Research and development activities serve as an incubator for new ideas that lead to new processes, products, and even industries. While not the only source of new innovations, R&D activities are associated with many of the important new ideas that have helped shape modern technology. Japanese society is widely recognized for the importance it places on education, especially education in technical fields. Similarly, Japanese industry is widely recognized for its large investments in applied research and development. Figures 1, 2, and 3 suggest that these characteristics might be attributed to several other Asian economies, as well.
One of the important benefits derived from the Asian investments in both human and R&D capital is the development of new technical inventions that often lead to innovations - i.e., in new or improved products, and in more efficient manufacturing processes and services. One indicator of inventiveness is the patenting activities of a nation's inventors. A review of the literature shows patent data to be valuable indicators of technical change and inventive output (see Griliches 1990).
Examining domestic patent activity provides the following information about a nation's technology development:
In 1990, nearly one-third more patents were granted to resident inventors in the Asian region than in 1985. This increase would be still greater if not for the more moderate increase recorded (19 percent) on the far larger number of Japanese patents. Domestic patenting by residents of the NIEs and EAEs alone doubled between 1985 and 1990.
These data also reveal that foreign inventors have been patenting in Asia at an even faster pace than the region's resident inventors. Due to the greater difficulty and costs associated with gaining patent protection in a foreign country, this trend suggests _that foreign inventors see marketing opportunities in the region that justify the time and expense involved in patenting.
The numerical relationship between resident and foreign patenting also suggests a nation's openness to, need for, and dependence on foreign-developed science and technology. Within the region, the level of this foreign activity varies widely. Japan had the lowest percentage of patents awarded to foreign inventors (15 percent in 1990): nearly 6 patents were granted to resident inventors for every one awarded to a foreign inventor. Singapore and Hong Kong had the highest percentages of patents awarded to nonresident inventors - 99 percent and 98 percent, respectively. Taiwan is squarely in the middle of these two extremes, with 51 percent of its 1990 patents granted to foreigners. Taiwan's resident/nonresident patenting ratio is similar to that of the United States. (See figure 5.)
Text Table 1
Asian Patenting Trends in the United States
Analysis of Asian inventiveness using patent activity in the individual economies is complicated by differences in patent laws and processes. These differences are eliminated by examining Asian patenting in a country located outside the region, such as the United States. Research has shown that the United States' patent system serves this purpose well: the United States is a large, wealthy country whose market dynamics tend to attract cutting-edge technologies from around the world.
During the 1970s, the number of U.S. patents granted to Asian inventors nearly doubled; it tripled during the 1980s. Not surprisingly, given its economic position vis-a-vis the other economies in the Asian region, Japan represented about 95 percent of Asia's patent activity over these two decades. (See Figure 6 and appendix table 4.)
The most rapid growth in U.S. patenting among Asian inventors was recorded by those from Asia's newly industrialized economies. Paced by inventors from Taiwan and South Korea, NIE patenting in the United States quadrupled during the 1970s, and increased tenfold during the 1980s, with the most dramatic growth registered after 1987. The sharp rise in U.S. patenting by inventors from Taiwan and South Korea closely tracks the rapid growth in industrially funded R&D spending in those two countries. (See figure 3 and NSF 1993.)
Patenting in the United States by inventors from the emerging Asian economies was more erratic - declining during the seventies, and rising during the eighties and into the nineties. Chinese inventors led the EAEs in patents awarded after 1986, making particularly impressive strides during the last few years. Since 1988, inventors from China have obtained more U.S. patents than have inventors from Singapore and as many as inventors from Hong Kong.
In 1990, Asian inventors were awarded a large number of U.S. patents in the semiconductor field, fields associated with television and other telecommunication technologies, and several computer-related fields. Inventors from each of the Asian economies showed a tendency to patent in these fields; theavored other electronics-related technologies. (See appendix tables 5 to 11.) There is considerable consensus among experts in the United States that leadership in these kinds of facilitating technologies will play a role in future economic competitiveness.
For analytic purposes, U.S. patents can be classified by industry sector, with each patent fractionally distributed according to the number of industry-related product fields to which it is pertinent. Six commercially significant industries are examined here: computer hardware, industrial machinery, radio and television equipment, electronics, automobiles, and aircraft. (See appendix table 12.) Among these six industries, Japanese patenting in the United States grew fastest in computer-related technologies. NIE patenting grew fastest in electronics (led by South Korean inventors), as did EAE patenting, led by China.