Lead Markets: Drivers of the Global Diffusion of Innovations

Multinational corporations are often faced with regionally varying market conditions, local environments and demand preferences. This paper presents the lead markets concept of developing global innovation that takes advantage of the lead market phenomenon. A lead market is a regional market that is first to adopt global innovation designs. A system of five lead factors explains the lead role of a market: a demand advantage, a price advantage, an export advantage, a transfer advantage and a market structure advantage. The system of lead market factors is then evaluated in a detailed case study of the cellular mobile telephone industry. It is suggested that companies can harness lead markets for the development of global innovations. By developing and refining innovations in close interaction with the local environment of a lead market, a company can focus on a narrow range of preferences and feedback, lowering the risk of being locked into idiosyncratic environments, and generate true global innovations.International diffusion of innovation, R&D internationalisation, Market entry strategy

Factors Affecting U.S. Trade and Shipments of Information Technology Products: Computer Equipment, Telecommunications Equipment, and Semiconductors

Despite a recent downturn, the information technology (IT) products sector experienced a tremendous expansion in trade and shipments during the last decade and became an increasingly important component of the U.S. economy. This expansion was driven by a variety of factors such as the globalization of IT production, constant technological innovation, rapid growth in worldwide consumption, and global trade liberalization. This working paper will examine these factors, providing particular attention to the computer equipment, telecommunications equipment, and semiconductor industries.International Development,

The electronics industry in central and eastern Europe: an emerging production location in the alignment of networks perspective

This paper analyses the emergence of central Europe as a new location for the production of electronics. The main factors that drive integration in the region into global production networks are also analysed, as well as prospects for upgrading the industry by using network alignment perspectives. Foreign investment is the primary vehicle of integration of CEE electronics firms into global production networks, and Hungary has moved furthest along this path, positioning itself as a major low-cost supply base in the region. Czech and Polish electronics industries are connected, in smaller, but increasing, degrees to international electronics production networks. Networks that are being built in CEE in electronics are usually confined to subsidiaries with still limited local subcontracting; they are export-oriented and are expanding. Local subsidiaries have mastered production capabilities and several subsidiaries in Hungary are European mandate suppliers in their respective lines of business. EU demand is the main pull factor, which gives cohesion to the actions of MNCs as well as to the action of local and national governments in CEE. The layer of local firms is still very weak with very limited capabilities in core technologies. This is the key weakness which prevents further alignment of networks in CEE electronics. Local governments play an important role in working jointly with foreign investors in establishing industrial parks and new capacities

Innovative Asia: Advancing the Knowledge-Based Economy - Highlights of the Forthcoming ADB Study Report

[Excerpt] The development of knowledge-based economies (KBEs) is both an imperative and an opportunity for developing Asia. It is an imperative to sustain high rates of growth in the future and an opportunity whereby emerging economies can draw from beneficial trending developments that may allow them to move faster to advance in global value chains and in position in world markets. Over the last quarter of a century, driven mostly by cheap labor, developing countries in Asia have seen unprecedented growth rates and contributions to the global economy. Sustaining Asia’s growth trajectory, however, requires developing economies to seek different approaches to economic growth and progress, especially if they aspire to move from the middle-income to the high-income level. KBE is an important platform that can enable them to sustain growth and even accelerate it. It is time for Asia to consolidate and accelerate its pace of growth. Asia is positioned in a unique moment in history with many advantages that can serve as a boost: to name a couple, an expanding middle of the pyramid—Asia is likely to hold 50% of the global middle class and 40% of the global consumer market by 2020; and the growing importance of intra-regional trade within Asia, increasing from 54% in 2001 to 58% in 2011. Many developing economies are well placed to assimilate frontier technologies into their manufacturing environment

Has the European ICT sector a chance to be competitive ?

