Abstract: The Origins of Offshoring: Electronics Manufacturing by U.S. Multinationals in Low-Wage Countries during the 1960s

David Koistinen

Abstract

Offshore manufacturing has been a key aspect of the international economy of recent decades.  Despite its importance, the topic has received limited attention from historians.  Offshore manufacturing (or “offshoring”) entails shifting to low-cost locations abroad the production of goods that will be consumed at home.  Electronics was one of the first industries affected by offshore manufacturing, and the impact in that sector was profound.  This paper examines the first decade of offshoring in electronics, during the 1960s.  In that era, U.S. manufacturers offshored production of radios, televisions, and components for radios, televisions, and computers.  Japanese and European producers engaged in a degree of offshore manufacturing during the same period.  Newly industrialized East Asian locations such as Hong Kong, Taiwan, and Korea were the principal locales for offshore production; northern Mexico was also important.  U.S. electronics makers offshored production to remain competitive with low-price imports from Japan and other East Asian locations and to gain a cost advantage over rival firms in the domestic market.    Offshoring created employment and promoted economic development in low-wage locales but resulted in significant blue-collar job losses in the United States and other developed countries.  The paper presents the preliminary findings of research on what will eventually be a book-length project.