What What Ca Can Lat Latin Amer America ca Learn From t om the - - PowerPoint PPT Presentation

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What What Ca Can Lat Latin Amer America ca Learn From t om the - - PowerPoint PPT Presentation

Mar 17, 2024 656 likes •888 views

What What Ca Can Lat Latin Amer America ca Learn From t om the S. S.E. E. As Asia a Eco Economi mic c Mi Miracle? ? Dr. Robert D. Atkinson President, ITIF April 1, 2016 @robatkinsonitif @ITIFdc ITIF: Who We Are

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SLIDE 1

@ITIFdc What What Ca Can Lat Latin Amer America ca Learn From t

  • m the S.

S.E.

  • E. As

Asia a Eco Economi mic “ c “Mi Miracle”? ”?

  • Dr. Robert D. Atkinson

President, ITIF April 1, 2016

@robatkinsonitif

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SLIDE 2

ITIF: Who We Are

The Information Technology and Innovation Foundation is a think tank at the cutting edge of designing innovation policies and exploring how innovation drives boost growth and competitiveness. ITIF focuses on:

  • Innovation processes, policy, and metrics,
  • Internet, big data and ICT policy,
  • Tech, productivity, and jobs,
  • Science and tech policy, and
  • Innovation and trade policy.
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SLIDE 3

Rapid S.E. Asian Growth

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SLIDE 4

Rapid S.E. Asian Growth

GDP Growth (1978-1994)

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SLIDE 5

What Was the Asian Tiger’s Goal?

  • Shift to high value-added tradable production (heavy

industry and then tech)

  • Through export-led growth (the opposite of import

substitution)

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SLIDE 6

What Was Their Strategy?

  • To increase firm size for learning and scale economies
  • To be a “fast follower” & not about “new-to-world

innovation”

  • Attack low margin production that the leaders wouldn’t

defend and then use that to gradually work their way up the value chain

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SLIDE 7

Asian Tiger Tactics: Exporters

  • Subsidized exports (exchange rates, forced savings

and directed low interest rates; subsidized loans and grants, limited entry and allowed cartels, kept domestic prices high; export assistance offices)

  • Limited imports (exchange rates, tariffs, informal

pressures to buy domestic, limited government procurement)

  • But were open to capital goods imports (tried to keep

capital goods prices low)

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SLIDE 8

Asian Tiger Tactics: Technology

  • Focused on acquiring foreign knowledge
  • Supported tech institutes:
  • Tai

aiwan an: China Productivity Center, Industrial Technology Research Institute

  • Korea
  • rea: Korean Productivity Center; Korean Industrial Research Institute
  • Scientist and engineering training
  • R&D support: for research universities and applied research. (Korean R&D was

450 times higher in 1978 than in 1999)

  • Tightly linked R&D strategy to needs of key industries
  • Technical extension and support services
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SLIDE 9

MNC Strategy

  • Some focused on domestic firms (Korea, Taiwan,

Japan)

  • Others focused on attracting MNC FDI (China,

Singapore)

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SLIDE 10

The Special Case of China

China’s vast and growing market gives it unique leverage:

  • A weapon to force investment and technology transfer
  • Immunity to MNC investment pull-out allows it to

engage in mercantilist behaviors

  • Strategy shifted from MNC attraction to indigenous

innovation

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SLIDE 11

Is the Strategy Replicable for Latin America?

  • Overcapacity in heavy industry (26% in steel globally)
  • Regional tech supply chains already established.
  • Global capital markets (harder to suppress interest

rates and force savings)

  • Do not have labor cost advantage to build from
)
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SLIDE 12

Is It the Right Strategy for Latin America?

countries with the deepest local technological capabilities -- were selective on, even 1995-2015
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SLIDE 13

East Asian “Dual Economy”

  • Japan’s productivity levels compared to U.S.
  • Retail 49%
  • Construction 40%
  • Food-processing 33%
  • Korean annual productivity growth (2000 to 2009)
  • Agriculture 5.4%
  • Manufacturing 6.5 %
  • Transport, storage and communications (0.3%)
  • Finance, real estate and business services (-0.3%)
  • Korean service sector productivity is just 45% of manufacturing

levels, compared with an OECD average of 86%

  • 87% of Korean jobs are in small business (firms with less than

300 workers) (44% in U.S.)

