Local Development and Exports of Technology

Technology exports reflect important shifts in the global pattern of comparative advantage. They reflect increasing industrial maturity and technological experience accumulated in industrialization. Except for construction and capital goods, the volume of technology exports is comparatively small, but it has reached appreciable levels in recent years. More significantly, all types of technology exports have been growing rapidly, which seems likely to continue, particularly once favorable international market conditions are restored. Technology exports can be accounted for in terms of the influences of resource endowment, government policy, and firm strategy. The combined impact of these influences can be expressed in the following terms: overall resource endowment, including human capital, determines potential comparative cost advantage; firm strategy and country policy affect the realization of potential advantages and the relative profitability of exercising them through different means; strategy and policy aspects influence changes in comparative advantage through their effects on human and institutional capital accumulation. While there are benefits to greater participation in trade, acquiring experience in newly established areas takes time and effort.