The ICT sector is featured by technical progress, convergence and systems integration. This leads to risks of monopolization regimes at the core with higher competition regimes at the periphery. Moreover, some specific component of the system may be essential for its evolution. In particular, networking to some extent creates the system, while software (notably operating systems) is the “glue” which holds it together. In this context, the European ICT industry is potentially smashed between the cost advantages of Asian countries such as China, and the inventiveness and dynamism of the US industry. The way out of this difficult situation is to create in Europe the conditions of restoring knowledge accumulation. By concentrating on an ambitious project of open source software production in embarked and domestic systems, Europe could reach several objectives: to make freely accessible an essential facility of networks, to stimulate competition, to help reaching the Lisbon objectives and to restore the European competitiveness in ICT.information and communications technologies ; industrial policy ; competition regimes ; knowledge based society ; open source

Chasing Sustainability on the Net : International research on 69 journalistic pure players and their business models

This report outlines how online-based journalistic startups have created their economical locker in the evolving media ecology. The research introduces the ways that startups have found sustainability in the markets of ten countries. The work is based on 69 case studies from Europe, USA and Japan. The case analysis shows that business models can be divided into two groups. The storytelling-oriented business models are still prevalent in our findings. These are the online journalistic outlets that produce original content – news and stories for audiences. But the other group, service-oriented business models, seems to be growing. This group consists of sites that don’t try to monetize the journalistic content as such but rather focus on carving out new functionality. The project was able to identify several revenue sources: advertising, paying for content, affiliate marketing, donations, selling data or services, organizing events, freelancing and training or selling merchandise. Where it was hard to evidence entirely new revenue sources, it was however possible to find new ways in which revenue sources have been combined or reconfigured. The report also offers practical advice for those who are planning to start their own journalistic site

Innovation, technology and the global knowledge economy: Challenges for future growth

This paper discusses the role of knowledge, technology and innovation in economic growth within the context of the “Green roads to growth” project. It summarizes the current state of the art in this area, illustrates this with selected graphs and tables based on published statistics and raises issues for discussion. The main focus is on the big shift of our understanding of economic growth that has taken place in recent decades, exemplified by emergence of terms such as “the knowledge based economy”, “the ICT revolution” and “innovation”, which - although not an entirely new issue – did not get much attention a few decades ago. Particular emphasis is placed on reviewing the new micro-evidence on innovation and the knowledgebased economy that has emerged in recent years. However, since extensive micro-evidence on innovation and knowledge-based growth is available only for a limited number of developed economies, we also consider other types of indicators (that are available for a larger set of countries), and present a synthetic overview of the differences in performance across different parts of the globe. Finally we summarize the main trends and discuss the challenges posed by these for future growth, sustainability and policy.

Deregulation and Enterprization in Central and Eastern Telecommunication - a Benchmark for the West?

The restructuring of telecommunication in Central and Eastern Europe occurs at a time when the classical structures of telecommunication are falling apart worldwide. Coming from the socialist system in which telecommunication did not exist as an independent economic activity, the Eastern European countries have created specific "post-socialist" modes of reform, often outdoing Western countries in terms of speed and radicality. Deregulation and enterprization have dominated the process in all countries, leading to advanced technical standards and a wide segmentation of telecommunication markets. The role of foreign direct investment and technology transfer was particularly important. But the reforms also lead to an increasing social gap between the prosperous users of advanced telecommunication services, and the average citizen for which even telephony has become a luxury good. Our thesis is that CEE telecommunication reform, rather than copying Western models, may become a benchmark for the West, in particular for Western Europe. Technically, the advanced reform countries in Central Europe are about to succeed the leapfrogging process, i.e. the jump from post-war socialist technologies to world-leading edge-of-technology standards. With regard to industry structures, Central and Eastern European countries show that the age of "classical" integrated telecommunication activities is definitely over. Instead, most diversified telecommunication services are integrated in the emerging information sector. Finally, the very notion of telecommunication as an "infrastructure" is put in question for the first time in Eastern Europe. We start to address the two relevant policy issues: modes of regulation, and science and technology policies to accompany the restructuring process.

The Nature, Timing and Impact of Broadband Policies: a Panel Analysis of 30 OECD Countries

We empirically investigate the impact of a vast array of public policies on wireline broadband penetration through a novel and unique dataset covering 30 OECD countries, over 1995-2010. We find that while both supply and demand-side policies have a positive effect on broadband penetration, their relative impact depends on the actual stage of broadband diffusion. When an advanced stage is reached, only demand-side policies appear to generate a positive and increasing effect. Moreover, both technological and market competition play a positive role, and the effect of the latter shows a non-linear path along the stage of market development. Finally, the relative weight of the service sector in the national economy reveals to be crucial for broadband penetration. Our analysis provides new insights into the policy debate and in particular on the rationale of a selective policy design for broadband penetration and, in perspective, for the rollout of next-generation networks.telecommunications policies, broadband penetration, infrastructure investments