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The Australian telecommunications equipment sector appears to have shown a marked improvement in international competitiveness since the mid-1980s. This paper analyses the causes of this growth in terms of responses to changes in the global— particularly the Asia-Pacific—market and market developments in Australia. This improved competitive position hasresulted in organisational change within multinational firms ba sed in Australia, with evidence of corporate specialisation , growing intraindustry trade and strategic alliances emerging which will link the local industry more closely with global developments.