High-Tech Products Commercialization and the Role of Public Policy

Abstract

Considering the significant contribution of high-tech products in international market competition has made many countries to develop appropriate strategy to enhance its capacity. Empirical evidence shows that countries which significant high tech contributions to its GDP are more competitive in the global market compared to those countries which its most of its economy are low tech products. At the micro level, high tech commercialization strategy by technology producers determines its success to deliver the products to early adopter. At this era of open innovation, domestic firms can benefit from technology from other part of the world. It is therefore necessary for firms and other element of innovation system within a country to have a conducive environment to enable them to interact and access such technology sources. At the macro level, appropriate public policy intervention to create such a climate is required, especially in the context of developing countries. This paper discusses these two aspects.First part of the paper will provide a brief review of commercialization process of high tech products especially from research centers and universities — the main actors in RD and higher failure rate for those without such a guidance.Second part reviews the role of public policy to spur high tech innovation adoption in a country. The success story of ‘Silicon Valley’ in the USA is often cited as world class innovation cluster normally emerges naturally without much government intervention. Yet, The case of Taiwan and China, for example, in developing its high-tech based industries apparently challenge such an argument. Indonesia also takes similar route at different mode and magnitude. In 1980s, Indonesia has established a number of strategic high tech industries such as in the area of air craft manufacturing, electronics, telecommunication, transportation, and defense. This part will also briefly review some public policy instrument that can be taken to stimulate the generation, development, diffusion, and wide use of technology such as financial and non-financial measures. The government can also play an essential role in fostering high-tech industry through licensing, acquisition, and reverse engineering through various schemes.