THE GLOBAL NATURE OF THE COMPUTER INDUSTRY

Although its heart is in California’s Silicon Valley, the computer industry is a global enterprise. Intel’s Pentium processor, for example, was designed in the United States, but a particular example might be manufactured in Ireland from a Japanese semiconductor wafer, packaged in its protective housing in Malaysia, inserted into a printed circuit board in Taiwan, and assembled into a product that is sold in England by a German manufacturer. Many of the parts used in personal computers are now manufactured at factories across Asia, with production levels particularly highly concentrated in Japan, South Korea, Hong Kong S. A. R., and the island of Taiwan. Many industry suppliers expect mainland China and India to become large markets for computers in the future, and to develop large computer-manufacturing and software industries.
The software industry is also global. However, because programs have not yet been “componentized” (split into reusable modules that can be created separately), it is not as diverse as the computer hardware industry. All the best-selling operating systems and most of the leading applications programs have been written in the United States, then converted for use elsewhere. There are exceptions, such as accounting packages that meet local needs, but these tend not to be exportable. Nonetheless, the large pool of computer science graduates and the relatively low wages in countries such as India and China have started to create custom-programming industries outside the United States and Europe. Further globalization can be expected, thanks to the Internet’s tendency to make national boundaries invisible, and its ability to deliver software at little or no cost, without the need for packaging or printed manuals.
In the 1950s and 1960s large companies used relatively small numbers of computers to automate internal processes such as payroll and stock control, and computers are still performing these mundane tasks. However, the industry’s emphasis has shifted towards personal use, for “productivity applications” (word processing, desktop publishing), for communications (e-mail, instant messaging), and for entertainment (games, music, digital photography, video). Hundreds of millions of people now use personal computers in their daily lives, both in their workplaces and in their homes, and—thanks to the growing popularity of notebook PCs and electronic organizers—often in between the two. Few industries have changed so much in such a short time, and the pace of change shows no signs of slowing.