With regard to the production process, the profound changes in the intra-sectoral division of labour are characterized by the following “stylized facts”:

(1)   The once tightly integrated value chain has become commodified, i.e. most IT-products are complex commodities, assembled from traded parts and components supplied by various industry segments. The control of the time-cycle of new technologies and products has become the chief problem of manufacturing organization in the industry;

(2)   As market control has shifted away from assemblers towards product definition companies (Borrus and Zysman 1997), product innovation is increasingly de-coupled from manufacturing.

(3)   In contrast to Fordist and also “Toyotist” industry models, there are no “focal corporations” (Sauer and Döhl 1994) that coordinate the value chain through their own manufacturing operations. The “supplier pyramid” governed by large-scale final assemblers (as in the auto or TV-industry) is replaced by networks of interacting industry segments. Hierarchy is defined by the flagships ability to control technology development in key market segments; and

(4)   The acceleration of technology and product development has produced enormous instability across the value chain. Rapid expansion through the creation of new product markets is accompanied by old-style cycles of overproduction and surplus capacities – a situation which is at the core of the current slump in the high-tech industry.

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