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Technological infrastructure and international competitiveness

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  • C. Freeman
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    Abstract

    The paper is probably the first written paper using the concept of 'the national innovation system' and it analyses how technological infrastructure differs between countries and how such differences are reflected in international competitiveness. It makes a critical review of new (in the 1980s) developments in the theory of international trade and confronts them with recent empirical results. It shows how competitiveness cannot be explained by wage rates-prices-currency rates. Technological leadership gives absolute rather than comparative advantage and technological leadership will reflect institutions supporting coupling, creating, clustering comprehending and coping in connection with technology. The analysis is rooted in historical context through references to Friedrich List and his criticism of Adam Smith and laissez-faire. Special emphasis is put on List's concept of mental capital. Finally, the analytical arguments are illustrated by the catching-up and forging ahead of first Germany and later Japan. The paper concludes that disequilibria in international trade will be persistent and that for laggard economy the free trade doctrine may be unduly restrictive. Another conclusion is that public investment in technological infrastructure and intellectual capital is crucial for successful economic development. It is pointed out that there is a need to couple education, science, trade and industry policy in order to build competitiveness. Copyright 2004, Oxford University Press.

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    Bibliographic Info

    Article provided by Oxford University Press in its journal Industrial and Corporate Change.

    Volume (Year): 13 (2004)
    Issue (Month): 3 (June)
    Pages: 541-569

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    Handle: RePEc:oup:indcch:v:13:y:2004:i:3:p:541-569

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    Cited by:
    1. Soete, Luc & Verspagen, Bart & Weel, Bas ter, 2009. "Systems of Innovation," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 062, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Manuel Mira Godinho & Sandro F. Mendonça & Tiago Santos Pereira, 2005. "Towards a taxonomy of innovation systems," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2005/13, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
    3. Sharif, Naubahar, 2006. "Emergence and development of the National Innovation Systems concept," Research Policy, Elsevier, Elsevier, vol. 35(5), pages 745-766, June.
    4. Castellacci, Fulvio & Natera, Jose Miguel, 2013. "The dynamics of national innovation systems: A panel cointegration analysis of the coevolution between innovative capability and absorptive capacity," Research Policy, Elsevier, Elsevier, vol. 42(3), pages 579-594.
    5. Fatas-Villafranca, Francisco & Jarne, Gloria & Sanchez-Choliz, Julio, 2009. "Industrial leadership in science-based industries: A co-evolution model," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 72(1), pages 390-407, October.
    6. Lehrer, Mark & Nell, Phillip & Gärber, Lisa, 2009. "A national systems view of university entrepreneurialism: Inferences from comparison of the German and US experience," Research Policy, Elsevier, Elsevier, vol. 38(2), pages 268-280, March.
    7. Alessandro Nuvolari & Michelangelo Vasta, 2012. "The Ghost in the Attic? The Italian National Innovation System in Historical Perspective, 1861-2011," Department of Economics University of Siena, Department of Economics, University of Siena 665, Department of Economics, University of Siena.

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