Falling behind or catching up? Developing countries in the era of globalization

Globalization improves the prospects for developing countries (DCs) to catch up economically with industrialized countries. But not all DCs will automatically benefit from globalization. Some DCs even face the risk of being delinked from the international division of labor. Differences in DC economic policies ultimately determine whether there will be a deepening divide between rich and poor countries in the world economy. Many observers draw an overly pessimistic picture of the perspectives of DCs in the era of globalization because of missing institutionalized links to regional integration schemes in Europe and North America, a low level of interfirm technology cooperation between industrialized countries and DCs, and a high concentration of foreign direct investment (FDD flows on only a few DC hosts. However, such concerns are largely unfounded: Asian DCs are most successful in globalization although they have remained outside institutionalized integration schemes, while ACP countries have not made much progress despite their preferential access to EU markets. Technology transfers between industrialized countries and DCs mainly occur through FDI and trade in capital goods, rather than through interfirm technology cooperation. Recent trends in FDI and international trade strongly support the proposition that DCs have become closely integrated into globalization strategies. A high concentration of FDI flows on a few DC hosts does not imply that new attractive locations cannot compete for international capital. Admittedly, it is true that between two thirds and three quarters of total FDI flows to DCs have persistently been absorbed by ten host economies. But the country composition of this group has changed over time. Globalization implies an increase in international investment cooperation. Case studies for selected DC industries show that FDI prevails in industries applying sophisticated technologies, whereas licensing and subcontracting are favored when production processes are standardized. Policy interventions may limit the choices open to investing foreign firms and, thereby, cause substitution effects between different forms of globalization or hinder globalization at all. The quality of DC economic policies determines whether these countries will succeed in joining the globalization club. The experience of the frontrunners among DCs suggests some basic policy conclusions: Openness towards world markets is a precondition for becoming involved in globalization strategies of transnational corporations. Liberalizing all forms of international investment cooperation and removing barriers to international trade should rank high on the policy agenda of DCs. Under conditions of globalized production, DC governments are increasingly constrained in pursuing policies of their own liking. Those DCs characterized by pronounced macroeconomic instability are relatively unattractive locations for international investors. Investment in physical and human capital plays a crucial role in enabling DCs to participate in globalization. Economic policies that discourage domestic saving and investment must be avoided. Financial market reforms are needed in DCs characterized by financial repression and inefficient intermediation between savers and investors. A better education of the workforce is required for a successful application of new technologies that become available through globalization. --

General Purpose Technologies and Productivity Surges: Historical Reflections on the Future of the ICT Revolution

Presented to the International Symposium on ECONOMIC CHALLENGES OF THE 21ST CENTURY IN HISTORICAL PERSPECTIVE, Oxford, England, 2nd-4th July, 1999 Celebrating the Scholarly Career of Charles H. Feinstein, FBA. Re- examination of early twentieth century American productivity growth experience sheds light on the general phenomenon of recurring prolonged swings in total factor productivity (TFP) growth rate experienced in the advanced industrial economies. After a “productivity slowdown” lasting more than a quarter of a century (during which TFP for in the manufacturing sector grew at less than 1 percent per annum, industrial TFP surged to average 6 percent per annum during 1919-29. This contributed substantially to the absolute and relative rise of the US domestic economy’s TFP residual, and in many respects it may be seen as the opening of the high-growth era that persisted into the 1970s. The productivity surge marked the culminating phase in the diffusion of “the dynamo” as a general purpose technology (GPT); that saw a shift in the underlying technological regime brought about by the implementation of critical engineering and organizational advances originating in some two decades earlier. Closer analysis reveals the significant concurrence of the factory electrification movement in this period with important structural changes that were taking place in US labor markets; in addition, there were significant complementarities between managerial and organizational innovations and the new dynamo-based factory technology, on the one hand, and, and the reinforcement of both kinds of innovation by the macroeconomic conditions of the 1920s. This more complicated, historical view of the dynamics of GPT diffusion is supported by comparisons of the US experience of factory electrification with the developments taking place in Japanese industry during the 1920’s, and in the UK manufacturing sector during the 1930’s. Concluding sections of the paper reflect on the analogies and contrasts between the historical case of a socio-economic regime transition involving the electric dynamo and the modern experience of the information and communications technology (ICT) revolution. Our formulation the GPT concept in explicitly historical terms contributes to explaining the paradoxical phenomenon of the late twentieth century productivity slowdown in the US. It also points to some contemporary portents of a future phase of more rapid ICT-based growth in total factor productivity.

The Responsibility of the RuleMaker: Comparative Approaches to Patent Administration Reform

Patent administrators across the globe currently face the most challenging operating environment they have ever known. Soaring application rates, lean fiscal policies and an increasingly ambitious range of patentable subject matter are among the difficulties faced by the world\u27s leading patent offices. These trends have resulted in persistent concerns over the quality of issued patents. Responding to recent writings questioning the value of maintaining high levels of patent quality, Professor Jay Thomas asserts both that patent quality matters, and that increasing the responsibilities of patent applicants provides a fair and efficient mechanism for improving patent office work product. This Article then assesses recent reform agendas pursued by the European Patent Office, Japanese Patent Office and U.S. Patent and Trademark Office that have elevated applicant obligations. After distilling broader policy trends from these distinct programs, Professor Thomas presents several proposals for patent administration reform

Banking and payment system stability in an electronic money world

Electronic funds transfers ; Payment systems

Capabilities of technology utilization and technology integration : Impact of 3D technologies on product development process and performance

Multi-functional technologies widely influence on organization and often require organizational technology integration capabilities to achieve the total effectiveness. Technology integration capability here implies not only utilizing technologies in the present setting of organizational environment but also reforming organizational process and structure towards total optimization. This paper aims to exam technology integration capabilities among Japanese and Chinese firms through questionnaire surveys regarding impact of 3D technologies on product development process and performance. The results indicated that Japanese companies improved their total performance with process reformation leveraged by 3D technologies; however, among Chinese companies, no significant relationships were observed among 3D technology usage, process reformation and the total performance improvement although they improve the partial performance such as manufacturability by utilizing the technologies. Chinese companies, which have a huge growing market and are on the process of rapidly improving their productivities without strong organizational inertia, could have enough advantage by utilizing technologies to improve the partial performance. On the other hand, Japanese companies, which compete in mature market and have already had highly efficient organizational process, could not find the merits of technology usage without technology integration capabilities. This would be regarded as disadvantage of process-advanced company that they cannot have enough incentive to introduce advanced technology and new entries have a chance to leap-frog the advanced companies in usage of technology in general.

Limiting the Business Method Patent: A Comparison and Proposed Alignment of European, Japanese and United States Patent Law

That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition…

Information technology: futurism, corporations and the state

The significance of information technology (IT)' lies in the breadth of its potential impact on society: on work, communications, political processes, education and entertainment. It offers not just the possibility, in the current economic crisis, of restructuring work in order to gain greater control over that process the better to increase productivity, but also the possibility of a new cycle of growth in both capital and consumer goods, facilitating the restructuring of modes of consumption and the strengthening and recomposition of capital over patterns of leisure, communication and entertainment