EXPORTS OF MANUFACTURES BY DEVELOPING COUNTRIES: EMERGING PATTERNS OF

TRADE AND LOCATION

Author(s): SANJAYA LALL
Source: Oxford Review of Economic Policy , Summer 1998, Vol. 14, No. 2, TRADE AND
LOCATION (Summer 1998), pp. 54-73
Published by: Oxford University Press

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

EXPORTS OF MANUFACTURES BY
DEVELOPING COUNTRIES: EMERGING
PATTERNS OF TRADE AND LOCATION

SANJAYA LALL
Queen Elizabeth House, Oxford1

Developing countries are rapidly increasing their shares of manufactured trade, not just in labour
products, but also in capital- and skill-intensive ones; their shares are rising particularly rapidly
technology area. However, manufactured exports remain highly concentrated in the developing w
few countries dominating all forms of export. Within the successful exporting countries, there are s
differences in the 'technology content' of exports. These trends are difficult to explain with receive
theory, even taking human capital into account, or with reference to broad economic policies: it i
bring in 'learning ', along with scale economies, increasing returns, and agglomeration as determ
comparative advantage. These factors imply market failures, and so a role for policy in developin
comparative advantages. This article suggests that emerging trade and location patterns in the d
work are explained by market imperfections and government policies to overcome them.

I. INTRODUCTION man capital) predicts that, given their relative abun

dance of (unskilled) labour relative to capital, their
Developing countries have emerged as important
comparative advantage will lie in products that
exporters of manufactures in recent years, moving
require more labour (and lower skills). Despite its
away from their traditional role of providers of
simplifying assumptions (no scale economies, iden
primary and processed natural resources.ticalTheir
production functions and tastes across coun
traditional comparative advantage needs notries,
theo full access to technology, no learning costs or
retical explanation. In manufactures, the basic differentiation, international factor im
product
Heckscher-Ohlin (H-O) model (later including hu
mobility, etc.), the model seems to explain much

1 I am very grateful to the referees and to Andrea Boltho, Don Keesing, Ashoka Mody, Carlo Pietrobelli, and Larr
for valuable comments. I also wish to thank the World Bank for providing access to the UN trade database and helping t
the data. I alone am responsible for all errors of omission and commission.

54 © 1998 OXFORD UNIVERSITY PRESS AND THE OXFORD REVIEW OF ECONOMIC POLICY LI

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 S. Lai I

of the developing countries' advantage in manu endowments by levels of development (Balassa,

factures. 1986). With rising incomes, endowments of (physi
cal and human) capital grow and comparative ad
This theory explains three other aspects less well.vantage shifts to more complex products: faster
growing countries move further up the technology
• First, growing exports by developing countries of and skill scale. This goes some way, but the assump
complex industrial products, which involve large tions of the model remain constricting in the devel
scales and advanced organization of production,oping country context. Though physical capital en
high levels of skill- and capital-intensity, sophis dowments may rise directly with income, the rela
ticated and fast-moving technologies, intensetionship between this and skill (and technology)
inter-industry linkages, and brand differentiation.development is unclear, particularly if technology
Simple wage-cost advantages, especially in un and information markets do not work efficiently.
skilled labour, do not count for much here, yet this
is where developing countries are increasing Wood (1997) has an interesting variant. Allowing
their market shares fastest. for international capital mobility, capital-labour en
dowments cease to determine trade patterns; com
• Second, the enormous concentration of export parative advantage depends on endowments of
activity in the developing world, with a few other immobile productive factors. Wood uses natu
countries dominating both simple and complex ral resources and skills; unskilled labour is thought
manufactured exports. insignificantfor manufacturing competitiveness. Skill
relative to natural resource endowment then deter
• Third, large, often increasing, differences in the mines manufactured export success. This focus on
'technology content' of exports. Technology skills is realistic, and the model takes the explanation
content can take two forms: the share of com of export patterns further (of course, skills have a
plex versus simple manufactures in the export
long tradition in trade theory, e.g. Keesing, 1966).
basket, and the local technological content of theDespite its empirical appeal, however, it does not go
manufacturing process involved. While both havefar enough for our purposes. It retains the H-O
risen over time, the patterns of change haveassumptions on free access to technology and its
differed greatly, across the developing world as costless absorption and deployment, and ignores the
a whole and within the group of successful
possibility of market failures in the process of
exporters. technological learning.

Three sets of explanations may be advanced. First,
a statistical one: complex manufactured exports
from the developing world are an illusion; the data
simply capture labour-intensive processes in the
assembly of advanced products. The skill- and
technology-intensive processes remain in industrial
ized countries: the H-O theory still applies. This is
true of a significant part of developing country
exports, but not of the whole—there are many
capital-, technology-, and skill-intensive processes
in exports by developing countries, and there is
significant technological effort underlying both sim
ple and complex exports.
Second, accepting that 'genuine' comparative ad
vantages exist in complex products, we can analyse
it within the H-0 (perfect competition) assump
tions. Instead of treating developing countries as a
homogeneous group, we can differentiate factor
Third, we can take market imperfections directly
into account. There are two approaches that use
increasing returns, information deficiencies, exter
nalities, uncertain learning, and so on to explain trade
patterns. One, from 'strategic' trade theory and
'new economic geography', relies on scale econo
mies, cumulativeness, and agglomeration externali
ties to explain the location of activity (Krugman,
1986,1991; Venables, 1996). The other, from infor
mation and evolutionary economics, deals with how
information markets work and how technology is
created and used. It argues that there are wide
spread and diffuse market failures in information,
making optimal allocation under free markets im
possible. In using technologies efficiently, develop
ing country firms face high costs in acquiring infor
mation, and costly, prolonged, and uncertain learn
ing processes in mastering its tacit elements. These
processes involve spillovers and interlinkages across

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

Figure 1
Values of World Exports ($ billion)

—X
-x—

1980 1985 1990 1995 1996

- Total —Primary products —A

Source: Calculated from United Nations COMTRADE database.

firms and activities (Nelson and Winter, 1982; Packoping countries. Industrialized countries com
andWestphal, 1986; Lall, 1992; Stiglitz, 1994,1996).
the OECD (and Israel) with the exception of
The efficacy of learning is a critical determinant Mexico,
of and Turkey. Developing countries i
competitiveness: the process that is assumed away the Asian 'Tigers' (Hong Kong, Singapore, K
in neo-classical trade theory takes a central role in
Taiwan), Mexico, Turkey, South Africa, and M
deciding comparative advantage. East oil producers.

