The Competitiveness of Nations
in a Global Knowledge-Based Economy
H.H. Chartrand
April 2002
Michael Storper
The Limitations to Globalization: Technology Districts
and International Trade
Economic Geography
Volume 68, Issue
1
Jan. 1992,
60-93.
Index
Abstract
Six Propositions on Trade, Flexibility, Technology, and
Regional Development
Export Specialization and Technological
Dynamism
The Increase in Trade
Specialization
Trade and Product-Based Technological
Learning
An Historical Divide?
Developmental Effects: PBTL versus the
Rest
Specialization in Three Countries
Technological Learning and the Organization of
Production
Technology, Evolution, and Increasing
Returns
Problems with Path-dependence and Lock-in: The Division
of Labor
Technological Oligopolists and Production
Networks
The Regional Basis of Technological
Learning
The Global Economy as a Mosaic of
Regions
Networks and Geographical
Agglomerations
Learning and Regional Context: The Qualitative
Specificity of Externalities
The Territorialization of Learning: Regions and
Countries
Flexibility, Technology Districts, and the World
Economy
Flexible Production as a Technological
Trajectory
The Technology District as a Particular Form of the
Industrial District
The Limits to Globalization
References
Specialization in Three
Countries
There are two basic ways to approach specialization in
operational terms. The CTB
(Commercial Trade Balance) index developed by French researchers identifies
those sectors whose contribution to the overall balance is higher (or lower)
than their percentage share of the nation’s total trade (Lafay and Herzog 1989).
The Balassa Specialization Index,
on the other hand, relies on exports only, and it shows specialization when a
country’s exports account for a greater share of world exports than the
country’s overall share in world exports (Balassa 1965). Both are useful, but the latter is more
appropriate to our theoretical concern, because it is possible (though not
likely) that a country could have a weak or negative trade balance and still
enjoy strong or increasing export performance. The CTB in effect measures traded sectors
against other traded sectors of the country, whereas the Balassa index is more
directly oriented toward describing the strengths of the country’s exports
relative to the world as a whole, in the sense of the desirability of its
products per se. Take, for example,
We can thus say that a country is successfully
specialized in today’s world economy when its share of world exports of a
specific product is greater than its share of world trade as a whole (i.e.,
its imports and exports as a share of total imports and exports of the world);
in other words, the country is producing something that the world wants in
greater proportion than its overall participation in world trade. This criterion is empirically more
restrictive than a comparative advantage perspective in that it tends to reveal
fewer, but more intense areas of strength. Dosi, Pavitt, and Soete (1990, ch. 6)
show, in an international and intersectoral test, that precisely the sectors
with high absolute export share are highly innovative and relatively unaffected
by comparative advantage dynamics. Research by Porter (1990), using a
similar definition of specialization, reveals that the specializations of Italy,
Germany, the U.S., Switzerland, Japan, and Sweden are surprisingly different
from one another, even though the sectoral distribution of activities in these
economies would look relatively similar and increasingly convergent if viewed
side by side and in terms of more aggregated sectoral definitions (such as 2- or
3-digit SIC sectors).
It should be empirically possible to separate the three
potential causes of trade specialization alluded to above, i.e., cost, scale,
and PBTL. No tried and true method
of assigning such causes exists, but we can make educated guesses while awaiting
the development of an appropriate methodology. By separating trade specialization
sectors into these three causes, we could assess the overall importance of PBTL,
asking whether PBTL production accounts for an increasing proportion of world
trade, output, and value added, as suggested by the theoretical discussion
presented above.
I carried out three exercises designed to approximate
the different sources of export specialization in the three countries. Table 1 presents the trade composition
and trade ratios of some major industrial countries, according to the OECD’s
major industry groups: supplier-dominated industries are traditional, mostly
fashion-oriented sectors with high levels of product differentiation;
scale-
68
Table 1.
