Export performance, technological upgrading and foreign direct investment strategies in the Asian newly industrializing economies: with special reference to Singapur

Abstract This paper analyses the competitiveness and technological structure of manufactured exports by leading Latin American and Asian economies for 1980-97. It explains East Asian performance with reference to the strategies adopted for technological development, focusing on foreign direct investment strategies. It particularly draws on the experience of Singapore, the countgry that has used FDI to promote industrial growth and technological upgrading more effectively than any other developing country. The paper starts by analysing the nature of technological activity in developing countries and the significance of the technological structure of exports. It presents data on global export trends that show that technoloy— intensive manufactures are growing considerably faster than other categories, and that East Asia dominates export performance in the developing world. Latin America lags in high technology exports, though Mexico's maquiladoras improve the region's overall performance. It goes on to analyse the competitive base of leading Latin American And Asian economies, presenting information on strategies, skill formation, R&D activity and attraction of FDI.Success in attracting export—oriented high—technology FDI has been a major determinant of competitive success in all developing economies with the exception of Korea and Taiwan. The paper presents the results of cluster analysis to show different groups of countries according to broad competitive strategy. It then analyses FDI strategies in East Asia and particularly Singapore, and provides economic reasons why such strategies are necessary.