This is a process already experienced by Taiwanese and South Korean firms.

50. See section 2. For instance: precision machinery, metal and plastic working industries