1. R. D. Shelton Tarek Fadel WTEC ITRI
Which Scientometric Indicators Best Explain National Performance of High-Tech Outputs?
R. D. Shelton Tarek Fadel
WTEC ITRI
Presented at the Collnet Conference, Ilmenau, Germany, Sept. 2014

2. Outline Input/Output Models of National Innovation Systems
Trends in High Tech Outputs: Exports, Overall Manufacturing
Strongest Correlations with Inputs: R&D Investments, Researchers, and with
Intermediate Indicators: Papers, Patents
But Which is the Cause and Effect?

3. Linear, simplified model of a national innovation system with indicators. Part of domestic manufacturing sales is exports.
Sales are the main way that investments can be recovered. There are also feedback loops, e.g. one going back from sales to BERD.

4. World share of exports of high-technology products, on a cash basis, showing the dramatic rise of China to lead the world in 2005
The effect of U.S. and Japanese off-shoring of assembly to China is clear. Germany did much less of this. But, this double counts imported parts.

5. World share of manufacturing of high-technology products, on a value-added basis, from a new OECD-WTO database
China had not yet taken the world lead in Later we will extrapolate these trends.

6. Coefficients of determination (R2 in %) of HT exports and overall HT manufacturing sales with explanatory variables in Uses log scales.
Exports
(Cash Basis)
Overall Output
(Value-Added)
1a. Papers SCI
41.7
71.0
1b. Patents Triadic
48.8
69.9
1c. Patent PCT Apps
34.3
61.5
2a. GERD
44.8
79.8
2b. BERD
49.0
84.5
3a. Researchers
26.2
61.4
3b. Business Researchers
29.3
71.6
4a. Size GDP
27.3
56.9
4b. Size Population
13.1
BERD (Business Expenditures on R&D) has the strongest correlation, but overall GERD (Gross Expenditures on R&D) is not far behind. Papers and patents are also good predictors.

7. Regression model for overall high-technology manufacturing sales (value-added) vs. business expenditure on R&D, both in 2009.
This is a very good fit, maybe too good!

8. Lag analysis
Lags do not significantly improve models, even for the aerospace sub-sector. Likewise, adding a second explanatory variable does not significantly improve models.

9. Forecasts of BERD using extrapolations
Forecasts of BERD using extrapolations. China will probably not take the lead until 2018.
The US and EU have linear trends, while the PRC curve is clearly quadratic.

10. The high technology sector has been growing rapidly worldwide
The high technology sector has been growing rapidly worldwide. China will probably take the lead in 2014.
HT manufacturing sales, with extrapolations after The PRC trend model is quadratic, and the others are linear. Value-added data.

11. Use of lags to illuminate cause and effect in two variables.
Correlations are with (a) BERD in various years with HT manufacturing in 2009, and (b) HT manufacturing in various years with BERD in BERD as a result is somewhat more convincing.

12. Conclusions
New value-added data on HT manufacturing provide more accurate trends than exports on a cash basis
This data correlates very closely with business investment in R&D, which suggests governments should encourage it
But, this may be spurious, since it may be an effect rather than a cause. That is, it seems that sales enable R&D investments

13. Appendix Paper posted at http://itri2.com/s WTEC is at http://wtec.org
ITRI is at
New value-added data is at

14. The loss of US share seems to be to the ones listed.
Early US gain seems to have come from Russia