Background

As part of a general worldwide trend, Mexico, Canada, South America, Southeast Asia, China, and India experience today an explosive growth of demand for high-technology products and services. These are urgently needed by these countries and regions to break away from their geographical and structural limitations to economic development and employment growth. The numbers are quite telling. Between 1991 and 1999, sales of US software products alone grew from $1.1 billion to $2.5 billion per year in Latin America. Just in Brazil, approximately 500,000 new computers are installed annually. Because of developments such as the privatization of telecommunications and the shift to market economies in Mexico, Brazil and Argentina, demand is skyrocketing for technologies that will provide faster and farther-reaching access to information, including computers and software, LANs and telecommunication equipment. The figures are even two or three times greater for China, India, and Southeast Asian countries. In 2000, Mexico and Canada together purchased 24% of Orange County's exports, while the strong recovery of Asia caused the region's share of Orange County's exports to rise to 45%. Noticeable export surges came from China (51.3%), Malaysia (51.7%), Philippines (31.7%), Singapore (19.8%) and Thailand (54.5%). The "social deficits" and "green policies" emerging in these regions of the world are fostering extensive investments in biomedical equipment and environment-friendly technologies. In-depth implementation of the trade rules by WTO (World Trade Organization), and regional agreements such as NAFTA, ASEAN and MERCOSUR, will only reinforce these trends even further.

To the over 2,000 high-technology firms located in Orange County, gaining access to such booming international markets constitutes a golden opportunity for sustained increase in revenues, market share and exports. And, clearly, Orange County's key competitive strengths lie in high-tech, capital-intensive products and services, critical for the region's economy. Machines (including computers), electronic goods and instruments account for 85.3 percent, or $ 10.6 billion, of its merchandise exports, and more than one tenth of the region's jobs depend on exports. All told, Orange County exported more than $14.4 billion in high-technology items in 2000, a roaring 37% increase over the previous year. Specifically, Orange County's high-tech exports center around computers (over $ 2.3 billion), controlling instruments (over $ 2.1 billion), electronic components (at $ 1 billion), and medical instruments (at $ 1billion), with also sizable exports in biomedical, pharmaceutical, environmental, and information system and telecommunication technologies. Market access, however, is not easy to attain, considering the quite different business environments prevalent in these regions. In addition, there also exist a variety of business practices rooted in cultural, political and infrastructural differences, which may well determine the success of Orange County's high-technology firms.

Program Objectives and Components

In order to assist Orange County's high-technology firms to reach these booming markets, the California State University, Fullerton, College of Business and Economics (CSUF) and the Center for the Study of Emerging Markets (CSEM) have developed the International High-Technology Business Partnership Project (INTERTECH). This project will be funded by the U.S. Department of Education with $174,000 for the 7/02-6/04 period, with matching contributions from both CSUF and CSEM. The focus for the project's first year will be the North America / NAFTA and South America / MERCOSUR regions, and for the second year the project's focus will be on the Southeast Asia (including China and India) region.

Selection of these regions was made according to the preferences stated in a pilot survey of Orange County's leading high-tech firms. This project will provide the region's 2,000 biomedical, pharmaceutical, environmental, information and telecommunication technology firms with the practice-oriented, microeconomic, firm-level expertise they need in order to expand their business activities in specific countries and regions of interest. INTERTECH will also provide today's and tomorrow's business professionals with the educational background and current skills they will need to conduct business successfully in these markets on an ongoing basis.

A major component of INTERTECH will be a comprehensive database that will provide high-tech businesses in Orange County with timely, accurate, country-specific information about the cultural and business practices prevalent in the regions and countries of interest. Such practices comprise, among others, the marketing of products and services, the development of distribution channels, the introduction of new products and services, the management of technical support services, the financing of trade activities, the establishment of joint partnerships and the logistics of physical distribution. The target for participation in development of the database is 300 high-tech companies in Orange County, 150 high-technology counterparts in Mexico and Canada, 200 high-technology counterparts in South America, and 300 high-technology counterparts in Pacific/South Asia. The database will also include information about the degree of government intervention in each country, policies about foreign ownership and profit repatriation and work rules in each country. As a part of this program, CSUF will house and manage a one-stop referral / advising office for high-technology exporters and partners.

Another major component of INTERTECH will be the development and dissemination of industry-based standards for educating business managers, students, and personnel involved in international activities. Issues as such as: core economic-geographic knowledge; awareness of key sociocultural patterns; business, legal and social protocols; and language and communication needs will be covered. In addition, INTERTECH will incorporate these standards into international business courses and curricula in both business, academic, continuing education, and distance-learning settings.

INTERTECH will also implement a series of outreach mechanisms, including: an annual high-technology business conference; periodic newsletters and monographs; special-purpose assignments for high-tech professionals; internships for CSUF faculty and students in Orange County high-tech firms; the development of new instructional materials for business education; and the development and the delivery of management/employee training programs.

Program Contributions and Coordination

By boosting the competitiveness of Orange County's high-tech companies, by increasing their ability to conduct business successfully in South America, Southeast Asia, China, and India, by strengthening the ties between business and academia, and by educating tomorrow's business leaders in international trade, INTERTECH will enhance the region's economy and create  resources that will ultimately improve the profitability of high-tech companies throughout the United States. Overall, and most importantly, INTERTECH will build upon and further deepen the significant work already done through two highly successful prior initiatives anchored at CSUF: the Inter-Americas High-Technology Business Partnership Project (INTERAM), and the Trade to China and Southeast Asia (TCS) Project through the Center for Emerging Financial Markets.

Coordination of the INTERTECH project will rest with the CSUF's Center for The Study of Emerging Markets (CSEM). Dr. Joseph Greco, CSUF Professor of Finance is Principal Investigator and Project Director.