Findings From the Four Indicators
Several nations made tremendous technological advances over the
past decade and are positioned to become more prominent in technology
development because of their large, ongoing investments in S&E
education and R&D.
However, their success may depend on other factors as well, including
political stability, access to capital, and an infrastructure that
can support technological and economic advancement.
This section assesses a group of selected countries and their potential
to become more important exporters of high-technology products during
the next 15 years, based on the following leading indicators:
- National orientation-evidence that a nation is taking
action to become technologically competitive, as indicated by
explicit or implicit national strategies involving cooperation
between the public and private sectors.
- Socioeconomic infrastructure-the social and economic
institutions that support and maintain the physical, human, organizational,
and economic resources essential to a modern, technology-based
industrial nation. Indicators include the existence of dynamic
capital markets, upward trends in capital formation, rising levels
of foreign investment, and national investments in education.
- Technological infrastructure-the social and economic
institutions that contribute directly to a nation's ability to
develop, produce, and market new technology. Indicators include
the existence of a system for the protection of intellectual property
rights, the extent to which R&D activities relate to industrial
application, competency in high-technology manufacturing, and
the capability to produce qualified scientists and engineers.
- Productive capacity-the physical and human resources
devoted to manufacturing products and the efficiency with which
those resources are used. Indicators include the current level
of high-technology production, the quality and productivity of
the labor force, the presence of skilled labor, and the existence
of innovative management practices.
This section is an analysis of 15 economies: 6 in Asia (China,
India, Indonesia, Malaysia, the Philippines, and Thailand), 3 in
Central Europe (Czech Republic, Hungary, and Poland), 4 in Latin
America (Argentina, Brazil, Mexico, and Venezuela), and 2 others
(Ireland and Israel) that showed increased technological activity.
The national orientation indicator identifies nations in which
businesses, government, and culture encourage high-technology development.
It was constructed using information from a survey of international
experts and previously published data. The survey asked the experts
to rate national strategies that promote high-technology development,
social influences that favor technological change, and entrepreneurial
spirit. Published data were used to rate each nation's risk factor
for foreign investment during the next 5 years (PRS
Ireland and Israel posted by far the highest overall scores on
this indicator (figure 6-14
table 6-5 ).
Although Ireland scored slightly lower than Israel on each of the
expert-opinion components, its rating as a much safer place for
foreign investment than Israel elevated its composite score.
The national orientations of both Ireland and Israel were scored
consistently and significantly higher than those of other countries
examined and were well within the range of scores accorded the more
advanced economies of Taiwan and Singapore. Malaysia, Hungary, Poland,
the Czech Republic, China, and India also scored well, with strong
scores in each indicator component.
Indonesia, Thailand, and two Latin American countries, Argentina,
and Venezuela, received the lowest composite scores of the economies
examined. Indonesia and Thailand were rated low on all variables
but were hurt most because they were considered riskier or less
attractive sites for foreign investment. Argentina and Venezuela
also received consistently low scores on each variable and were
hurt most by the expert perception that these three countries were
The socioeconomic infrastructure indicator assesses the underlying
physical, financial, and human resources needed to support modern,
technology-based nations. It was built from published data on percentages
of the population in secondary school and in higher education and
survey data evaluating the mobility of capital and the extent to
which foreign businesses are encouraged to invest and do business
in that country
(figure 6-14 ).
Ireland and Israel again received the highest scores among the
emerging and transitioning economies examined. In addition to their
strong records in general and higher education, Ireland's and Israel's
scores reflect high ratings for the mobility of capital and encouragement
of foreign businesses to invest there. Their scores were similar
to those of Taiwan and South Korea.
Among remaining nations, Malaysia and the three Central European
countries all posted similar high scores. The socioeconomic infrastructure
score for Malaysia was bolstered by the experts' high opinion of
the mobility of capital in the country, whereas the Central European
countries received high scores for their strong showing in the published
Indonesia received the lowest composite score of the 15 nations
examined. It was held back by low marks on two of the three variables:
educational attainment (particularly university enrollments) and
the variable rating of its mobility of capital.
Five variables were used to develop the technological infrastructure
indicator, which evaluates the institutions and resources that help
nations develop, produce, and market new technology. This indicator
was constructed using published data on the number of scientists
in R&D; published data on national purchases of electronic data
processing (EDP) equipment; and survey data that asked experts to
rate each nation's ability to locally train its citizens in academic
S&E, make effective use of technical knowledge, and link R&D
China and Israel received the highest scores of the group of newly
industrialized or transitioning economies examined (figure
China's score was influenced greatly by the two components that
reflect the size of its population: its large purchases of EDP equipment
and its large number of scientists and engineers engaged in R&D.
Israel's high score on this indicator was based on its large number
of trained scientists and engineers, the size of its research enterprise,
and its contribution to scientific knowledge. Indonesia and Venezuela
again recorded the lowest scores among the 15 countries examined.
The productive capacity indicator evaluates the strength of a nation's
manufacturing infrastructure and uses that evaluation as a baseline
for assessing the country's capacity for future growth in high-technology
activities. The indicator considers expert opinion on the availability
of skilled labor, the number of indigenous high-technology companies,
and the level of management ability, combined with published data
on current electronics production in each country.
Ireland scored highest in productive capacity among the 15 developing
and transitioning nations examined, receiving high marks for each
indicator component (figure
Its score was boosted by its prominence in the computer hardware
manufacturing industry. China, Israel, and India followed closely,
with each posting strong scores on all indicator components.
Several developing Asian economies, particularly China and Malaysia,
had higher electronics production than Ireland in 1999, the reference
year for the published data. However, they scored lower on indicator
components rating their labor pools and management personnel. Mexico's
production of electronics products, which was this indicator's published
data variable, was greater than Ireland's, but its overall score
was hurt by experts' low rating of the quality of Mexican skilled
labor and the existence of indigenous electronics components suppliers.
Findings From the Four Indicators
Based on this set of four leading indicators, Ireland and Israel
again earned high scores and appear to be on the path to prominence
as exporters of technology products in the global market. Both countries
posted similar high scores when these same indicators were developed
3 years ago (figure 6-15
table 6-6 ).
The latest results show that Ireland led the group of countries
examined in two of the four leading indicators and received the
second-highest score in a third, socioeconomic infrastructure. Israel
ranked first in socioeconomic infrastructure because of its large
number of trained scientists and engineers, its highly regarded
industrial research enterprise, and its contribution to scientific
knowledge. Israel placed second on two of the remaining indicators
and third on the other (figure
China and Hungary also posted strong scores on several indicators.
Hungary ranked third on the indicator identifying nations that are
taking action to become technologically competitive and fourth on
both the socioeconomic and technological infrastructure indicators.
China scored nearly as well and sometimes better than Hungary on
the leading indicators, but its scores were not quite as balanced
and were likely inflated by its large population.
These indicators provide a systematic way to compare future technological
capability for an even wider set of nations than might be available
using other indicators. The results highlight how the group of nations
that compete in high-technology markets may broaden in the future,
as well as reflect the large differences among several emerging
and transitioning economies and those considered newly industrialized.