WHOI-90-52

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The Advanced Marine Electronics Inrumentation Industry and the European Market: Governent Policies and International Competitivenes1 Abstract Porter Hoagland III and Hauke L. Kite-Powell Marne Policy Center Woos Hole Ocographic Institution Here we present the preliminar results of a series of 39 interviews with government officials and industr representatives in seven Europe countres concerning the influence of national and international government policies on the nature and development of the Europe marne electronic instrmentation (MI) markets. We describe the importce of the mare setor to Europe countres producing MEI tehnologies. Using some very restrictive assumptions, we estimate the size of the MEI market in Europe (about $1.2 bilion in 1987) to be roughly half the size of the U.S. market. Europe institutions are undergoing rapid .changes, including recnt increased emphasis on collaborative "technology trsfer" type resech efforts across setors (following the U.S. lead) and across national borders. We expet broadly defined marne markets to grow in Europe, thereby having a positive effect on the markets for marne electronics. But the extent to which U.S. firms ca continue to parcipate and maitan their position in the markets for MEI products and services in Europe remains unanswered. The best policy for U.S. firms may well be one of cautious optimism and close attention to the potential for strategic alliances with established and emerging Europe firms. Introduction Already, the Europe storm has begun to brew. The restrcturing of its defense electronics industr is one tocsin for the world outside Europe. Before it passes, we ca only speulate on the reaangement of the economic and politica strctures that wil ocur. Beause there wil 1 Presented at the meeting of the Marne Instrmentation.Panel, Woos Hole Oceaographic Institution, Woos Hole, Massachusetts, 12 September 1989. We thank Jim Broadus and Artur Gaines for their assistace in organizing and planning this resech. Funding was provided by the Marne Policy Center of the Woos Hole Oceaographic Institution and The National Ocea Service/NOAA through a grat to the Massachusetts Centers of Excellence Corpration, grant No. NA87-AA-D-MOO37. 13
e both winners and losers from the integration of the "common market," cries only of alarm sem premature.2 But whenever the "old world" threatens institutional innovation, it perhaps behooves the "new" to proc with vigilance and understading. In August of 1989, the General Electrc Company PLC (GEC) of Great Britan and Siemens AG of West Germany made a final "sweetened" tender offer of over $3 bilion to purchase their rival, the British defense and electronics concern, Plessey Company. The offer culminated a five yea hostile taeover battle initiated by GEC. Later that month, the French defense electronics giant Thomson CSF announce its planned acquisition of the defense electronics assets of N. V. Philps, the major Dutch electronics concern. Beuse Europe defense ministries trditionally have been loathe to approve foreign taeovers of defense contrctors, the Plessey taeover and the Philps acquisitions are watersheds. These events are importt more for their symbolism than their economic significance. They are representative of an envisaged "new" Europe--one in which consolidation and restrcturing in fundamenta industral sectors is expeted to lead to enhance economies of scale and improved international competitiveness. These events demonstrate conclusively that Europe governments are ready to begin "liberalizing" .their public procurement procss, at least within the common market. It is significant too that these governments perceive savings through the concentration of an industr in which "buy national" procurement policies are permitted under the GATT 3 As Europe acclerates its own unification, we can multinational trade negotiation process. expet to se similar events in other industral setors. Here we examine the implications of the integration of Europe for one such setor: advanced marne electronics. Although we draw upon examples from the advance marne technology field, our topic is of wider significace. The public policy issues we describe are identica to those faced by firms in any advance technology sector (although perhaps their relative weights may differ). As is 2 At a July 1989 meeting of the America Defense Preparedness Association, an industry group, a U.S. Deparment of Commerce official caled for America defense firms to "scramble" if they were interested parcipating in the Europe common market before Januar 1993 (NT, 1989). 3 The economic significance of this restructuring is extremely uncertn, and the symbolic effect may be of greater importce. However, a study sponsored by the Europe Community (EC) estimated that in 1984 alone two-thirds of a 6 bilion Europe currency unit (BECU; 1 ecu is roughly on a par with the dollar) "savings" from liberalize procurement policies would have accrued from a "long term restrcturing" effect in the defense equipment industry. Such a savings appes small in comparson to the $3 billon Plessey tender offer, but it represents only one yea. The savings is roughly between 3-9 percent of the estimated expeted tota "gains" from the removal of the common market's internal market barers (EC, 1988). These snapshot estimates should be regarded as only extremely speulative approximations. 14
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Page 47 and 48: An Overview of Technology Transfer
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Introduction The Status and Promi o
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in order to tae full advantage of t
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System Output The system output inc
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Concluding Remarks Obviously we are
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All is not new. Commentators someti
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of academic resech is critica, both
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stang point, the model allows the p
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of exchange among the university an
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and progras. Benefits, on the other
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14: 10 Technology Transfer and Inte
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15:30 Where do we stad now? Gary Gl
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Dr. Allyn C. Vine Mr. Malte von Mat
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50272.101 PAGE WHOI.90.52 REPORT DO
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