NSF PR 95-50 - July 24, 1995
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New Report Says Several Asian Nations Closing the
High-Tech Gap
Findings Reveal Three Distinct
"Tiers"
Several Asian economies appear headed toward greater
prominence as developers of technology, an achievement
that will make them more viable challengers to world
high-tech markets currently dominated by industrialized
countries such as the U.S., Japan, and Germany, according
to a new report released today by the National Science
Foundation (NSF).
According to NSF Director Neal Lane, the report "clearly
says to me that the U.S. must continue to strengthen
its own investments in the R&D enterprise if we are
going to meet the economic challenges brought on by
the high-tech development of these and other nations."
In addition, Lane agrees with the report that there
is a silver lining: "The rise of these Asian nations'
economies does mean larger and more robust markets
for U.S. products, and more opportunities for U.S.
scientists and engineers to collaborate."
The report -- "Asia's New High-Tech Competitors" --
used various criteria to compare the technological
capacity of Japan (included as a benchmark by which
to judge other Asian economies), with those of Hong
Kong, Singapore, South Korea, Taiwan, China, India,
Indonesia, and Malaysia. Among the criteria used were
analysis of patents and patenting trends, U.S./Asia
trade in U.S. high-tech products and technological
knowhow, acquisition of U.S. high-tech companies,
and acceptance of foreign investment.
Not surprisingly, given its long-standing ability
to compete with other industrialized powers such as
the U.S. and Germany, Japan still stands alone as
the most advanced industrialized country in the region.
Closing quickly on Japan, however, are the economies
of Hong Kong, Singapore, South Korea, and Taiwan.
Often referred to as the "four tigers" or as newly
industrialized economies (NIEs), these countries have
made "dramatic leaps forward" in the global technological
economy over the past decade.
Said Cora Marrett, the NSF assistant director for
social, behavioral, and economic sciences [the NSF
organization which produced the report]: "We've thought
for quite some time that several of these nations
were on the verge of bursting into worldwide industrial
prominence; this report confirms those beliefs."
Furthermore, the report predicts that Taiwan and South
Korea are the most likely to make the greatest impact
in technologyrelated fields and high-tech product
markets. These predictions are based upon:
· strong patent activity in the U.S. in electronics
and communications; · data showing both economies
increasing their licensing of U.S. technological know-how;
and · data showing both economies' rapidly rising
imports of U.S. products that incorporate advanced
technologies.
In addition, both economies' have significant technological
infrastructures in place that should serve to support
further growth in high-tech industries. Cited as evidence
of technological infrastructure are: systems of intellectual
property rights, R&D activities closely related to
industrial applications, large numbers of qualified
scientists and engineers, and others.
Singapore and Hong Kong, on the other hand, while
they show strong signs of technological strength,
currently appear to be more technologically limited
than either Taiwan or South Korea. The report also
concludes that the relatively small populations of
these countries might "limit their ability to make
a major impact across a broad spectrum of technology
areas." Malaysia: Next "Asian Tiger?" Among the four
third-tier countries -- China, India, Indonesia, and
Malaysia -- only the latter appears to be moving substantially
closer in technological mastery and hightech production
to the more developed NIEs.
The report found that Malaysia is purchasing increasing
amounts of U.S. high-tech products and has attracted
large amounts of foreign investment necessary to build
high-tech manufacturing facilities. While many of
these facilities are simple assembly operations, the
country's commitment to technology based development
and its commitment to education and technical training
suggest that as it gains technological capabilities,
more complex processing will likely follow.
While China, India, and Indonesia faired well in some
economic indicators, their economies did not show
the same level of national strategy, technological
infrastructure, or inplace capacity that would project
technological competitiveness in the near future.
Implications for U.S: Challenges and Opportunities.
According to the report, the expected development
of one or more of the Asian countries into significant
industrial economies creates both challenges and opportunities
for the U.S.
If these nations continue to progress technologically,
U.S. high-tech industries can expect competition for
global market shares to intensify.
In addition, as Asian economies grow, so will the
competition for the best science and technology talent.
Through the years Asia has sent many of its best students
to U.S. universities, and many of these students have
stayed and worked in U.S. industries. As opportunities
to work at the technological cutting-edge are created
in Asia, it seems likely that many of these students
will increasingly opt to return to Asia. In addition,
the increased competition is likely to attract some
of the best American minds now available in industrial,
university, and government sectors.
On the other hand, as other nations become more technologically
advanced they will provide new opportunities for U.S.
high-tech industries and the U.S. scientific and technological
enterprise as a whole in the form of larger markets
and new collaborators in scientific and technological
research.
The nine economies profiled in this report comprise
many of the world's fastest growing, and contain about
half the world's population. With the end of the Cold
War and the implementation of the General Agreement
on Tariffs and Trade (GATT), the climate for global
trade will have never been better, the report concludes.
Free, single copies of "Asia's New High-Tech Competitors," NSF
95309, may be obtained by writing to NSF Forms and Publications
Unit, 4201 Wilson Blvd., Room P-15, Arlington, VA 22230; by calling
(703) 306-1130; by faxing (703) 6444278; or by e-mailing pubs@nsf.gov.
Journalists may obtain copies by contacting NSF's Office of Legislative
and Public Affairs,(703) 306-1070.
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