Once market failures are admitted, the analysis

Figure 1 shows values of world exports ove
becomes more complex. History, serendipity, 96.2
and Manufactures were the main componen
the driver of growth; primary products sta
policy, all difficult to model, start to play important
roles. The role of government, in particular, changes
throughout. The early 1980s saw little growth;
from a distortionary one (by assuming efficient was a sustained boom after 1985, with some
markets) to a (potentially) justifiable one. We argue
ing off in the 1990s. Developing countries incr
that this role is crucial to understanding tradetheir
pat exports of manufactures from $102 to
terns in the developing world. billion in this period; growth rates were 14 per
for developing and 6.6 per cent for the indu
countries (Figure 2). Developing countries
In the following, we look first at facts, then provide
faster in each sub-period except 1996, w
explanations, and conclude with policy implications.
significant slow-down in trade affected deve
more than industrial countries.
II. PATTERNS OF INDUSTRIAL
EXPORT SUCCESS We now classify exports by technological charac
teristics. Any such classification faces problems:
(i) Definitions and Broad Patterns the data (3-digit SITC level) are fairly aggregated,
and may conceal variations in technologies between
The UN trade data used have gapssub-groups;
on several the technological features of a product
countries (particularly in Africa and Central
may differ Asia),
across countries (e.g. semiconductors
but cover all major exporters in recentcanyears. We
be a high-technology export from USA but a
divide exporters between industrialized and devel
low-technology one from Malaysia, where they are

! All the data shown in Figures 1-8 and in all the tables come from the United Nations COMTRADE database.

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 S. Lai I

Figure 2
Growth Rates of Manufactured Exports

World Industrial Developing

□ 1980-5 □ 1985-90 ■ 1990-5 ■ 1995-6

Figure 3
Shares of Technological Categories in World Manufactured Trade (%)

1980 1985 1990 1995

□ RB ■ LT □ MT □ HT

assembled); products,
technological
dyes, leather (not leather products), rub
change over ber and cellulose products,
time, andand organic chemicals.
so on
use of the LT includes labour-intensive
data provides manufactures such as a
broad trends. textiles, garments, footwear, toys, simple metal and
plastic products, furniture, and glassware. MT has
We use a four-fold technological categorization: complex but not fast-moving technologies (though
resource-based (RB), low-technology (LT), me some entail considerable engineering and design
dium-technology (MT), and high-technology (HT) effort): automotive products, chemicals, industrial
manufactures. RB includes processed foods andmachinery, and simple consumer electronics. HT
tobacco, simple wood products, refined petroleum includes fine chemicals, pharmaceuticals, complex

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

Figure 4
Rates of Growth by Technological Categories (% p.a.), 1980-96

1980 1985 1990 1995 1996

□ RB ■ LT □ MT E3 HT

Figure 5
Growth Rates of Exports (% p.a.), 1980-96

Total
11 RB

■
LT

Total
MT HT

■Industri

electricalrily
and on
elect
re
precision instrume
cific analy
dicts that developin
est comparative
Figure ad
3 s
in HT, because
world the
man
lowest, and the
growth. latIn
capital and/or sk
technolog
vanced technologie
shares dec

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 S. Lall

Figure 6
Shares of Developing Countries in World Exports (%)

35

30

25 -

20 -

15

10 -

TOTAL RB LT MT HT

□ 1980 ■ 19%

a rise in HT. From being the smallest category in

products or technologically more demanding proc
1980, HT surpasses RB by 1985 and LT by 1996.esses. Moreover, there are large differences in
Most manufactured trade is in MT, but it loses share
efficiency between countries in making the same
(1.4 points) over the period. Under present trends,
product, because of different efforts in technologi
HT will soon exceed MT. cal and managerial learning (Mody et al., 1995, have
a detailed case study). Even in 'simple' technolo
Developing countries have higher growth rates than
gies, in other words, competitiveness depends on the
industrial countries in each category (Figure 5), extent
their and efficacy of efforts to master, adapt, and
improve upon technologies.
lead increasing with technological complexity (from
2.2 percentage points for RB to 11.3 points for HT).
The all
By 1996, they held 23 per cent of the market for industrialized world's smallest loss of share is in

manufactured exports, up from 9.8 per cent in RB,

1980its largest in HT. In MT, which now appears to
(Figure 6). Their highest share, not surprisingly,be
is its
in main area of competitive strength, it still holds
90 per cent of world markets. This is not because
LT, but in HT their share (over 30 per cent) is only
4 points lower and growing much faster. 'high' technologies are easier for developing coun
tries to learn than 'medium' technologies, but be
cause of other technological features. MT is domi
The developing world's large gain in LT is expected;
nated by technologically demanding, scale- and
what is surprising is that high-wage countries retain
linkage-intensive
two-thirds of the LT market. This is due partly to products such as automobiles,
machinery,
discrimination in industrial countries against LT or chemicals, where reaching world
levels
imports from the developing world, but mainly to the of competence requires long learning periods.
fact that not all LT products are 'simple' to manu
Engineering products also need strong local supplier
facture. High-wage countries retain a lead in bases
ad (increasingly so with just-in-time production
systems). And many are 'heavy', with high weight
vanced functions (e.g. design of fashion garments)
to-value ratios, and so uneconomical to place in
or complex stages of production; and they offset
wage-cost disadvantages by having higher levels distant
of areas. All these make it difficult to relocate
skill and technical or organizational efficiency. MT
Therein developing countries simply to take advan
is a similar spread in LT within the developingtage of low wages; only a few developing countries
have the learning or industrial base to meet the
world, some exporters specializing in higher-quality

