Economics

    For the past few years today, the pharmaceutical industry has not done well, threats posing to this industry are numerous and have call for a number of innovation to which are driven and determined by other numerous factors. The main decisive factors in this sector are politics, scientific and commercial. Political framework come in very critical as there is no industry facing regulations more than pharmaceutical health care research based sector of the economy. Life expectancy rise is attributed to breathtaking advances made by his industry as it has made many breakthroughs in combating various ailments. The main driving force behind the pharmaceutical industry is technology edge which requires research and developments that always come with huge costs because developing a drug is like finding a hidden needle in a haystack. Pharmaceutical industries is greatly driven and determined by the globalization factor, which still arrows down to extensive research with the geographical differences difficulties as the main challenge here. For example Roche Company has established facilities for research globally to remain competitive internationally. Modern biological technology is a major technology in the 21st century this is used together with information technology and automation to open new perspectives in life sciences especially in medicine (Franz 2-7).

The financial institutions have had a number of innovations which have led to varying financial services to the clients, though this has given the central banks a big challenge in implementing the policies on the institutions. We have to note that economic growth is promoted only by well-organized and developed financial system. This brings the discussion to forces driving financial innovation. Information technology advances in the banking systems have reduced the accounting products costs lie in the mutual funds. A number of computer upgrade systems have made feasible actions that need speedy calculations in the banking system. One of such current technological advances is the ATMs (Automatic Teller Machines). All these innovations in the bank centralize towards cost reduction to maximize revenue and reduce any costs as much as possible (Monetary Authority of Macao).

    The modern automobile industry I manufacturing is highly technically sophisticated and complex. For quality production in the industry, manufactures have invested a lot of time and money in research and technological innovations. Technology has been the major force I this industry Machines and tools that are programmable, Near-Net Castry, supercomputing, complicated visualization techniques and virtual manufacturing, data management and multi speed data communication, technical forging techniques among others (John 3).

How International Trade Development helps accelerate the Innovation Process and Technological Change.
    The International trade has globally adopted a number of policies and regulations that favor the rapid development of technology and innovation processes, these include International trade has allowed location of Research and Development (RD) in foreign countries, buying new technologies from foreign countries firms through licensing from younger firms and through agreements by research institutions from the public sectors. The large firms can form alliances to create entry barriers to other companies to use complementary assets that have niche in creating new knowledge.  The multinational companies have the mandate to acquire patent rights in foreign countries and finally International trade accelerates innovation through technology exploitation abroad through licenses sale through production in foreign countries or through export (Marcela  Vivien 280).

The Microeconomic and Macroeconomic Foundations of a National Innovation System
    The United States innovation systems is of a very large scale and this is the major distinguishing factor to other OECD nations like Germany, Japan and France, even in the post war periods US Research and Development on the national scale was heavy. This investment is basically around three major sectors Universities, Industry and the Federal Government. Another outstanding difference of the US innovations systems in the postwar era is that it did commercialize these technologies in its economy. Other small companies have also been very vital in the system in the fields of computer software and hardware, robotics, microelectronics and biotechnology during the last four decades. The contrast policies to other nations I the innovation systems were US antitrust statutes and the military Research and Development. However, currently the US innovations have not matched its counterparts in the manufacturing sectors like in the robotics and computer technology integrated manufacturing. The current United States Industrial Research is mainly focused to electrical sector of the industry unlike the concentration in chemical industries as recorded in history. The Universities and research hare publicly funded through the federal government. The big part of publicly funded education on innovations was to promote research on agricultural systems, for over past 150 years the agricultural products have been significant in industrial and export development in the US economy.
The Japan innovation systems were initially weak and desperate and it was actually viewed to be copying other nations to catch-up in technological advances. Japan imported super technology, hired foreign engineers to its factories. During the Meiji Restoration startup minds came up in industries and people were highly educated and the willingness to run unique businesses, technology assimilation ability was in Japan, these were the driving forces in the national innovations in Japan. This Meiji Restoration prompted the Japan government to import current technologies to catch up with other modern countries. The government provided effective and efficient communication systems, utilities, roads education among others

    Finally, the French innovation system can be attributed to post-World War two periods. The specific features to France include special institution on fundamental research (CNRS) is properly organized and funded, dual higher education sector producing highly technical trained people called the Grandes Ecoles who are the industrial managers cum engineers and finally the pervasive element of government involvement in scientific and technical skills and its assimilation in production processes.

Trade Evolution and its high Technology component.
    To explain the evolution and high technology component in US, Germany, Japan and France I have adopted the study of nanotechnology patenting to critically analyze trade evolution in the four countries between the years 1976-2008. Universities play a major role in the evolution specifically in reference to US, UK and Canada. Nanotechnology is the main techno-paradigm that has had big impacts on manufacturing process of production and innovations in high-tech sectors in fact it is the next industrial revolution.

Factors affecting terms of trade between US, UK, Germany, France and Japan
    The cost of production have a major hurdle to deal with for both the countries, some of the high costs involved in the production process include and not limited to labor, land, taxes, capital and trade incentives imposed by the economy exporting or on the other hand the importing economy. The raw materials availability is also another problem to deal with in the international trade, they are expensive to buy and above all there is shortage in the raw materials leading to low production or high costs of products (Boggs 1).The movements of the exchange rate is another challenging factor in the terms of trade. Each and every country has placed very high taxes on the other country making the trade even ineffective on profitability. Some of the high taxes charged on international trade include the bilateral taxes, unilateral taxes, multilateral taxes and some trade restrictions depending on the state policies. These countries have also imposed on themselves heavy non-tariff barriers like health standards, environmental issues and some safety standards to be met. There have been shortage of foreign exchange to pay for the imports and lastly the effect of locally produced goods prices plus the supply by foreign country on similar goods have effects on the general prices (Boggs 7).