Chapter 1 Theory of Continuous Competitiveness: Corporate and Country Empirical Experience‐IBM System/360; Japan, Korea, Taiwan

In the era of dramatic developments in technology worldwide, the relative competitiveness of a corporation/country over time has to be continuously calibrated and pro‐actively protected. Here, for the first time, we develop two sufficient conditions, and 12 necessary conditions of continuous competitiveness (CC): the ratio of value‐added per unit of currency of OUR product (service) to THEIR product (service). In Chapter 1, we apply CC to three corporations (IBM, CEC, API) and to three countries (Japan, Taiwan, Korea). At a time when IBM enjoyed 80 percent of the market, it decided to commit 83 percent of the next four years' TOTAL SALES to build a new generation of computers on the unproven technology of integrated circuits to assure IBM's continuous competitiveness. To the same end, Japan pro‐actively selected the growth industry of each decade beginning in the '50s (computers), and nurtured it, taxing other industries. The first year in which the US trade with the Pacific exceeded that of the Atlantic, 1982, is the benchmark of a study of competitiveness of two countries of comparable population and exports, Korea and Taiwan. If Taiwan exports rose in volume but lost in profitability, Taiwan needs to make better products cheaper and faster. If the required technology advances are not fully available domestically, they need to be imported: Which is the rationale of technology transfer (techtransfer). Techtransfer can meet one of the necessary conditions of CC, viz., the desired technological progression‐from linear extensions of performance characteristics along the same curve, to quantum jumps from one technology curve to another. The techtransfer over two decades from IBM‐Taiwan to Taiwan Manufacturers as a whole progressed from components to complete product: Which could be considered at best as linear extensions of performance characteristics. For a country like Taiwan, whose trade (i.e. exports + imports) is as much as 94.8% of GNP, and which does not have a highly developed R&D base, techtransfer is a prime means of upgrading the technology. We will examine two Taiwan corporations which expanded exports through techtransfer: one, a Taiwan components manufacturer; and two, a Taiwan power supply manufacturer. As vendors to IBM, they aggressively pursued techtransfer from IBM. These empirical applications set the stage to examine Malaysian experience of E&E in Chapter 2.