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Chapter 6. Industry, Technology, and the Global Marketplace


Affiliate: A company or business enterprise located in one country but owned or controlled (10% or more of voting securities or equivalent) by a parent company in another country; may be either incorporated or unincorporated.

Angel investment: Financing from affluent individuals for business startups, usually in exchange for ownership equity. Angel investors typically invest their own funds or organize themselves into networks or groups to share research and pool investment capital.

Asia-8: India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand.

Commercial knowledge-intensive services: Knowledge-intensive services that are generally privately owned and compete in the marketplace without public support. These services are business, communications, and financial services.

Company or firm: A business entity that is either a single location with no subsidiary or branches or the topmost parent of a group of subsidiaries or branches.

EU (European Union): The 27 member states of the European Union since 2007 include Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

Foreign direct investment: Financial investment by which a person or an entity acquires a lasting interest in and a degree of influence over the management of a business enterprise in a foreign country.

Gross domestic product (GDP): The market value of all final goods and services produced within a country within a given period of time.

High-technology manufacturing industries: Those that spend a relatively high proportion of their revenue on R&D, consisting of aerospace, pharmaceuticals, computers and office machinery, communications equipment, and scientific (medical, precision, and optical) instruments.

Information and communications technology industries: A subset of knowledge- and technology-intensive industries, consisting of two high-technology manufacturing industries, computers and office machinery and communications equipment and semiconductors, and two knowledge-intensive service industries, communications and computer services, which is a subset of business services.

Intellectual property: Intangible property resulting from creativity that is protected in the form of patents, copyrights, trademarks, and trade secrets.

Intra-EU exports: Exports from EU countries to other EU countries.

Knowledge-intensive industries: Those that incorporate science, engineering, and technology into their services or the delivery of their services, consisting of business, communications, education, financial, and health services.

Knowledge- and technology-intensive industries: Those that have a particularly strong link to science and technology. These industries are five service industries, financial, business, communications, education, and health, and five manufacturing industries, aerospace, pharmaceuticals, computers and office machinery, communications equipment, and scientific (medical, precision, and optical) instruments.

Normalizing: To adjust to a norm or standard.

Not obvious: One criterion (along with "new" and "useful") by which an invention is judged to determine its patentability.

Productivity: The efficiency with which resources are employed within an economy or industry, measured as labor or multifactor productivity. Labor productivity is measured by GDP or output per unit of labor. Multifactor productivity is measured by GDP or output per combined unit of labor and capital.

Purchasing power parity (PPP): The exchange rate required to purchase an equivalent market basket of goods.

R&D intensity: The proportion of R&D expenditures to the number of technical people employed (e.g., scientists, engineers, and technicians) or the value of revenues.

Triadic patent: A patent for which patent protection has been applied within the three major world markets: the United States, Europe, and Japan.

Utility patent: A type of patent issued by the U.S. Patent and Trademark office for inventions, including new and useful processes, machines, manufactured goods, or composition of matter.

Value added: A measure of industry production that is the amount contributed by the country, firm, or other entity to the value of the good or service. It excludes the country, industry, firm, or other entity's purchases of domestic and imported supplies and inputs from other countries, industries, firms, and other entities.

Value chain: A chain of activities to produce goods and services that may extend across firms or countries. These activities include design, production, marketing and sales, logistics, and maintenance.

Venture capitalist: Venture capitalists manage the pooled investments of others (typically wealthy investors, investment banks, and other financial institutions) in a professionally managed fund. In return, venture capitalists receive ownership equity and almost always participate in managerial decisions.