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

needs of efficient production. By contrast, in HT,policies, institutions, and skills to manage technologi
especially electronics, while core production proc cal learning (Lall, 1995).
esses and product design are complex, final assem
bly is often low-skill and labour-intensive. FallingThe dominance of Asia is highest in HT and LT, but
transport and communication costs and low weightpersists through all technological categories. Over
to-value ratios make relocation in developing coun the period, Asia loses market share to LAI in all
tries increasingly economical (Yeats, 1998). Thiscategories except RB, where both gain at the
implies that the competitive edge of industrialexpense of the other regions. The highest gains in
countries in innovation and high skills has notshare for LAI are in MT and RB. In LT, Asia also
eroded; the real erosion is in labour-intensive, 'sepaloses share to the Middle East, where Turkey and,
rable' processes across the manufacturing specto a lesser extent, Morocco and Tunisia become
trum. significant exporters of textiles and garments to
Europe under special access provisions.
However, relocation of simple processes does not
explain all complex exports from developing coun Figure 7 shows the 1996 regional export struc
tries. An important, and increasing, part of their HT ture. Asia is dominated by HT (the only region for
(and MT) exports is based on 'deeper' local capa which this is so), LAI by MT (automobiles and
bilities, with significant domestic inputs of inter intermediates), and LA2 (Latin America excluding
mediates, capital goods, design, engineering, and Mexico) by RB, with a very low share of HT. SSA1
research. In some cases, this applies to new export has a strong position in LT (Mauritian garments) and
oriented activities, in others, it applies to import MT (South African machinery and intermediates);
substituting industries that have reoriented and up SSA2, by contrast, has an overwhelming share of
graded in response to trade liberalization. In allRB. In growth rates (Figure 8), Asia has the highest
cases, however, it involves local learning; and learn for all manufactures (16.9 per cent), followed by
ing in complex technologies tends to be more demand LAI (12 percent) and SSA1 (11.6 per cent). SSA2,
ing of skills, duration, costs, technical effort, and inter on the other hand, has a decline (-6.1 per cent
firm and inter-industry linkages than that in LT. between 1985 and 1995).3 Asia has the highest
growth rates in each category with the exception of
SSA1, where the small base and the expansion of
(ii) Regional Patterns in Developing Countries
South African post-sanction exports produce higher
Data on developing regions' shares of manufac rates.
tured exports (Annex Table 1) reveal intense geo
graphical concentration. Asia dominates with nearly
(iii) Country-wise Performance
80 per cent of the total (the weighted average of
individual categories) in 1980 and 1996. LAI (Latin We focus on the 12 leading developing country
America including Mexico) is a distant second, exporters: in Asia, the four Tigers (Hong Kong,
accounting for under a fifth, but raises its share over Singapore, Korea, and Taiwan), the three New
the period at the expense of SSA (Sub-Saharan Tigers (Indonesia, Malaysia, and Thailand), India,
Africa) and ME (North Africa and Middle East). China, Argentina, Brazil, and Mexico. Table 1 shows
SSA1 (Sub-Saharan Africa including South Africa their total manufactured exports, and Table 2 its
and Mauritius) suffers significant losses of markettechnological structure; Annex Table 2 gives data
share in total and in all categories, while SSA2 on each category. These countries account for 92
(excluding these two. 'outliers') practically disap per cent of total LDC (less developed country)
pears except for RB, where it contributes under 1 manufactured exports in 1996 (compared to 78 per
per cent. This is despite very low wages and cent in 1985); the top three account for 43 per cent,
widespread trade liberalization in Africa. Rapid the top four for 56 per cent, the top five for 65 per
exposure to world markets, under structural adjust cent, and the top ten for 88 per cent. The analysis of
ment, has been insufficient to stimulate industrial exports by developing countries devolves to explain
exports in much of Africa, in the absence of the ing what happens to these few leaders.

1 Full data for 1996 are not yet available.

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 S. Lall

Figure 7
Export Structures, 1996 (%)

60

LA2 SSA1 SSA2

□ RB H LT □ MT □ HT

Figure 8
30 Export Growth by Regions, 1985-96
Export Growth by Regions, 1985-96(%
(% p.a.)
p.a.)

25

|
20

-10
-5
tl ll ii ll
-
Asia LAI LA2 SSA1

TJ
■ S >A2*

I Total DRB SLT DMT E3HT

Note: Total figure for SSA2 is for 1985-95 only.

Reflecting global trade cycles, the groupSome

had historical
faster background can help explain the
growth in the late-1980s than before ordiffering
since. Thepatterns and underlying learning proc
1995-6 slow-down was particularly marked
esses. Takefor
the major groups in turn.
Hong Kong (stagnating in any case), Thailand, and
Korea, but all suffered. Singapore held up the best
Tigers
among the Tigers and Indonesia among The the New
first countries to launch export-oriented manu
Tigers. Mexico enjoyed a 20 percent growth (still
facturing, the aAsian Tigers, adopted outward-look
ing policies in
decline from its previous rate). The slow-down in the early 1960s (Hong Kong was
the New Tigers was not, as thought in the region,
always a free trader) and led the first wave of LT
assembly
due to competition from China—China slowed downexports: garments, textiles, toys, foot
like the rest. wear, and the like. Over the 1970s and 1980s, they

6,
~

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

Table 1

Largest 12 Developing Exporters of Manufactured Products

Country Values (US$m) Growth rates (% p.a.)

1980 1985 1996 1980-5 1985-90 1990-5 1995-6

Hong Kong 12,750 15,478 25,211 4.0 11.7 0.5 -8.7

Singapore3 14,328 18,492 114,528 5.2 21.0 17.5 6.3
Korea 14,890 23,317 111,155 9.4 20.0 13.9 -0.1
Taiwan 18,214 28,295 108,514 9.2 17.1 10.8 4.4
Indonesia 3,827 3,572 28,639 -1.4 25.4 18.5 10.5
Malaysia 5,949 8,317 67,140 6.9 20.0 25.2 5.8
Thailand 2,572 3,794 42,995 8.1 34.3 21.4 -1.6
China n.a. 13,380" 130,266 n.a. 23.lc 22.4 2.1
India 4,265 5,409 23,396 4.9 18.2 12.8 2.6
Argentina 3,113 3,501 11,098 2.4 12.6 11.6 1.2
Brazil n.a. 14,599 28,556 n.a. 5.5 8.0 2.2
Mexico n.a. 8,432 77,280 n.a. 9.9 36.7 19.5
Total 79,905 146,588 768,777 12.9 18.4 16.7 4.2
All LDCs 102,347 188,203 835,081 13.0 16.8 15.1 1.1

Notes:a Singapore's figure (unlike that of Hong Kong) includes re-exports, and involves some double
counting. However, re-exports are not large enough to alter the broad country distribution shown.
Singapore's own exports (60 per cent of its total) were $69 billion in 1996. Re-exports also do not
significantly affect Singapore's growth rates, since their share of the total has changed little over time (data
from Singapore government Website).b 1984. Data for total manufactured exports are not available for
China for 1980-3 or for 1985.c Growth for 1984-90.

