Introduction

Abstract

Industrial agglomeration, which is now under way not only in East Asia but also in emerging economies such as India and Brazil, is at the centre of global attention. Thanks to agglomeration, these individual economies have been able to achieve economic growth, alleviate poverty and reduce regional gaps such as in income inequality. There is no doubt that global economies have also been enjoying economic growth through the increasing flow of products, funds, human resources and technologies. The interdependency and collaboration among global economies are expected to strengthen even further. In these circumstances, a variety of new structural shifts in these clusters is emerging. Agglomeration in East Asia was originally triggered by FDI (Foreign Direct Investment) by MNCs (multinational corporations), which aimed to establish alternative production bases outside their home economies in order to access relatively cheap natural resources, including unskilled labour, and engage in production related to raw materials and simple parts. The continuation of agglomeration, however, has resulted in upgrade their functions in East Asia and other emerging economies: (1) from being sub-contractors for simple work to producing intermediate goods; (2) from producing intermediate goods to final products; (3) from simple to complex or precision work; and (4) from low-value added to high-value added business activities.