Is Technology the Basis of Long-Term National Competitive Advantage? Compare Differences in the Innovation Systems of Leading Economies, Industries and Firms.

Topics: Innovation, Toyota Prius, Technology, Automobile, General Motors, Automotive industry / Pages: 10 (2478 words) / Published: Mar 15th, 2013
Is technology the basis of long-term national competitive advantage?
Compare differences in the innovation systems of leading economies, industries and firms. (72%)

1. Introduction

Technological developments have shaped our world since the beginning of civilization. In this report, by examining the important influences of technology and other factors which may also be powerful influences on human history, we will discuss whether technology is the basis of long-term national competitive advantage. We will base our argument on Porter’s and Chandler’s theories, and support it with research evidence. In the following report, we will answer the questions in detail.

In order to compare differences in the innovation systems of leading economies, industries and firms, the structure of the argument is going to be three-tiered; broken down by national level, industrial level and firm level. We will mainly focus on the automobile industry due to the fact it has been one of the most important and biggest industries since the first industrial revolution. At the national level, five leading economic countries will be compared horizontally: the US, China, Japan, Germany and the UK. At the industrial level, we will look at the history of automobile development. At the firm level, we will carefully compare two case studies, Toyota and BMW.

2. Technological Influences on Long-term National Competitive advantage

To achieve a national competitive advantage is one of the most significant goals for any nation. In looking at national competitiveness, Porter (1990) defined the competitive advantage of a nation as its capacity to attract local and foreign firms to use the country as a platform to conduct business and achieve national economic success. One of the major reasons behind national competitive advantage is technology. According to Porter (1998) technological change is one of the principal drivers of competition, which is at the heart of economic growth and

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