Table 2

Structure of Manufactured Exports by Leading Developing Countries (%)

1985 1996

RB LT MT HT RB LT MT HT

Hong Kong 2.1 64.3 14.2 19.3 4.4 52.7 14.0 28.9
Singapore 42.3 10.8 14.6 32.3 12.7 7.9 14.0 65.4
Korea 7.8 59.9 12.2 20.1 9.4 28.4 26.6 35.7
Taiwan 8.7 57.3 13.3 20.7 5.1 33.9 20.2 40.9
Indonesia 72.2 19.2 5.9 2.8 34.9 41.9 8.5 14.7
Malaysia 53.7 9.7 5.5 31.0 17.8 13.1 8.7 60.4
Thailand 42.1 38.2 6.6 13.1 14.5 35.6 13.5 36.3
China 11.7a 57.1a 21.8a 9.4a 9.8 56.3 13.4 20.6
India 40.3 46.1 10.6 3.0 31.1 52.3 13.1 4.4
Argentina 67.5 15.6 11.8 5.1 49.1 18.8 28.8 3.3
Brazil 32.6 33.3 27.1 7.1 25.6 31.8 34.0 8.6
Mexico 20.2 15.0 29.2 35.6 7.1 20.9 35.2 36.9

Note\a 1990 figures.

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 S. Lall

upgraded their export structures in different ways

prise dominated structure with an array of technol
and moved into more complex products. In Hongogy, training, finance, and export marketing policies
Kong, once the leader in the developing world inand institutions (Wade, 1990; Lall, 1996). The gov
manufactured exports, there was quality improveernment also played a critical coordinating role in
ment in the same products, but its laissez-faire high technology activities, importing technologies,
policies led to relatively little structural deepening.
adapting them, and forming 'alliances' with private
As a result, with rising wages, most manufacturing firms to diffuse and utilize them (Poon and Mathews,
shifted to lower-wage countries, and industrial and 1997). In both countries, industrial policies were, to
export growth stagnated or turned negative. Thecite a magisterial paper by Westphal (1997, p. 10),
export structure remained at low-technology levels, 'a carefully crafted combination of selective inter
the lowest among the Tigers. ventions and reliance on market forces'. They were
clearly and single-mindedly directed at furthering
In Singapore, by contrast, there was considerabledomestic technological learning.
deepening, allowing the country to combine rising
wages (nearly 20 per cent higher than in HongAs a result, Korea and Taiwan have the greatest
Kong) with continued output and export growth.technological depth in the developing world, and
Singapore moved rapidly from LT to petrochemitheir exports embody the most intense learning. This
cals and then producer electronics and equipment,has been supported by the massive investments in
simultaneously raising its technological levels fromR&D and technical skills. Take two indicators (data
simple assembly to high end manufacturing, design, from Lall, 1998). First, R&D financed by industry
and development. The process was dominated by as a proportion of GDP: by 1995, Korea was the
multinational companies (MNCs), which providedhighest in the world (2.27 per cent), surpassing
state-of-the-art technologies and access to their Japan (2.0 per cent), the United States (1.5 per
global networks. This gave Singapore the most hicent), and European technological leaders (Ger
tech export structure in the developing world, thoughmany 1.4 per cent, Sweden 1.9 per cent, and
its research base remained relatively small and the
Switzerland 1.8 percent). Taiwan (with 1 percent)
sources of innovation remained overseas. The deepcomes second in the developing world, comparing
well with industrial countries (equal to the UK, and
ening was driven by strong industrial policy, using
foreign direct investment (FDI) targeting along with ahead of Denmark, Canada, Israel, The Nether
selective investments in skills, technology, and infralands, Austria, and Italy). Second, tertiary level
structure, all directed at meeting the specific needs students enrolled in technical subjects (science,
of the sponsored activities (Lall, 1996). mathematics, computing, and engineering) as a
percentage of the population: Korea again has the
In Korea and Taiwan, MNCs played a much smallerhighest in the world (1.55 per cent), followed by
role: domestic firms led the deepening and upgrad
Taiwan (1.09 per cent). Then come Germany (0.88
ing. Their governments used infant industry protec per cent), Spain (0.82 per cent), Israel (0.74 per
tion (offsetting its harmful effects by strong exportcent), and the USA (0.7 per cent). All these efforts
incentives), credit allocation and subsidies, FDI are closely tied to industrial targeting—R&D and
restrictions, and skills and technology support, to skill creation are directed at the activities being
induce them to enter difficult activities, raise local promoted (Lall and Teubal, 1998).
content, and take on advanced technological func
tions. Korea's interventions were very pervasive Other developing countries trail behind. Singapore is
and detailed, and involved fostering the chaebol, the third in industry-financed R&D (0.69 per cent);
conglomerates that spearheaded its heavy industry Chile is third in tertiary technical enrolments (0.67
and high technology drive, learned the most ad per cent), followed by Singapore (0.56 per cent).
vanced technologies, and became major multina Hong Kong has total R&D of below 0.1 per cent of
tionals in their own right (Pack and Westphal, 1986; GDP (the industry-financed proportion will be sig
Amsden, 1989; World Bank, 1993). Taiwan inter nificantly lower) and a tertiary technical enrolment
vened less directly in the industrial structure, though figure of 0.46 per cent, adequate for its low-technol
it used public enterprises to enter several heavy ogy export structure but not at the level of the other
industries. It supported its small and medium enter Tigers.

