Is there a name for distinguishing manufactured goods requiring little/no R&D and ones requiring high/sustained R&D costs? Do these two types of manufactured goods have a name in economics? For example if one divides manufactured goods into the categories of "Type-A" and "Type-B" then:
Type-A manufactured goods are those requiring permanently sustained R&D costs to compete e.g:
- Computer Processors
- Proprietary Software
- Jet Engines
Type-B manufactured goods are those requiring no long-term R&D costs to compete e.g:
- Plastic Bottles
- Fly Swatters
Besides a name for these two types of manufactured goods, I would be interested in information explaining how they differ (other then by definition) and how countries come to have differing Type-A and Type-B export ratios based on regulations and access to raw materials. For example:
Because the R&D costs of Type-A goods accumulate with each improved version and because companies keep the R&D details secret, that money over time adds up and becomes a barrier to entry for anyone wanting to sell goods in that market that can't copy or reverse engineer all of your previous R&D investments. Moreover because of this large barrier to entry, the markets for Type-A goods are most often oligopolies, (and occasionally if the R&D costs lead to the discovery of new technology then you may obtain a monopoly) thus they can charge much more for their goods, to the point that labor costs are no longer a competitive issue. For example Raytheon can pay engineers 40-USD an hour in Virgina to assemble a JT9D jet-engine, despite the same labour costing 4-USD an hour in East Asia, because Boeing 747s which use those jet-engines have such high profit margins, that the extra labour cost isn't a big deal. Likewise the goods in Type-B are never improved/upgraded substantially and because it is widely known how to make them, there is almost no barrier to entry and anyone can create competitive products, this means there are a massive number of competitors and thus likely very small profit margins - to the point that labor costs are a competitive issue. For example Nike can not pay shoe assemblers 15-USD an hour in the US because otherwise they would have to increase the price of their shoes, making it no longer competitive in most markets - causing them to lose money, however Nike can pay shoe assemblers 3-USD an hour in Thailand because legal wages there are low enough to still give them a profit margin. So some key differences are:
Type-A goods are more advanced, require inventing new models, more profitable and does not compete on labour costs
Type-B goods are less advanced, require copying existing models, less profitable and do compete on labour costs
Now as a corollary - countries whose exports are mostly Type-A goods can maintain higher GDPs with smaller populations, whereas countries whose exports are mostly Type-B goods often require much larger populations to maintain a similar GDP, moreover countries whose exports are mostly Type-A can often enact higher minimum wage laws without lowering their GDP too much, whereas countries whose exports are Type-B can't enact higher minimum wage laws without lowering GDP, likewise countries whose exports are mostly Type-A have a greater incentive to create and enforce intellectual property and patent laws whereas countries whose exports are mostly Type-B have a greater incentive to not create and to not enforce intellectual property and patent laws, lastly since by definition manufactured goods are either Type-A or Type-B, we see that countries which produce neither of these goods must then rely on agriculture and raw-materials for their exports, and these countries are less-developed, except in tiny populations with high value resource rights.
For example over 80% of both Russia and Qatar's exports are oil/natural-gas while Russia has a poorer population over 50 times as large as Qatar's few million very rich people, likewise South Korea despite having half as many people as Russia has a GDP 10% larger because they export Type-A goods that are much more profitable then oil, or as another example China has four times the population of the US, but their nominal GDP is 10% smaller because American Type-A goods are much more profitable then Chinese Type-B goods, moreover this nominal GDP gap is closing as China further industrializes and as their government has been working to develop many profitable domestic Type-A industries by both buying old bankrupt Type-A industries and or then subsidizing them until they can compete in global markets - for example both Huawei and SMIC, were either subsidized and unprofitable or subsidized with very small profit margins up until 5-10 years ago.
Thus by splitting up manufactured goods into two classes based on their R&D costs (what I called "Type-A" and "Type-B" goods) one can then more precisely characterize a bunch of other economic phenomena, which seems pretty useful? - So is there already a name for these two types of manufactured goods? Or perhaps already terminology for charactering manufactured goods based on the general amount/duration of R&D costs?
If my examples have errors or if I misused economic terms here, I apologies - I don't have much knowledge of economics beyond an introductory course I took at college several years ago.