bypass top and left hand navigationNational Science Board   HOME     PDF     SEARCH     HELP     COMMENTS  
Science and Engineering Indicators 2004
  Table of Contents     Figures     Tables     Appendix Tables     Presentation Slides  
Chapter 6:
U.S. Technology in the Marketplace
New High-Technology Exporters
International Trends in Industrial R&D
Patented Inventions
Venture Capital and High-Technology Enterprise
Characteristics of Innovative U.S. Firms
Click for Figure 6-14
Figure 6-14

Click for Figure 6-15
Figure 6-15

Industry, Technology, and the Global Marketplace

PDFPrint this chapter (222K)
New High-Technology Exporters

National Orientation
Socioeconomic Infrastructure
Technological Infrastructure
Productive Capacity
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.[7] 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:[8]

  • 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.[9]

National Orientation top of page

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 Group 2002).

Ireland and Israel posted by far the highest overall scores on this indicator (figure 6-14 figure and appendix table 6-5 Microsoft Excel icon). 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 not entrepreneurial.

Socioeconomic Infrastructure top of page

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[10] (figure 6-14 figure).

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 education data.

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.

Technological Infrastructure top of page

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 to industry.

China and Israel received the highest scores of the group of newly industrialized or transitioning economies examined (figure 6-14 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.

Productive Capacity top of page

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 6-14 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 top of page

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 figure and appendix table 6-6 Microsoft Excel icon). 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 6-14 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.


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

[8]  See Porter and Roessner (1991) for details on survey and indicator construction; see Roessner, Porter, and Xu (1992) for information on the validity and reliability testing the indicators have undergone.

[9]  See notes to appendix table 6-5 Microsoft Excel icon for a complete description of data used in each of the four indicators.

[10]  The Harbison-Myers Skills Index, which measures the percentage of the population attaining secondary and higher education, was used for these education-based assessments. See appendix table 6-5 Microsoft Excel icon for complete source reference.

Previous Page Top Of Page Next Page