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2
New Tigers
Malaysia, Indonesia, and Thailand account for most
'simple' HT exports from developing countries.
They launched export-oriented strategies a decade
or two after the Tigers, relying heavily on FDI in
offshore assembly for export growth, first in simple
activities (some relocated from the Tigers) and later
in more complex products. Each took a different
path, with initial advantages of cheap, literate, and
disciplined labour, good infrastructure, welcoming
FDI policies, and strategic locations. Malaysia, the
earliest to launch export-oriented growth, was the
most MNC-dependent. It caught the semiconductor
assembly boom at its peak, then moved into various
electronic and electrical products; this accounts for
its high technology export structure. However, the
activity remains at low technological levels, with
moderate local content, a small skill base (technical
enrolments 0.14 per cent), and low technological
capabilities (industry-financed R&D of 0.17 per
cent, most of it in MNC affiliates). Thailand has a
lower proportion of HT activities and industry
financed R&D (0.02 per cent) than Malaysia, but
local firms are stronger in simple manufactured
exports. Indonesia, the latecomer in this group, has
the lowest technology content in its export basket
(technical enrolments 0.13 per cent and industry
financed R&D 0.04 per cent); MNC exporters
congregate in labour-intensive and resource-based
activities.
While there was industrial targeting in the New
Tigers, export activities operated fairly independ
ently of the rest in separate zones. Significant
learning took place in export activities, but the skill
levels were not high (though where more advanced
skills were needed, as in semiconductors in Malay
sia, MNCs invested in training facilities). Their
import-substituting sectors did not generally develop
world class capabilities. Skill and technology crea
tion was not geared to deeper learning needs. Thus,
their export growth in complex products was driven
by production-level learning in MNC-dominated
enclaves; in simpler products, local enterprises also
played important roles, particularly in Thailand.
China and India (the Giants)
China and India have long histories of protected
import substitution. China's export boom was led by
1 For a full explanation of maquiladoras, see Hanson's article in this issue.
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labour-intensive assembly activity by foreign (mainly
Hong Kong and Taiwanese) firms in Special Eco
nomic Zones, stimulated by cheap, productive, dis
ciplined, and literate labour and the 'Chinese con
nection'. Its export structure remains predomi
nantly low technology, and its technical skill (tech
nical enrolments of 0.13 per cent) and industry
technology base (industry-financed R&D of 0.11
per cent) seem unsuited to sustained upgrading. The
same applies to India, with a low-tech, stagnant
export structure, modest skill levels (high illiteracy
and tertiary technical enrolments of 0.12 per cent),
and low R&D (industry-financed R&D of 0.14 per
cent). Both economies, however, have pockets of
advanced capabilities in local manufacturers, with
concentrations of technical labour resources and
considerable experience of technological activity.
Their industrial structures have enormous depth, but
learning has been distorted by pervasive protection.
Latin America
Exports were stimulated recently by better macro
economic conditions, trade liberalization, and renew
ed FDI, particularly from previous import-substitut
ing (e.g. automobiles) and heavy intermediates (e.g.
processed foods, chemicals) industries. Mexican
exports benefited from the North Atlantic Free
Trade Area (NAFTA) (and devaluation and reces
sion). While Mexico had long been a base for
assembly in its maquiladoras,4 this had not pro
duced rapid export growth. NAFTA gave signifi
cant new privileges (e.g. local inputs now qualify,
when earlier only inputs imported from the USA
did), causing dramatic rises across all export cat
egories. The differences between the shares of
LAI and LA2 show the importance of Mexico in the
region's trade, especially in HT products. Without
Mexico, the Latin American export structure down
graded over time, with falling shares in MT and HT;
other Latin American countries have attracted little
HT assembly by MNCs.
Mexican learning is largely at the production level,
though some design is being launched by auto
MNCs. Despite its reasonable education base (ter
tiary technical enrolments of 0.45 per cent), techno
logical activity remains minuscule (industry-financed
R&D of 0.09 per cent), the result of rapid liber
alization, a tradition of relying heavily on imported
 S. Lall

technologies, and the legacy of import-substitution.
HT exports are based on low-wage assembly, with
minimal local physical or technological inputs (for
instance, local content is under 3 per cent in con
sumer electronics in the maquiladoras, compared
with 25-30 per cent in Malaysia, and over 80 per
cent in Korea or Taiwan). In MT exports, there is a
mixture of simple assembly (e.g. TVs) with deeper
local capabilities. The main example of the latter is
the automobile industry, where manufacturing and
supplier capabilities built up during import substitu
tion were upgraded by an infusion of new technolo
gies, driven by targeted policies of requiring exports in
return for import privileges while retaining protection.
Argentina and Brazil, despite their diverse industrial
bases from the days of import substitution, have low
export growth and very low proportions of HT
products. They have not been able to attract MNC
assembly to lead HT exports, and their technological
activity, like Mexico's, is too low (industry-financed
R&D is 0.05 per cent of GDP in Argentina and 0.08
per cent in Brazil) to allow domestic firms to develop
competitive advantages. Liberalization has led to
some industrial restructuring, but has been too rapid
to alio w firms to invest in difficult and risky learning.
Skill levels are relatively high in Argentina (tertiary
technical enrolments are 0.49 per cent), but not in
Brazil (0.19 per cent); but they are nowhere near
the expense of all others, especially the resource
based and low-technology groups. Medium-tech
nology products continue to retain the largest
share of trade, but may soon be overtaken by
high-technology products.
The location of export production is changing from
the industrialized to the developing countries. Ex
ports by the latter have grown rapidly and diversi
fied away from traditional resource- and labour
intensive products. They have grown faster than
industrialized country exports in all categories,
with the fastest relative growth in medium- and
high-technology products. However, the erosion
of competitiveness in the industrial world has
been lowest in medium-technology products.
Exports by developing countries are geographi
cally highly concentrated, with concentration
rising over time. The same few countries (three
of the mature Tigers, the three New Tigers,
China, and Mexico) dominate exports in all tech
nological categories, though with important dif
ferences in their export structures. Other devel
oping countries, the vast majority, remain mar
ginal to export activity, despite adopting more
liberal trade and investment policies. Africa, in
particular, is losing its already tiny shares of
manufactured trade.

Tiger levels. More important, skill creation has not

been integrated with the promotion of technology
development in export-oriented industries. As a
result, there is a regression of exports to resource
based advantages and to MT process industries
where capabilities were acquired during import
substitution (Benavente et al., 1997). Argentina
suffers a slight decline in its modest HT share over
time, from 5.1 per cent to a tiny 3.3 per cent, the
lowest in the whole group; Brazil is roughly similar.
Again, the major exception is automobiles, where
targeted programmes similar to Mexico's have
stimulated upgrading and exports.
III. SYNTHESIS AND EXPLANATIONS
(i) Stylized Facts
The evolving patterns can be simplified into
three broad patterns. The first, represented by
Korea, Singapore and Taiwan, is based upon
human and technological accumulation approach
ing or surpassing that in the industrial world. This
has allowed these countries to combine rapid
export growth with considerable diversification
and deepening of their competitive base. There
are sub-patterns: Singapore has a very advanced
export structure but relatively limited local inno
vative capabilities; the other two have greater
innovative capabilities, with Korea leading in
heavy-scale and technology-intensive activities,
and Taiwan in segments of electronics. In all
three cases, deepening and upgrading have been
driven by targeted industrial policy and comple
mentary investments in skills and technology.