Source: Organisation for Economic Cooperation and
Development.
intensive industries are principally mass production
consumer durables and basic inputs; specialized suppliers are, for the most
part, highly differentiated capital goods inputs in metalworking and
mechanical engineering; and science-based industries are high technology
sectors. Scale-based industries
should compete principally on the basis of cost-price; specialized supplier and
science-based industries should have a high percentage of products where skill
and variety are key to competition; and supplier-dominated industries should be
divided among the two causes, according to the quality of the product, with
high-wage countries producing mostly skill- and variety-based outputs in those
sectors and Third World countries concentrating on price-based outputs. Note the extraordinary dominance of
Italian exports by the supplier-dominated industries and the near absence of
science-based products, as well as the important import quota of scale-intensive
products. In contrast,
Second, I identified the top 50 export sectors of the
three countries in terms of share of world exports (Tables 2-4). I then divided each country’s list into
sectors where competition is likely to be due principally to dynamic economies
of variety and learning (PBTL), in the right-hand column of Tables 5A-5C, and
those where other causes of export specialization are present, including
absolute advantages based in process or scale-based technologies, and possibly
even some simple comparative advantages based on scale of production. The sectors were classified according to
the four-fold grouping of
69
Table 2
Top Fifty
Source: UNIDO International Commodity Trade Statistics,
1985
70
Table 3
Top Fifty Italian Industries
Ranked in Terms of World Export Share, 1985
Source: UNIDO International Commodity Trade Statistics,
1985
71
Table 4
Top Fifty French Industries Ranked
in Terms of World Export Share, 1985
Source: UNIDO International Commodity Trade Statistics,
1985
72
Table 5A
The Roots of Export
Specialization: PBTL vs. the Rest,
sectors found in Table 1, where scale-based sectors are
found in the left-hand column and the other three groups in the right-hand
column. As background, it
should be noted that
A third initial approach to the
analysis
73
Table 5B
The Roots of Export
Specialization: Learning/Economics of Variety vs. the Rest,
of export specializations is to define groups of
industries that are, a priori, likely to share characteristics of PBTL, i.e.,
rapid basic technological change or a tendency to high levels of ongoing product
differentiation. I identified three
such groups: high technology (HTI); design-intensive and craft-oriented
manufacturing (DIC); and precision metalworking and mechanical engineering
(PMM). There are undoubtedly many
other similar sectors, especially in the service industries. We can see their different levels of
specialization in each of these groups, and also their high degree of
differention in terms of the learning-variety sectors they
dominate.
The
74
Table 5C
The Roots of Export
Specialization: Learning/Economics of Variety vs. the Rest,
France
share of PMMs does not qualify as a specialization,
falling just below the American “cutoff’ (i.e., its overall share of world
trade, which was 12.3 percent in 1985), but it is respectably close
(Table 6). The American share of
design-intensive goods, on the other hand, is less than half the country’s
cutoff. U.S. specializations in
high technology include several industries where the share of world trade is
very high; aircraft and parts, gas turbines, measuring and drawing equipment,
electro-medical equipment, ADP (automatic data processing), peripherals, and
digital computers all have shares at least three times the cutoff. Among the top 50 American shares in world
exports, one can find semiconductors, instruments, computers, and aircraft; in
terms of dollar volume, the most important are commercial aircraft and
helicopters, computers, firearms and ammunition,
piezoelectric
75
Table 5D
crystals, aircraft engines, and office machines and
computer parts. Although the
American position in PMM industries has suffered in recent years, the
Table 6
The Degree of Country
Specialization in HTO, DIC, and PMM Industries, 1985
Source: UNIDO and author’s calculations
76
share almost double the cutoff, contrasted to an
unimpressive 3.2 percent of world high technology exports.
Table 2:
Top Fifty
Table 3:
Top Fifty Italian
Industries Ranked in Terms of World Export Share, 1985
Table 4:
Top Fifty French
Industries Ranked in Terms of World Export Share, 1985
Table 5A:
The Roots of
Export Specialization: PBTL vs. the Rest,
Table 5B:
The Roots of
Export Specialization: Learning/Economics of Variety vs. the Rest,
Table 5C:
The Roots of
Export Specialization: Learning/Economics of Variety vs. the Rest,
France
Table 5D:
Totals for Three
Countries
Table 6:
The Degree of
Country Specialization in HTO, DIC, and PMM Industries,
1985
Table 7:
Technological
Districts in the
