New High-Technology Exporters

Several nations are rapidly becoming more competitive in international high-technology trade. Large ongoing investments in S&T, education, and R&D[31] have supported their progress, but other factors, such as political stability, access to capital, and an infrastructure that can support technological and economic advancement, are likely to affect their ability to advance in the future.

This section presents four indicators that may be relevant to the long-term potential of developing economies to maintain or improve their competitiveness in international high-technology markets. National scores on each indicator are computed using both statistical data and systematic expert assessments (Porter et al. 2005).[32] The indicators are:

  • Technological infrastructure. This term refers to the social and economic institutions that help a nation develop, produce, and market new technology. This indicator combines statistical data on the number of scientists employed in R&D and electronic data processing purchases with expert assessments of technical training and education, industrial R&D, and technological mastery.
  • Socioeconomic infrastructure. This term refers to the social and economic institutions necessary to sustain and advance technology-based development. This indicator combines statistical data on educational attainment with expert assessments of national policies toward multinational investment and capital mobility.
  • Productive capacity. This term refers to the physical and human resources devoted to manufacturing products and the efficiency with which these resources are used. This indicator combines statistical data on electronics production with expert assessments of the management capability and indigenous supply of skilled labor and component parts for high-technology manufactured goods.
  • National orientation.. This term refers to national policies, institutions, and public opinion that help a nation become technologically competitive. This indicator combines a statistical measure of investment risk with expert assessments of national strategy, implementation, entrepreneurship, and attitudes toward technology.

In their present form, these four indicators have been tracked for a relatively stable set of developing and industrialized countriessince the early 1990s. Because these indicators were designed to forecast long-term changes in national high-technology competitiveness, especially among developing nations, analyses of whether and how they predict future competitiveness and how they compare to other measures remain preliminary and inconclusive (Porter et al. 2001).[33] As a result, the primary value of these indicators at this stage is that they synthesize a large amount of potentially relevant data in a way that enables systematic comparisons and lays the groundwork for more probing analyses in the near future.

This section examines composite scores of the four indicators in 2007 for 14 developing countries, classified as middle or low income by the World Bank. The developing countries were divided into groups of larger and smaller economies according to their 2004 GDP in 1990 purchasing power parities: larger being economies that are greater or equal to $750 billion and smaller being less than $750 billion.

According to its 2007 composite score, China is the highest ranked of the six large developing economies examined (table 6-17table.; appendix table 6-26Excel.). Ranked fourth a decade ago, China moved to second in 1999, then to first in 2002, overtaking India, the previous leader. China’s ascent was largely driven by a near doubling of its productive capacity indicator score over the last decade. The high rankings of both China and India in part result from advantages associated with size: a large and rapidly growing domestic market, a big population, and a growing number of scientifically and technically trained graduates.

Russia’s ranking has fluctuated over the last decade (table 6-17table.; appendix table 6-26Excel.). In 2007, it was third, ahead of Mexico and Brazil. Mexico’s 2007 ranking was higher than in past cycles as a result of rising scores for all four indicators. Brazil continued a decade-long decline resulting from low or negative growth for all four indicators. Indonesia has been ranked last among the six large developing economies for much of the decade.

Among the eight smaller developing economies examined, Malaysia ranks first in future high-technology export potential, followed by Poland and Hungary (table 6-18table.; appendix table 6-26Excel.). Thailand, ranked fourth, improved from its seventh rank in 1999 and 2002 as a result of growth for all four indicators. South Africa, Argentina, the Philippines, and Venezuela occupy the bottom half of this group. Among these countries, the Philippines has exhibited the most change in its position during the last decade, dropping from first in 1996 to seventh in 2007. Venezuela has been the lowest-ranked of the eight countries for the last decade. Although higher-ranked than Venezuela, the remaining two countries, South Africa and Argentina, have consistently ranked in the bottom half of this group.

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Notes

[31] See chapter 2 for a discussion of international higher education trends and chapter 4 for a discussion of trends in U.S. R&D.

[32] For details on survey and indicator construction, see Porter et al. (2005).

[33] For information on the validity and reliability testing the indicators have undergone, see Porter et al. (2001, 2005) and Roessner, Porter, and Xu (1992).

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