• World trade in manufactured products displays a The second involves MNC-led exports on the
steady and significant move up the technology basis of cheap labour, with relatively low techno
scale, with high-technology products gaining at logical and physical inputs. Among the leading

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

exporters, this pattern is exemplified by the New These questions can only be answered by taking
Tigers and China, but much of the developing account of something assumed away in standard
explanations of comparative advantage: learning.
world's exports of labour-intensive products fall
into this category (in some countries, particularly Learning is a broad concept, and very different from
in Asia, LT assembly has had a strong role for'innovation'. It encompasses technology and man
local firms, working closely with foreign buyers). agement, and covers skill and knowledge develop
In South-east Asia, exports have moved from ment in all activities from investment to production,
low- into high-technology products, but not in engineering, R&D, and external linkages (Lall, 1992).
other second-rank exporters (e.g. Sri Lanka,Since technology has 'tacit' elements that require
Bangladesh, Mauritius, North Africa, or thethe accumulation of specific information and skills,
Caribbean, whose export structure remains stag learning is necessary for competitiveness in all
nant and concentrated in simple products, mainly activities, simple or complex. Learning takes place
garments). The growing specialization in HT hasin imperfect markets, with fuzzy or deficient infor
meant that the base of skills built up in the New mation, uncertainty, cumulative effects, increasing
Tigers is larger than in lower level assemblers. returns, and externalities. Learning is highly specific
Even in the New Tigers, however, skill creationto technologies: some are 'easier' (shorter, less
remains mainly at the production level; local risky, less costly and less prone to externalities) than
technological content is much lower than in theothers. Low-technology activities need learning, but
mature Tigers. the process is easier than in high-technology ones.

• The third pattern is in economies with largeThe nature of learning varies greatly by country,
industrial bases developed under import substitu depending on initial capabilities, the efficacy of
tion—Argentina, Brazil, Mexico, India, and China. markets and institutions, and the policies undertaken
Excluding exports owing to special market ac to improve them. Some countries lack the skill and
cess and offshore assembly, their manufacturedtechnical base to engage in modern manufactured
exports reflect competitive capabilities in com exports, except for the simplest ones (e.g. low
plex activities built earlier (e.g. automobiles andquality garments or toys) where foreign investors
chemicals in Latin America, pharmaceuticalsbring in the technology and provide the (minimal)
and machinery in India and China) that are being training needed. Some can take on more demanding
exploited now because of trade liberalization. assembly (electronics); some can tackle the manu
The technological base is, however, far nar facture of complex products (automobiles); and
rower than that of the Tigers, and its upgrading some can manage the design and development of
is not guided by the coherent and single-minded new technologies in advanced products. Their ca
policies that characterize the latter. In India, in pability differences determine the nature and dyna
particular, the trade and industrial regime re mism of comparative advantage (Pietrobelli, 1997).
mains distorted enough to prevent rapid export
growth. This framework provides useful insights on recent
trends. Take export concentration. Exports are
(ii) Understanding Trends highly concentrated in both complex and simple
products, and countries that dominate one tend to
Let us summarize our explanations of the trends. A dominate the other. To some extent these differ
significant part of high-technology exports by devel ences are explained by differences in macro
oping countries is a statistical artefact. If exports economic management, trade strategies, market
could be classified by processes rather than products, access, infrastructure, FDI policies, or political sta
much of recent HT exports from the developing world bility. These factors do not, however, explain all
would appear under the LT category. Conventional differences in export success. A number of coun
trade theory would cope quite well with this. It is in tries have had good macro policies, have liberalized
the concentration and differentiation of export ca trade and market access, and have opened to FDI
pabilities that more interesting questions arise. without taking off as exporters. Part of the explana

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 S. Lall

tion must lie in the large differences in technical

target the learning process directly and mount co
efficiency observed between countries (even herent
in interventions across all relevant markets.
simple technologies, Mody et al., 1995). The deepest learning (Korea and Taiwan), reaching
into innovation in complex activities, needed selec
These differences in technical efficiency are due totive interventions in product markets, including the
differing initial capabilities and, more importantly, promotion
to of infant industries and their coordination
the subsequent learning of new capabilities. The
to capture externalities, and in factor markets, for
successful countries were those that could stimulate
skills, capital, technology, and FDI, and their close
learning by providing a suitable incentive environ integration. Protection was offset by strong export
ment (fairly liberal for simple technologies and one orientation ('creating contests' according to the
that combined protection with international compe World Bank ( 1993)) and policy-making was autono
tition for difficult technologies), tap various foreign mous, well-informed, flexible, and collaborative. As
sources of knowledge, guide resource allocation the current crisis shows, however, this powerful
where there were severe capital market failures, technological system lagged in other aspects, espe
learning costs, and coordination problems, and in cially financial governance. Capital market liberali
vest in the requisite human capital and institutions. zation, combined with lax regulation and reduced
Some relied heavily on FDI, others only drew upon control over private investments, created serious
it to supplement domestic enterprises. Once launched financial problems (as in Korea), even though the
into exports and FDI, cumulative learning effects productive base remained highly competitive.
ensured that early starters improved upon their
advantages (on the 'persistence' of export success A less risky strategy, relying on MNCs for innova
and its causes see Mody and Yilmaz, 1997). Export tion but deepening local production and design capa
ing itself improved the quality of learning, since bilities (Singapore), also required selectivity on new
foreign buyers or partners provided significant tech activities, but via guiding investments rather than
nical and other information not available to domes infant industry protection, supported by selective
tic-oriented firms (Keesing and Lall, 1992; Hobday,and integrated factor-market interventions. The
1995). extent of selectivity in the Tigers depended on each
country's technological 'vision': Korea had the
Differences in capabilities greatest technological ambitions, so intervened the
While all export activity involves learning, the inten most, Singapore and Taiwan had more modest
sity of the process differs by activity. Take the polar ambitions and intervened at less detailed levels.
cases - 'minimal' learning of assembly skills in a Their patterns of technological upgrading are diffi
simple activity initiated by foreign investors, and cult to explain adequately by a simple neoclassical
'deep' learning in complex activities, with complete model of rising wages (Little, 1996).
domestic manufacturing and innovation. The first is
fairly widely dispersed in the developing world, Deepening also took place, but at lower levels, in the
since its requirements are modest: basic literacy and New Tigers. This was driven mainly by the upgrad
labour discipline, some technical skills, good infra ing of MNC activities, partly influenced by incen
structure, stability, and FDI attraction. The second tives (Malaysia), but mainly in response to wage
is confined to a few countries that have fostered the increases (the neoclassical model works better
skills, technological capabilities, depth of industrial here); the sunk costs of past learning made it
structure, and supporting institutions needed. In worthwhile for MNCs to raise technological levels
between is a vast range of learning capabilities rather than move elsewhere (as in simpler assembly
spread through the developing world. activities such as clothing, where these sunk costs
were lower). Industrial policy also played a role in
The acquisition of all capabilities requires effort and export deepening, but in general this was not as
supportive policies. Simple export capabilities are effective as in the Tigers. The technology base
relatively easy to acquire; it is the deepening process remained weak, the management of strategy was
which is more difficult and risky and faces more less flexible, well-informed, and autonomous, and
market failures. There are many strategies for factor markets and institutions were not improved in

deepening. The most successful ones are those that line with technological needs.