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SLIDE 14

Is the Shift Strategy the Right One?

↓ ↑

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SLIDE 15

Growth Within Sectors Matters Most

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SLIDE 16

Is it Better to Cook the Tech, or Eat it?

  • Over 80% of benefits from ICT in the U.S. are related

to its use by organizations, rather than its production by the ICT industry

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SLIDE 17

What to Do?

  • Be

e open t

  • pen to
  • trade and

ade and invest nvestment ent, especi especial ally in capi n capital al goods goods indust ndustries es

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SLIDE 18

ITA Expansion Benefits Developing Countries

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Philippines Malaysia China Thailand Indonesia India Vietnam Brazil Argentina Chile

ICT G T Goods

  • ods Expor

xports as P s as Per ercent centage age of

  • f Tot
  • tal

al Goods

  • ods Expor

xports, s, 2 2009

ITA Mem ember er Non-ITA Mem ember er

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SLIDE 19

Change hange in I n ICT T Ser ervi vices E ces Expor xports as % s as % of

  • f Count
  • untry’

y’s S s Ser ervi vices E ces Expor xports, s, 1996-2010 2010

  • 200.0%
  • 150.0%
  • 100.0%
  • 50.0%
0.0% 50.0% 100.0% Malaysia China Philippines India Argentina Indonesia Brazil Chile

IT ITA Me Memb mber Non

  • n-IT

ITA Me Memb mber

ITA Expansion Benefits Developing Countries

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SLIDE 20

What to Do?

  • Be open to trade and investment, especially in capital

goods industries

  • Speci

ecial alize e

  • Suppo

Support STEM STEM

  • Pro

rovid ide in incentiv tives fo for r univ ivers rsitie ities to to w work rk w with ith in industry try

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SLIDE 21

ICT Development vs. Deployment Policy Matrix

Suppor upports “S s “Silicon con Val alley” ey” Hurts rts “Silic ilicon Val alley” ey”

Su Supports

  • rts

ICT ICT Econ Economy

  • my
  • Tax

ax i incen centives es for

  • r ICT ad

adop

  • ption
  • n
  • IC

ICT s skills ills dev evel elop

  • pmen

ent

  • Open

en d dat ata a pol

  • lici

cies es

  • Tax

ax i incen centives es for

  • r ICT ad

adop

  • ption
  • n
  • Broadba

dband nd de depl ployment nt suppo upport

  • Mo

More re spect ectrum

  • Dig

igita ital lite l litera racy polic licie ies

  • E-gov

gover ernmen ent, incl cluding g e-procu

  • curmen

ent

  • Dig

igita ital tra l transfo forma rmatio tion stra trate tegie ies (tra (transporta rtatio tion, h health lth car care, e, et etc. c.)

  • Support

rt IC ICT pla latfo tforms rms (mo (mobile ile pay aymen ents, dig igita ital sign gnat atures es, et etc. c.)

  • Dig

igita ital l Sin ingle le Ma Mark rkets ts

Hu Hurts ICT rts ICT Econ Economy

  • my
  • IC

ICT T Tariffs riffs

  • Dat

ata cen a center er l local

  • calizat

ation

  • n req

equirem emen ents

  • Local
  • cal con

conten ent r req equirem emen ents

  • Procu
  • curem

emen ent pref efer eren ences ces f for

  • r dom
  • mes

estic c com compan anies es

  • ICT T

Tax axes es

  • Cros
  • ss B

Bor

  • rder

er Dat ata F a Flow

  • w Limits

imits

  • Lab

abor

  • r m

mar arket ket regu egulat ation

  • ns
  • Prod
  • duct

ct m mar arket ket regu egulat ation

  • ns (e.

e.g. g., ba ban o n on n Ube ber)

  • Stric

trict t priv rivacy re regula latio tions

  • Limits

imits on

  • n FDI

DI

  • Smal

all busines ess p pref efer eren ences ces

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SLIDE 22

@ITIFdc Thank You!

Rob Atkinson | ratkinson@itif.org | @robatkinsonitif