TNAG-2597-FCO40-3785-Appointment-of-Chris-Patten-as-new-Governor-of-Hong-Kong--Ap-1992 — Page 44

technologies as a determinant of industrial development and specialization.

This is

because the flying geese concept denotes a group of economies arranged orderly in some

Industries or industrial

tiers in accordance with their stages of industrialization.

production processes or technologies will be passed on from a higher tier to a lower tier

when comparative advantages change in such a way that it is no longer profitable for the

higher tier economies to engage in the production of the product. In the Asian Pacific

context, it implies that industries are passed on from the U.S. to Japan, then to the NIES,

and then to the ASEAN (Yamazawa, 1990). This hypothesis in essence asserts that there

is a product life cycle and countries participate in the production of the product at

different stages of the cycle in accordance with their comparative advantages. With rapid

developments of new technologies and a trend of increasing globalization of production

and technology, product life cycles if existing at all tend to be very short. It is for this

reason that the product life cycle hypothesis of foreign investment is to be reassessed.

A trend which we have observed most recently and which will certainly continue

is a specific pattern of industrial specialization among developing countries generated by

the development of a specific new technology. It is no longer always true that an

industry is first established in an advanced country and then passed on to the next tier

of countries in the next phase of the product cycle. Rather, it is a specialization of

different countries in the different sub-sectors of the various industries that are affected

by a newly developed technology soon after the technology is commercialized. Instead

of a product life cycle, we should be speaking of a technological cycle in which industries

are affected or created by a new technology and countries specialize in different

industries and sub-sectors at different stages of the technological cycle. The new

-20-