3. COMPETING IN THE WORLD ECONOMY
3.3. Manufacturing trade balance by technology intensity
The manufacturing trade balance reveals an econ-
omy s structural strengths and weaknesses in terms
Contributions to the trade balance
of technological intensity. It indicates whether an
The contribution to the manufacturing trade
industry performs relatively better (or worse) than
balance is calculated as follows:
total manufacturing and can be interpreted as an indi-
cator of revealed comparative advantage that is based
(Xi-Mi)  (X-M)*[(Xi+Mi) / (X+M)],
on countries trade specialisation.
where (Xi-Mi) is the observed manufacturing sec-
In 2007, only 11 OECD countries and 2 non-members
tor trade balance and (X-M)*[(Xi+Mi) / (X+M)] is
(Israel and Slovenia) show a strong comparative
the theoretical trade balance.
advantage in trade in high-technology manufactures.
A positive value for an industry i indicates a
As in previous years, Switzerland had a trade surplus
structural surplus, while a negative value indi-
of over 7%, followed by Ireland with 5%. Trade in high-
cates a structural deficit. The indicator is
technology industries represented around 3% of total
expressed as a percentage of total manufactur-
manufacturing trade in the United States, Mexico and
ing trade in order to eliminate business cycle
Korea. In Israel and Slovenia the trade surplus was 2%
variations.
and 1%, respectively. Most countries comparative
advantage in trade in high-technology industries
changed little between 1997 and 2007, although there
were notable exceptions. It rose by 6 percentage points
Sources
in Iceland, by 4 percentage points in Switzerland and in
South Africa, and by 2 percentage points in Brazil.
OECD, STAN Bilateral Trade Database,
Over the same period, it dropped by 5 percentage
www.oecd.org/sti/btd.
points in Japan and by 3 percentage points in India
and in China. OECD, STAN Indicators Database,
www.oecd.org/sti/stan/indicators.
Between 1997 and 2007, the picture was somewhat
different for trade in medium-high-technology indus-
tries. In particular, more countries had a strong com-
Going further
parative advantage in 2007. As in previous years,
Japan led with a surplus of 15%, followed by Germany
Hatzichronoglou, T. (1997),  Revision of the High Tech-
and Ireland with 7% and 5%, respectively. In 2007,
nology Sector and Product Classification , OECD Sci-
Slovenia was the only non-OECD country to have not
ence, Technology and Industry Working Papers 1997/2,
only a fairly strong comparative advantage of 2% in
OECD, Paris.
trade in medium-high technologies but also to benefit
OECD (2005), Measuring Globalisation: OECD Handbook
from an increase of 4 percentage points in its contribu-
on Economic Globalisation Indicators, OECD, Paris.
tion to the manufacturing trade balance. Over 1997-2007,
OECD (2007), Staying Competitive in the Global Economy:
the contribution of trade in medium-high-technology
Moving Up the Value Chain, OECD, Paris.
industries increased by 13 percentage points in
Indonesia, 11 percentage points in Turkey and Pilat, D. et al. (2006),  The Changing Nature of Manu-
6 percentage points in China, despite negative contri- facturing in OECD Countries , OECD Science, Technology
butions to their overall manufacturing trade balance. and Industry Working Papers 2006/9, OECD, Paris.
In 2007, much of the manufacturing trade balance of
these countries relied on the positive contribution of
Figure notes
low-technology industries.
Underlying data for China include trade with
Hong Kong, China.
Changes in contribution to the manufacturing trade
balance refer to 1999-2007 for Luxembourg, to 2000-07
for South Africa and to 2000-07 for the BRIICS (Brazil,
Russian Federation, India, Indonesia, China and South
Africa).
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 � OECD 2009
88
3. COMPETING IN THE WORLD ECONOMY
3.3. Manufacturing trade balance by technology intensity
Contribution of high-technology industries to the manufacturing trade balance, 2007
As a percentage of manufacturing trade
%
10
Stronger comparative advantage
5
0
Weaker comparative advantage
-5
-10
1 2 http://dx.doi.org/10.1787/744524463556
Change in contribution to the manufacturing trade balance: high-technology industries, 1997-2007
As a percentage of manufacturing trade
%
10
Stronger comparative advantage
5
0
Weaker comparative advantage
-5
-10
1 2 http://dx.doi.org/10.1787/744542886012
Contribution of medium-high-technology industries to the manufacturing trade balance, 2007
As a percentage of manufacturing trade
%
20
Stronger comparative advantage
10
0
-10 Weaker comparative advantage
-20
1 2 http://dx.doi.org/10.1787/744586031377
Change in contribution to the manufacturing trade balance: medium-high-technology industries, 1997-2007
As a percentage of manufacturing trade
%
20
Stronger comparative advantage
10
0
-10 Weaker comparative advantage
-20
1 2 http://dx.doi.org/10.1787/744600432311
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 � OECD 2009
89
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