From 1971 until 1986, Japanese share in high technology export market increased

From 1971 until 1986 Japan’s share in the high technology export market increased by almost 10 per cent whereas the other large countries experienced a loss in market share of almost as much as 12 percent.
     Despite these nuances it cannot be denied that small countries are less involved in high-tech export markets. Why is this? As already stated, high-tech markets are characterized by rapid progress, complexity and the need for a strong base and sustained progress in R & D (Research and Development). These characteristics of high-tech are increasing the trend toward even greater economics of scale because of high costs and high risks.
      Furthermore, an understanding of user’s needs and the supply of education and support services are also becoming more and more important in high-tech markets. These are more difficult to handle in international markets with a diversity of languages, economic structures and cultures. These factors make it difficult for small countries to use export to overcome the disadvantages of a limited domestic market. Thus large countries with large domestic markets have a distinct advantage in high-tech production because of growing economics of scale and ready access to a large number of potential users.
      Another possible reason why small countries are less involved in high-tech markets is that the transportation costs of low-tech products, say, the cost of agricultural products or bricks, are often relatively higher. Because of this the market size is geographically limited and such products may be more likely to be exported from a small country than from a large one.
      An explanation of why Small countries might be less involved in high-tech markets has just been given. In the future significant start-up costs and leader advantages make it unlikely that small countries can hope to break into high-tech markets in which large countries already have the lead. Our empirical evidence does not clearly indicate that small countries are becoming even less specialized in the high-tech export sectors and more specialized in low-tech. It is also possible that small countries occupy certain places within some high-tech sectors. However, it is exactly the lower general level of high-tech specialization, combined with the difficulties of becoming specialized in high-tech, that has led certain observers to conclude that the economic future of small countries looks bleak. It is for the above reasons that we have to question the real need for small countries to hurry up in trying to seize large shares in the international high-tech market. It may not do much good for their own economic growth.