Technology and alliance strategies for follower countries

This paper starts with a simplified model and then modifies it with accelerated innovation process, changing comparative advantages, and emerging global strategies to explain the contemporary situations of international trade and industrial transplantation induced by global innovative product or product class, and the new challenges to follower countries. In order to explore the feasible strategies for the follower countries, this paper assumes the United States as a leading innovator and examines the historical experiences of Japan (a first follower) and Taiwan (a second follower) in their catch-up courses. The preliminary conclusions are as follows: (1) The follower countries mainly relying on ‘traditional strategies’ will very likely be unfavorably impacted by the new situations. (2) The concerted national technological cooperative system and international management of foreign bases to accelerate ‘technological metabolism,’ as Japan’s experience shows, can contribute decisively to a follower country’s rapid progress in especially process technology and appropriability economic benefit from innovation. (3) The historical priority on process technology as suggested by Japan’s successful locus should not be taken for granted by today’s follower countries. New emphasis should be placed on product innovation, as shown in the case of Taiwan. To implement this strategy, the geographical deployment of innovation functions to and the international alliances with innovative countries are crucial to success. (4) Aggressive joint efforts by follower countries, as illustrated by the close connection between Japan and Taiwan, can bring about extra benefit for participants and also shorten their lags behind the innovator and forerunners.