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

The financial sector was also managed poorly here, scale and agglomeration economies exist, countries
and the lack of appropriate safeguards led to exces can, ceteris paribus, establish competitive leads by
sive and misdirected foreign borrowing when the being first movers and cumulatively increasing their
capital account was liberalized. However, the finan lead over time (Krugman, 1986; Venables, 1996).
cial crisis had little to do with industrial policy as Second, where there are unpredictable, prolonged,
such: conglomerates in the New Tigers were fa costly, and inter-linked learning processes, with
voured for other reasons than a strategy to internal diffuse externalities and failures in information mar
ize or by-pass market deficiencies in technological kets, countries can improve their advantages by
development. It is mistaken, though popular, to interventions to promote entry, overcome learning
confuse all government favours with rational indus costs, and coordinate inter-related activities. More
trial policy directed at boosting industrial deepening over, if learning costs and risks rise with technologi
and competitiveness. cal complexity, further interventions are needed to
promote deepening. In these cases, improving skills
The larger import-substituting economies had con is a necessary but not sufficient condition for chang
siderable learning over time, but distorted and ham ing locational advantages: there are other immobile
pered by the incentive regime, weak factor markets complementary factors. Developing these gener
and institutions, and poor policy design, integration, ally involves market failures, so that comparative
and implementation. However, they had pockets of advantage depends on how failures are remedied.
competitiveness which were exploited by liber
alization, especially where the opening up was What are the kinds of policies needed to overcome
gradual and attuned to learning needs. Where liber relevant market failures? Should they be neutral
alization was sudden, the capability base was dam between activities ('functional') or targeted to par
aged. Where it left few tools for industrial promo ticular needs ('selective')? As there is an active
tion, the technological structure stagnated or re debate on the functional/selective distinction (Pack
gressed. and Westphal, 1986), the answer is important.

Take human capital again. If education markets

(iii) Implications for Comparative Advantage
Analysis
Let us relate all this back to received theory. Simple
two-factor models do not explain recent export
patterns in the developing world: while a part does
conform to standard predictions based on factor
endowments, the underlying theory is deficient (see
further below). The introduction of capital mobility
and human capital helps. There appears to be a
positive relationship between education levels and
the sophistication of the export structure, and no one
questions the critical role of skills in competitive
ness. The most successful exporters, the Asian
fail—because of the lack of information (people do
not appreciate the benefits of education, educators
do not know what products are needed),
appropriability problems and externalities (individu
als do not reap the full benefits of their investments
in skills), short time horizons and risk aversion, or
unequal distribution—free markets cannot provide
the optimal amount of human capital. Most analysts
accept such failures to be pervasive, particularly in
developing countries. But should the interventions
be only functional, as conventional approaches
(World Bank, 1993) suggest, or should they also be
selective?

Tigers, started with high levels of human capital and

then upgraded them more than other countries. At
the other end, Africa's lag in getting into even basic
manufactured exports is, to a significant extent, due
to skill gaps. However, this explanation is not a
sufficient one.
The model still neglects such critical factors as
learning, increasing returns, externalities, linkages
and cumulative effects. These factors clearly affect
the location of activity, in two ways. First, where
Evidence suggests tYvaiboth are justified, depending
on the circumstances and the level of industrial
development. In early stages of industrialization,
when skill needs are fairly low and general, the
correct policy is functional support for schooling and
basic vocational training. In later stages, with more
complex activities and functions, skill needs grow
more demanding, diverse, and specific to particular
technologies. If skill providers cannot correctly
anticipate emerging needs, or people are unwilling to

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 S. Lai I

invest in longer and costlier courses, selective poli the information constraints that markets do (Stiglitz,
cies are needed to create the skills required by the 1994), and any policy, especially if it is selective, is
evolving industrial structure (or by industrial poli susceptible to hijacking, corruption, and agency
cies). The experience of the Tigers suggests that problems. Development experience has so many
both interventions were important, with targeted instances of this that many argue that governments
policies gaining precedence with growing industrial cannot improve upon deficient markets. This is
complexity. Each Tiger geared its educational strat probably too extreme. Government failure is not
egies to meeting the technical needs of manufactur inevitable, and in cases where industrial policy has
ing, especially those being promoted by the govern worked well, as in the Tigers, it has accelerated
ment (on Singapore, see Selvaratnam, 1994). These learning significantly. The real issues are the condi
interventions were an integral part of industrial tions under which governments can be more effec
policy rather than independent strategies for human tive, the choice of the right set of interventions in
resource development. those conditions, and ways of improving policy
learning and flexibility and of reducing the scope of
Explanations based on learning, externalities, etc. interventions as markets and institutions improve
apply to all activities, including low-technology ones. (Lall and Teubal, 1998).
However, since technologies here are relatively
easy to master, scale economies low or absent, The new international 'rules of the game', backed
products relatively homogeneous, and skill needs by aid donors and several multilateral institutions,
simple, there is less to distinguish locations only on rule out many interventions that worked well in the
technological grounds. Sheer labour-cost differ Tigers; the Asian crisis is accelerating the process
ences do then matter for location: H-0 theories in that region. This can be beneficial where it
seem to work here, not because learning or exter
constrains governments from inefficient interven
nalities are absent, but because their impact is and gives more scope for efficient markets to
tions
function. The rules are, however, based on strong,
lower. However, they work at high levels of aggre
gation, say between developed and developing coun
and questionable, assumptions of market efficiency.
The economic rationale for selective interventions
tries. They fail when explaining location within the
developing world. Here we have to take account of
remains as long as markets fail and governments are
differences in learning capabilities, even for capable
LT of improving their capabilities. As Westphal
products. There exist agglomeration economies(1997,p.
in ll)states, 'Let me be blunt: Dolthinkthe
world would be a better place if less developed
simple activities; the small fashion producers in the
countries which were efficaciously able to do so could
industrial districts of 'Third Italy' are the bestknown
example, but there are also several successful
rely on infant industry protection? I most certainly do ! '
clusters in the developing world where thereThe is more mature Tigers now may not need very
selective policies, but countries at lower levels of
collective learning and joint action to exploit exter
nalities (Nadvi and Schmitz, 1994). development continue to, and forbidding them to use
such policies is unjustified and can be harmful.
However, it is in explaining location in complex
activities, where learning is prolonged, costly Toand
conclude, export patterns in the developing world
uncertain, and coordination problems difficult to open to a variety of explanations. Conventional
are
trade theory offers some insights, but the newer
resolve, that the new approaches have the strongest
edge over H-0 theories. Conventional factorapproaches
en to trade and location are more realistic
dowments, even with human capital, cannot explainand appealing. This paper focuses on technological
location where such factors are involved and there
learning as central to comparative advantage, and
are extensive market failures. To the extent thatargues that its determinants should be accorded
more importance in empirical analyses of trade
market failures can be overcome by policy, location
patterns. This may not lead to an economic theory
comes to depend upon the effectiveness of policies.
(since government policy cannot be endogenized)
but it would lead to a much richer understanding of
While theory provides a valid case for intervention,
however, there is a real and important danger the
ofreal world. It certainly opens up many possibili
government failure. Governments face manyties
of for further debate and investigation!

