unctad.org | DYNAMIC PRODUCTS MAKE FOR DYNAMIC ECONOMIES
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DYNAMIC PRODUCTS MAKE FOR DYNAMIC ECONOMIES

TAD/INF/PR/61
01 October 2002

A small number of sophisticated products account for a significant share of world trade. The 40 most dynamic products in world merchandise exports in 2000 comprised only 5% of the 786 products at the Standard International Trade Classification (SITC, Revision 2) at the four-digit level but accounted for nearly 40% of the value of total exports. As a group, exports of these products grew at 12% annually during 1985-2000 (compared to overall export growth of 8.2%), raising their world market shares by 15 percentage points. These are the products that were most dynamic in world trade, according to UNCTAD´s World Investment Report 2002, which focuses on the role of transnational corporations (TNCs) in export competitiveness.

Manufactures, especially those not based on natural resources, are by far the principal dynamic products. Three manufacturing industries stand out -- electronics, automotive and apparel -- accounting for about half of these dynamic products and for almost one quarter of the total world import value in 2000. They also represented almost five sixths of the growth in the value of dynamic products in world trade in 1985-2000.

The electronics items on the list accounted for 13% of world exports in 2000 and for almost three quarters of export growth between 1985 and 2000. Most of these high-tech products revolve around information and communication technologies. In medium-technology products, the automotive industry accounted for nearly 9% of exports but grew relatively slowly. In low-technology products, the main products were in apparel, which accounted for less than 2% of world trade.

Trade in parts and components of this category of manufactures has assumed more importance in comparison to finished products. This is because TNCs are establishing new international production systems that are based on the individual advantages of distinct production locations in terms of the key elements of the value chain. This implies that attracting the foreign direct investment associated with the establishment of the export platforms that constitute international production systems can be an important ingredient in gaining market shares in dynamic products.

Countries that specialized in the export of dynamic products and gained market shares were prominent in the group of countries that most benefited from world trade during this period. Individual “winner” countries ranked from the highest to the lowest by rise in market share are indicated below (see chart). Winners do not include large exporters that did not improve their competitive position during 1985-2000 (e.g. Japan in high-tech exports), even though they might have had the largest market shares over the whole period.

A number of developing economies have achieved important gains in market shares in technology-intensive industries of non-resource-based manufactures. The top eight in this group are China, the Republic of Korea, Mexico, Malaysia, Thailand, Taiwan Province of China, Singapore and the Philippines. Of the economies in transition, Hungary, Poland and the Czech Republic registered the greatest advances.

An interesting feature of the winner countries is that Asian winners gained market shares in all major markets (Europe, North America and Japan), while the winners from the other regions advanced only in the context of regional markets. Western and Eastern European winners gained only in European markets, and countries in Latin America and the Caribbean gained only in North American markets. The Asian winners have thus had broader success with dynamic products than have countries from other regions.




Endnotes

1. The methodology used here to select dynamic products is to select, from the universe of world imports, only those products (at four digits of the SITC, Rev.2) that accounted for at least 0,33% of total world trade in 2000 and rank them according to the increase in their market shares between 1985 and 2000.





For more information, please contact:
Director, Karl P. Sauvant
Division on Investment, Technology and Enterprise Development
T: +41 22 907 5797
E: karl.sauvant@unctad.org
or
UNCTAD Press Unit
T: +41 22 907 5828
F: +41 22 907 0043
E: press@unctad.org



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