Export advantage

According to the lead market hypothesis, a country has an export advantage if the context of a country s market facilitates innovation designs that match demand in other countries. The export advantage can derive from the effort of domestic market participants (users, producers, government) to develop innovations for tliie world market. This would include deliberate deviation from the best domestic solution towards a design which is more suitable for foreign environments. Simi- 

The German phone could have been more expensive because of the higher functionality (Jung, Wamecke 1998, pp. 5-65). An official from a manufacturing company, however, remembered that the German operator procured the phones at a much lower wholesale price of about a third the retail price charged. 

Price data for mobile phones are not available for the 1980s. Fransman (1997, p. 418) mentions a monthly rental price of about 100 for a cellular phone in Japan. 

Judging by the number and share of subscribers outside the home country, NMT is the most successful analog mobile system. The high export orientation of the Nordic countries had an positive effect on the price advantage factor, because the international diffusion of the NMT system lowered prices for telephone sets and system components (Hulten, Molleryd 1995, p. 26). It strengthened the transfer advantage because it demonstrated the reliability of the NMT system in different 

Source Own calculations and estimations on the basis of national numbers of subscribers and standards adopted by each country. 

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In the dynamic model of section 0, the similarity effect is an export advantage because the similarity of context between two countries narrows the gap between the utility of the two national specific designs (II and IV). 

Export advantage. Conditions that support the inclusion of foreign demand preferences in nationally preferred innovation designs. 

Figure 3-9 includes some of the other factors that are not lead markets factors, but either support the lead market factors or they are the result of the lead market role of a market. For instance, supporting and related industries that are internationally competitive can support the export advantage and therefore the lead nuir-ket role of a country in an industry. Factor endowments such as physical resourc es and availability of capital can influence the lead market factors such as the factor price advantage. The availability of financial resources, sources of technical and market knowledge, can support the lead market factors, but they are mainly considered a result of the early adoption of an innovation by a market. In section 33 in particular I address the question of how national technical superiority is related to the lead market role of countries. Finally, chance is a determinant of many processes in the economy. As mentioned above (2.4), in models of technical choice under externalities historical accidents are considered mainly responsible for the outcome. Chance controls a basic invention based on serendipity (inven-tions-by-chance) and oil price shocks, war and political shifts. It can be expected that chance may play a role in the lead market processes as well. The lead market system is therefore not a deterministic theory. However, this thesis is predominantly about nation-specific attributes or national success factors that support the lead market function of a country as well. In this chapter I will describe these nation-specific lead factors. 

The GSM standard had an additional export advantage compared to the US and Japanese standards. The joint development of a pan-European standard led to the inclusion of a multitude of features which different countries required due to their preferences. The GSM standard became therefore a multi-environment standard. For instance, Germany required the inclusion of the SIM card for security reasons, Britain and the Nordic countries required technical features that made small handsets possible. Britain wanted data communication abilities. These different national requirements mirrored their own good experiences with their first cellular generations. Although this led to nerve-breaking discussions in the standardisation committees, GSM became an amalgamation of the best features of what different environments made transparent. 

Conditions in other markets are only incorporated in the innovation development in the case of a strong export advantage. The other lead market advantages suggest that the lead market conditions will be transferred to the other countries over time. 

Export advantage Countries with multi-ethnic populations can gain an export and demand advantage when they respond to the preferences of local ethnic... 

Ohmae (1995) suggests that firms in countries with multi-ethnic populations can respond to a variety of cultural preferences and thus develop innovations that can be exported to their home countries. Singapore is one prominent example for Ohmae. He (expects that this multi-ethnic agglomeration can help the local industry create products that can be exported to the vast markets of India and China. This could strengthen Pvo lead market advantages, namely demand anticipation and an export advantage of multiusage innovations. 

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