COMPETING WITH EAST ASIAN FIRMS MASAAKI KOTABE The Washburn Chair Professor of International Business and Marketing Temple University Philadelphia, PA 19122 U.S.A.

1. Ever-Changing World Economy Which country had 15.6% ($18.56 trillion) of the world’s real GDP ($119.3 trillion) in 2016? USA Which country had 35% of the world’s GDP in 1820?* China Which Latin American country/ies had a higher per-capita income than Germany, Norway, Finland, Austria, Italy and Spain in 1950? Argentina & Venezuela Which country dominated the world economy in the 1980s, slated to overtake the U.S. supremacy in the 21st century? Japan Which country was the most economically dominant in the 1990s? USA Which country/region will become the most economically dominant in the next 10 years? ???

2. Asian Economies Overseas Chinese

South Korea (11th) Nominal GDP: $1.41 trillion Real GDP: $1.93 trillion

Combined GDP of China, Japan, and Korea: 22.61%

3. The Effect of Technology on Economic Performance What is your impression of the economies of the United States, Japan, Korea, and China?

3a. Change in Country Innovativeness: A Key to a Country’s Long-Term Competitiveness Source: Michael E. Porter and Scott Stern, The Challenge to America’s Prosperity, Washington, D.C.: Council on Competitiveness, 1999, pp. 34-35.

3b. Patents in Force (2015)

3c. Resident Patent Applications per Billion US$ GDP

3d. R&D Expenditures as Share of GDP for Selected Countries (2000 – 2015) Finland Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm, 2017.

3e. Top 30 Patent Holders in the U.S. (2016) J K J J J J K J J C K J Source:

4. Evolution of Global Strategy 1. Globalization of Markets - Geocentrism; - Emergence of global customers 2. Globalization of Sources - Reduction of cost inefficiencies and duplication of efforts - Improved R&D-manufacturing- marketing linkages…leading to global market infrastructure 3. Globalization of the Intellect - Opportunities to transfer products, brands and ideas across subsidiaries

5. Location Still Matters U.S. Automobile Industry in Detroit Cellular phones in Scandinavia Dot matrix, bubblejet, inkjet, and laserjet printers & fax machines in Japan Alcohol-powered automobiles in Brazil Best-selling Suntory “三得利” beer in China that tastes bad Bananas exported from Iceland

Any questions?

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