5.1 the Palm Oil Value Chain
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36800 Public Disclosure Authorized TECHNOLOGY, ADAPTATION, AND EXPORTS Public Disclosure Authorized How some developing countries got it right EDITED BY Public Disclosure Authorized VANDANA CHANDRA Public Disclosure Authorized Technology, Adaptation, and Exports Technology, Adaptation, and Exports how some developing countries got it right Vandana Chandra, Editor THE WORLD BANK Washington, DC © 2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved. 1234509080706 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978- 750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank. org. ISBN-10: 0-8213-6507-X ISBN-13: 978-0-8213-6507-6 eISBN-10: 0-8213-6508-8 eISBN-13: 978-0-8213-6508-3 DOI: 10.1596/978-0-8213-6507-6 Library of Congress cataloging-in-publication data has been applied for. Contents Foreword xiii Acknowledgments xv Contributors xvii 1. Technology, Adaptation, and Exports—How Some Developing Countries Got It Right 1 Vandana Chandra and Shashi Kolavalli 2. India’s Software Industry 49 Subhash Bhatnagar 3. Electronics in Taiwan—A Case of Technological Learning 83 John A. Mathews 4. Electronics in Malaysia: Export Expansion but Slow Technical Change 127 Rajah Rasiah 5. Explaining Malaysia’s Export Expansion in Palm Oil and Related Products 163 Rajah Rasiah 6. Salmon Farming in Chile 193 Jorge Katz v vi contents 7. Wine Production in Chile 225 José Miguel Benavente 8. Bridging the Knowledge Gap in Competitive Agriculture: Grapes in India 243 Gopal Naik 9. Closing the Yield Gap: Maize in India 275 Gopal Naik 10. Technological Change in Uganda’s Fishery Exports 301 Rose Kiggundu 11. Floriculture in Kenya 335 Meri Whitaker and Shashi Kolavalli boxes 1.1 Institutional Support for Industry-Specific Government Policies 14 1.2 A Common Set of Industry-Specific Government Measures 40 2.1 Key Factors That Explain the Success of India’s Software Industry 78 3.1 Profiting from the Disintegration of the Value Chain 89 6.1 Steps in the Cultivation of Farmed Salmon 205 figures 3.1 Value Chain in the Semiconductor Industry 91 3.2 Revenues from the Manufacturing of Integrated Circuits in Taiwan, 1989–98 92 3.3 Electronics: The Engine of Manufacturing in Taiwan, 1981–2002 94 3.4 Taiwan and the Technology Gap in Semiconductors, 1975–95 99 3.5 National System of Economic Learning in East Asia 115 contents vii 4.1 Employment and Trade in Electronics in Malaysia, 1986–2003 131 5.1 The Palm Oil Value Chain 167 5.2 The Network of Institutions Involved in the Oil Palm Value Chain 169 5.3 Direct and Indirect Subsidies for Export-Oriented PPO Products, Malaysia, 1968–84 176 5.4 Malaysia’s Exports of Crude and Processed Palm Oil, 1960–2002 184 5.5 Malaysia’s Share in World Production of Processed Palm Oil and All Processed Oils, 1971–95 185 6.1 Chile’s Exports of Farmed Salmon, 1991–2002 194 6.2 The Chilean Salmon-Farming Industry, 1981–2000 210 7.1 Chile’s Share of the World Wine Market, 1988–2000 226 7.2 Plantings by Variety, 1985–2001 231 7.3 Chilean Wine Exports by Destination, 1980–2002 231 8.1 Grape Yields in Major Producing Countries, 1962–2001 249 8.2 Grape Plantings in the Major Producing States of India, 1987–2002 253 8.3 Grape Production in the Major Producing States of India, 1987–2002 253 8.4 Grape Yields in the Major Producing States of India, 1987–2002 254 8.5 India’s Grape Exports and Imports, 1970–2002 254 8.6 Prices Paid for Indian and World Grape Exports, 1991–2002 256 8.7 Grape Exports by Mahagrapes, 1990–2003 264 9.1 Maize Yields in Selected Countries, 1981–2003 282 9.2 Minimum Support Prices for Maize and Wheat in India, 1960–2003 288 9.3 Major Expenses of Accelerated Maize Development Program in Karnataka, 1999–2004 292 9.4 Maize Yields in Major Indian States, 1990–2001 295 9.5 Area Under High-Yielding Varieties of Maize in India, 1966–99 296 viii contents 10.1 Selected Economic Indicators, 1980–2002 303 10.2 Unit Value of Chilled Fish Exports, East Africa and World, 1990–2001 321 10.3 Unit Value of Frozen