Recent developments

At its 293rd session (June 2005) the Governing Body of the ILO decided that a Tripartite Meeting on the Production of Electronic Components for the IT Industries: Changing Labour Force Requirements in a Global Economy would be held in Geneva from 16 to 18 April 2007. The meeting developed a number of points for discussion on the basis of a background report looking at the shift in production of IT components between industrialized, developing and emerging economies; changing skill requirements; gender; age distribution; conditions of work; labour management relations; and production in industrial zones.

Since 1996, exports of ICT goods have doubled and have grown at a faster pace than merchandise exports. Between 1996 and 2003 merchandise exports increased by 60 per cent, while ICT goods exports increased by 100 per cent. In 2003, exports of ICT goods exceeded $ 1.1 trillion, accounting for 15 per cent of world merchandise exports. The value of international trade in ICT goods thus exceeded the combined value of international trade in agriculture, textiles and clothing.

Major exporters

Trade in ICT goods continues to be highly concentrated: the top ten exporters alone accounted for 72 per cent of global ICT exports. Concentration is even higher in developing countries: the top ten developing country exporters account for over 98 per cent of all developing countries' exports.

Many chips, semi-conductors, cell phones, flat screen TVs, CD players, i-pods, flash memory cards, etc., are made in Asia, or at least the basic components. For example, electronics accounted for 70% of Philippine merchandise exports (of which 70% were semi-conductors). Recent UNCTAD statistics show that almost 50% of all electronic exports are from developing countries, and all are Asian except for Mexico (the world's leading exporter of TVs).

While the USA and Japan were still major exporters in 2003, China had already been catapulted into second place with a growth rate of 55%, and was the world's number one exporter of electronic goods by 2004. The major developing country exporters include: China, Hong Kong (China), Singapore, Rep. of Korea, Taiwan (China), Malaysia, Mexico, the Philippines, Thailand and Indonesia. European players include: Germany, Netherlands, UK, France, Ireland, Italy, Belgium, Hungary, Finland, Sweden, Spain and Austria, which altogether account for a quarter of world exports.

Industry shifts

Recently there has been a minor industrial revolution as Asian suppliers, or contract manufacturers, have been buying up the brand-name companies they had previously supplied. These include: Lenovo Group (China) buying IBM's PC Division (Dec. 2004); BenQ (Taiwan) taking Siemens' Mobile Phone Unit (Nov. 2005); T.P.V. (Taiwan) purchasing Philips computer monitor & entry-level flat TV screen unit (Dec. 2004); Videocon (India) taking Thomson TV tubes unit (Oct. 2005) and TCL Int. Holding (China) buying Thomson TV (Dec. 2003). In the mean time, both BenQ and TCL have reversed their decisions.

Another industry characteristic has been the rapid rise of large contract manufacturers such as Solectron, Flextronics, Jabil Circuit and Celestica, etc. Little known to the general public, these companies supply components and finished products to established companies like Ericsson, IBM, HP, Philips and Alcatel. Contract manufacturers have grown rapidly in size. A large part of their growth was achieved by taking over established production facilities from existing enterprises. At the same time many of the larger electronics companies have been shedding employment.

The content of industry is also rapidly changing with cathode ray tubes (CRTs) gradually disappearing and plasma screens and liquid crystal display units (LCDs) eventually taking over. What implications, if any, will this have for the workforce? Many chips today can carry more data then most hard drives, and chips may in fact replace them. HP is entering the market for photographs and will provide a direct challenge to Kodak and Fuji. Questions can always be asked about the consequences of what is happening for employers and workers. In other cases, governments (such as the Rep. of Korea) strongly influence industrial development in electronics by providing massive infrastructure development.

Companies are also redefining themselves, eg Philips wants to dump mature products like TVs and concentrate more on medical imaging devices. Most cell phones make and send video clips, download TV programmes, take pictures and send and receive e-mails in addition to making phone calls.

The report provides a snapshot of the industry to show who makes what, when and where.

Definition of the IT or ICT industry

The OECD ICT industry definition is both a "manufacturing" and "service" sector one, following ISIC Rev 3.1 (2002):

ISIC 293, domestic appliances, may have to be included as there are plans to use cell phones to turn on dishwashers, laundry machines and stoves. In the future, clothing items would even have solar panels sewn in to permit cell phones to recharge while walking, or have pockets for cell phones and ear phones built into them. Telecommunications and entertainment providers also have a large influence on the type of equipment produced and according to which standards.

The SECTORSource database

Various resolutions and conclusions of sectoral meetings have requested databases, beginning with the metal trades industries. The SECTORSource database is a new tool, initiated from the savings realized from having a smaller and shorter automobile meeting in 2005. Pilot versions were presented during the auto parts meeting (January 2005) and at the post-MFA meeting (October 2005). It includes six existing databases (ILO's Labosta, UNIDO, OECD, Eurostat, UNCTAD, WTO) and industry associations where they exist, in one easy-to-access database. Industries covered include: food, beverages and tobacco (ISIC 15-16); textiles, clothing and footwear (ISIC 17-19); basic metals (eg iron and steel, ISIC 27-28); mechanical and electrical engineering (ISIC 29-33) and transport equipment manufacturing (ISIC 34-35) (see Working Paper 250, data supplement on the production of electronic components). The user will be able to search by country, industry or category (employment, compensation, hours of work, exports, imports, etc.) A graph-making capability allows countries to be listed in rank order.

The International Trade Centre (ITC) database will also be used to look into specific products, by country. This shows for example that Mexico is still the number one exporter of TVs, but China is catching up. Korea and Turkey are also important. All of this will have ramifications for the workforce and where it will be located.