Vertical Integration into Global Value Chain and Its Effect on Skill Development

This study examines mechanism that stimulated needs for advanced skills in management and engineering, which eventually increase demand for skilled workers. It is important and urgent in the case of Malaysia, whereby the supply of required skills for accelerating economic transformation is critically insufficient. As an attempt to provide an insight into the issue of developing skills, a case study of Japanese Multinational Company (JMNC) was undertaken. This qualitative study applied content analysis on data covering the period from 1980 to 2012. Findings show that the integration of the subsidiary's production network into its global value chain spurs increasing needs for skill development. These findings offer significant theoretical and practical implications to human resource development in international business. The study enhances understanding on the impact of MNC activities in one of the emerging Asian economies.