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

Annex Table 1
Regional Shares of Developing Country Manufactured Exports (%)

1980 1990 1996

Total
Asia 78.1 76.7 78.4
LAI 7.6 12.3 16.7
LA2 n.a. 9.0 7.5
SSA1 7.0 2.4 1.4
SSA2 2.0 0.5 0.1
ME 7.4 8.6 3.5
Resource-based
Asia 60.4 57.7 64.8
LAI 13.9 19.4 27.7
LA2 n.a. 16.0 22.9
SSA1 11.0 5.2 2.6
SSA2 4.8 1.4 0.8
ME 14.7 17.7 4.9

Low technology
Asia 89.2 81.1 79.7
LAI 3.6 9.0 12.1
LA2 n.a. 7.5 6.1
SSA1 4.9 2.1 1.7
SSA2 0.3 0.3 0.0
ME 2.3 7.8 6.5
Medium techno
Asia 73.7 66.6 66.6
LAI 8.5 21.7 28.1
LA2 n.a. 12.0 10.6
SSA1 8.4 2.6 2.5
SSA2 0.8 0.5 0.0
ME 9.4 9.2 2.8
High technolog
Asia 96.6 94.4 88.6
LAI 1.6 4.1 10.6
LA2 n.a. 2.6 1.1
SSA1 1.1 0.4 0.2
SSA2 0.2 0.1 0.0
ME 0.7 1.1 0.5

Notes : Asia include

in the Middle East.
all countries in Su
stands for the Midd

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 S. Lall

Annex Table 2
Export of Leading Developing Countries by Technological Categories

Values ($ million) Growth rates (% p.a.)

1985 1990 1996 1985-90 1990-6 1985-96

Resource-based
Hong Kong 326 864 1,109 21.5 4.3 11.6

Singapore 7,823 12,321 14,530 9.5 2.8 5.8

Korea 1,821 3,223 10,451 12.1 21.7 17.2
Taiwan 2,470 3,759 5,517 8.8 6.6 7.6
Indonesia 2,578 5,670 10,008 17.1 9.9 13.1

Malaysia 4,470 6,491 11,959 7.7 10.7 9.4

Thailand 1,596 4,009 6,254 20.2 7.7 13.2
China2 5,435 12,726 15.2
India 2,179 4,266 7,270 14.4 9.3 11.6

Argentina 2,364 3,638 5,444 9.0 6.9 7.9

Brazil 4,755 4,950 7,320 0.8 6.7 4.0
Mexico 1,703 2,856 5,454 10.9 11.4 11.2

Medium technology
Hong Kong 2,205 4,315 3,541 14.4 -3.2 4.4

Singapore 2,703 7,493 16,091 22.6 13.6 17.6

Korea 2,838 8,886 29,540 25.6 22.2 23.7
Taiwan 3,750 10,911 21,895 23.8 12.3 17.4
Indonesia 211 663 2,430 25.8 24.2 24.9

Malaysia 460 1,336 5,862 23.8 28.0 26.0

Thailand 252 1,606 5,825 44.8 24.0 33.0
China2 10,142 17,403 9.4
India 574 1,508 3,070 21.3 12.6 16.5
413 1,036 3,197 20.2 20.7 20.4
Argentina
Brazil 3,951 5,566 9,698 7.1 9.7 8.5
Mexico 2,459 6,918 27,170 23.0 25.6 24.4

Low Technology
9,956 15,146 13,286 8.8 -2.2 2.7
Hong Kong
1,990 5,523 9,045 22.7 8.6 14.8
Singapore
Korea 13,978 29,171 31,519 15.9 1.3 7.7

Taiwan 16,211 28,759 36,756 12.1 4.2 7.7

Indonesia 684 4,500 11,986 45.7 17.7 29.7

811 3,166 8,792 31.3 18.6 24.2
Malaysia
Thailand 1,448 6,821 15,293 36.3 14.4 23.9

China2 26,579 73,345 18.4

India 2,492 6,251 12,239 20.2 11.8 15.6

545 1,449 2,088 21.6 6.3 13.0

Argentina
Brazil 4,857 6,727 9,093 6.7 5.2 5.9

Mexico 1,266 2,463 16,135 14.2 36.8 26.0

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 14, NO. 2

Annex Table 2 (continued)

Values ($ million) Growth rates (% p.a.)

1985 1990 1996 1985-90 1990-6 1985-96

High Technology
Hong Kong 2,992 6,604 7,277 17.2 1.6 8.4

Singapore 5,976 22,725 74,863 30.6 22.0 25.8

Korea 4,680 16,641 39,645 28.9 15.6 21.4
Taiwan 5,864 18,781 44,345 26.2 15.4 20.2
Indonesia 100 257 4,215 20.9 59.4 40.6

Malaysia 2,577 9,667 40,528 30.3 27.0 28.5

Thailand 497 4,127 15,623 52.7 24.8 36.8
China2 4,357 26,792 35.4
India 165 452 1,019 22.3 14.5 18.0
Argentina 180 219 368 3.9 9.1 6.7
Brazil 1,036 1,793 2,445 11.6 5.3 • 8.1
Mexico 3,005 1,296 28,521 -15.5 67.4 22.7

Note:a Chinese exports in 1984 could not be allocated over the technological categories because of many
missing values.

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