Policy wonks would do well to read an interesting analysis in the International Monetary Fund’s (IMF’s) new World Economic Outlook which throws light on a new tech production system based on smartphones rather than personal computers.
IMF says smartphones accounted for a sixth of global trade growth in 2017. The supply chain is interesting. China ships most gizmos; South Korea, Malaysia, Singapore and Taiwan top component production; and Ireland captures the intangible value since Apple’s intellectual property is housed there.
For example, in South Korea, production of smartphone parts made up a third of 2017 economic growth—and even more in Taiwan. The tech cycle based on smartphones is highly sensitive to the calendar for product releases.
India is a big importer of smartphones but is not plugged into any part of the production cycle, be it components, final products or intellectual property. The question is: How do we get into the game—through protectionism or a better business climate?