A new study of international competitiveness may give U.S. producers of technology products another reason to be looking over their shoulders.
Though the United States remains the undisputed world leader in exporting technology products, the Georgia Institute of Technology study of technological capabilities among 33 nations shows the industrializing countries of Asia quickly catching up, thanks to an information-based economy that facilitates rapid change. The National Science Foundation-sponsored study, "Indicators of Technology-Based Competitiveness," is the latest in a series of reports published every three years since 1987.
"Our study points to a much more competitive environment for the United States," said Dr. Alan Porter, director of the Technology Policy and Assessment Center at Georgia Tech. "The playing field is changing from a ski slope to a gentle plateau. No longer is the United States alone on the playing field with the Japanese."
Though the study evaluates nations as varied as Israel, Brazil and the Czech Republic, Porter sees the real action among the "Asian Cubs." These challengers -- including China, India, Malaysia, Thailand, Indonesia and The Philippines -- are moving up alongside traditional regional leaders, the "Asian Tigers" South Korea, Taiwan and Singapore.
"There are eight or ten countries in Asia that show dramatic changes," he said. "This includes countries like India and China that are going to be real technological powerhouses."
Over the past decade, these nations have developed the technological infrastructure to move from manufacturers of products to developers of products. The growth of indigenous engineering and management capabilities, development of research and development capabilities, and the rise of entrepreneurship signal this transition. Said Porter: "When you put these together, you have a real productive capability."
Facilitating the change has been an emphasis on information-based technology.
"All of these industrialized and industrializing countries can now play in this technology arena," he explained. "The more information based things become, the more quickly this happens because countries don't need as much heavy infrastructure. It's quicker to get up to speed on information-based technology than it was in heavy industry because of inertia."
The growing importance of new technologies such as genomics may step up that pace. Here, Porter warned, the cautious regulatory stance of the United States could prove a disadvantage in competition with nations that can easily adopt new information-based technology.
Porter and Dr. David Roessner - also a faculty member with the Center - have jointly led the production of these "High Tech Indicators" every three years since 1987. Collaborators Nils Newman and Xiao-Yin Jin, respectively, led the compilation of statistical and expert opinion components (from an international panel of 300 experts).
The team derives four input indicators that influence a nation's long-term ability to produce technology products - national orientation (toward technology-based competition), socio-economic infrastructure to support this, technological infrastructure, and productive capacity. They likewise address three output indicators, including technological standing in world markets.
Among the output indicators, which measure the current state of technology export competition, the United States is the clear leader. In 1997, the U.S. exported $258 billion worth of high tech products, compared to $152 billion for Japan, $140 billion for Germany, $105 billion for the United Kingdom, $90 billion for France, and $70 billion for Singapore.
Of most interest are the input indicators that purport to predict future competitiveness of nations over roughly a 15-year horizon. A chart representing a composite of the four indicators, each scaled to a maximum of 100 for the world's strongest country on that measure, dramatically shows the tendency for toughening competition, particularly from the Asian nations.
Among the input indicators, the United States enjoys an overwhelming lead in technological infrastructure. This factor captures the strength and contributions of a nation's scientific and engineering manpower, electronic data processing purchases, the relationship of its research and development to industrial application, and its ability to make use of technical knowledge. It places heavy emphasis on numbers of scientists and engineers.
With the U.S. score of 100 in technological infrastructure, the nearest competitor is Japan with 39. This measure has remained relatively constant among nations with the exception of India -- the only nation to shift more than ten points from 1993 to 1999.
Based on what it has meant in the past, Porter sees this science-based infrastructure as key to future U.S. leadership: "In the early 1980s, we were all wringing our hands because Japan was moving up so quickly, but the United States came back strongly because we never lost the R&D leadership."
In productive capacity, the ability to manufacture technology-intensive products, the United States has replaced Japan as the world leader. From 1996 to 1999, U.S. exports increased by $71 billion, while Japan's decreased by $44 billion. On the scale with the U.S. at 100, Japan rated 61, China 19, Germany 15 and the United Kingdom and South Korea both at 13.
However, on factors that measure national will to compete, the U.S. lags behind its challengers. In national determination to improve technology competitiveness, nations such as Taiwan, Singapore, Ireland and Israel lead the United States. And in emphasis on exporting technology products, the U.S. trails Singapore, Malaysia, Ireland, Japan, Taiwan -- and even the Philippines.
Ratings of socioeconomic infrastructure -- educational system, mobility of capital and encouragement of foreign investment -- demonstrate how challengers from Asia have leveled the playing field, with 12 of 33 nations now within 20 points of the U.S. The study examines production of non-defense technology products.
However, the growing importance of technical services, such as software development and engineering consulting, may force a change in that definition for future studies. Roessner is presently leading an NSF-supported project to improve the indicators.
The next edition of the report is scheduled to be published in 2002.
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Technical Contacts: Alan Porter (404-894-2330); E-mail: (alan.porter@isye.gatech.edu); Fax: (404-894-2301)
Visuals: Charts showing composite input indicators, individual indicators.