Fish Exports, East Africa and World, 1990–2001 322 tables 1.1 Ten Cases of Technological Adaptation for Export Competitiveness 2 1.2 The Indicators of Technological Adaptation 10 1.3 The Importance of Various Technology Transfer Mechanisms in the 10 Cases 21 1.4 Outcomes of the 10 Cases 30 2.1 Growth of Indian Software Exports 51 2.2 Annual Sales of the Indian Software Industry 51 2.3 Structure of Indian IT Services and Software Exports Industry, 2002–4 53 2.4 Comparison of Indian Software Export Revenue by Delivery Location, 1988–2005 57 2.5 Labor Supply in the Indian Information-Technology Sector 60 2.6 The Indian IT and IT-Enabled Services (ITES) Sectors 61 2.7 Engineering Colleges in India, 1998–99 61 2.8 India Compared with Competing Countries, 2003/4 63 2.9 Profile R&D Effort in India’s IT and Software Service Sector 73 2.10 Examples of Alliances Formed by Indian IT Firms 76 3.1 Taiwan’s Export Performance in Electronics, 1976–2001 95 3.2 Representative R&D Alliances in Electronics in Taiwan (China), 1983–97 103 3.3 Per Capita Take-Up of U.S. Utility Patents in Selected Countries 107 3.4 U.S. Patents Obtained by Firms in Taiwan (China), Korea, Singapore, and China, 1997–2001 108 contents ix 3.5 Propagation of Innovations: Competitive Postures 111 4.1 Industrial Strategies and Trade Orientation in Malaysia, 1958–2000 132 4.2 Output and Trade Ratios for Electrical Machinery in Malaysia, 1968–97 145 4.3 Aspects of Institutional and Systemic Coordination, Penang and Klang Valley, 2005 147 4.4 Technological Intensities of Electronics Firms in Malaysia, Taiwan (China), and Korea, 2000 151 4.5 Two-Tailed T-Tests of Technology Intensity by Country and Ownership, Electronics Firms, 2000 151 4.6 Educational Enrollment Index in Selected Countries, 1970–95 153 4.7 R&D Scientists and Engineers per Million People, 1981–2000 156 5.1 Phases of Oil Palm Cultivation in Malaysia, 1870–2002 165 5.2 Agricultural Acreage, Malaysia, 1970–2000 172 5.3 Elements of the Palm Oil Value Chain Stressed in Malaysia’s Industrial Master Plans 178 5.4 Institutional Support for the Oil Palm Industry Under Industrial Master Plans 1 and 2 181 6.1 Worldwide Consolidation of the Salmon-Farming Industry 199 6.2 Evolution of Salmon Farming in Chile, 1960–2000 201 6.3 Intermediate Inputs and Services in the Hatchery Phase 204 6.4 Sample R&D Activities 213 7.1 Production and Export of Chilean Wine 228 7.2 Chile’s Wine Zones 230 8.1 Production of Major Fruits in India, 1990/91 and 2000/2001 246 8.2 Consumption of Grapes in India 247 8.3 Share of Major Producing Countries in World Production, 1961–2003 248 8.4 Grape Exports Among the Major Producing Countries, 1961–2003 250 x contents 8.5 Prices Paid for Grape Exports by Major Exporting Countries, 1961–2001 250 8.6 Area, Production, and Yield of Grapes in India, 1987–2002 252 8.7 Exports of Grapes and Grape Products from India, 1990–2003 255 8.8 India’s Exports of Fresh Grapes, by Destination, 1990–2003 256 8.9 Economics of Grape Production for Local and Export Market 260 8.10 Growth Rates of Area (A), Production (P), and Yield (Y) of Major Crops in India 268 9.1 Trends in Maize Use in India, 1969–2000 276 9.2 Growth in Consumption of Animal Products in India, 1980–2000 277 9.3 Growth of Per Capita Poultry Consumption, by Region, 1970–99 278 9.4 Growth in Poultry Production in India, 1980–2002 278 9.5 Production of Eggs, Broilers, and Poultry in India, 1995, 2000, and 2002 279 9.6 Growth in Wholesale Prices and Income in India, 1980–99 279 9.7 Production of Compounded Livestock Feed in India, by Sector, 1965–2001 280 9.8 Trends in the Share of Crops in Gross Cropped Area, 1970–2000 281 9.9 Growth Rates of Area (A), Production (P), and Yield (Y) of Major Crops in India, 1961–2001 283 9.10 Exports of Maize from India, 1997–2001 284 9.11 Trends in Population and Composition, 1981, 1991, and 2001 285 9.12 Distribution of Employment by Sector, 1977–2001 285 9.13 Performance of Major Sectors, 1970–2001 286 9.14 Per Capita Income, 1980/81 to 1999/2000 286 9.15 Incidence of Poverty in India,