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The Computer Software Industry in East and West: Do Eastern European Countries Need a Specific Science and Technology Policy?

  • Jürgen Bitzer

National science and technology (S&T) systems are often mentioned as a condition for competitiveness of high technology sectors. Therefore, public S&T policies should actively support the development of national S&T systems. In particular in Eastern Europe an active S&T policy is often demanded to support the development of the supposed domestic "high technology potential". This paper shows that this hypothesis is ill-founded in the case of the software sector. With an industrial economic analysis of the software sector it is shown, that a S&T policy is widely not able to fulfil this expectation. The analysis of the different market segments: standard and individual software, shows that the competition is carried out on axes which can widely not be influenced by a S&T policy. The links between software enterprises and the S&T systems are very weak, which is the result of the conditions of software development and the competition axes used in the software industry. Therefore, only few, and very general, starting points remain for an active S&T policy. Main starting points are: the improvement of the education in modern software technology, improvement of patent protecting laws and their enforcement, and introduction of standardisation procedures and quality standards.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.38503.de/dp149.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 149.

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Length: 48 p.
Date of creation: 1997
Date of revision:
Handle: RePEc:diw:diwwpp:dp149
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  1. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
  2. Swann, Peter & Shurmer, Mark, 1994. "The emergence of standards in PC software: who would benefit from institutional intervention?," Information Economics and Policy, Elsevier, vol. 6(3-4), pages 295-318, December.
  3. Gandal, Neil, 1995. "Competing Compatibility Standards and Network Externalities in the PC Software Market," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 599-608, November.
  4. Shurmer, M & Swann, P, 1995. "An Analysis of the Process Generating De Facto Standards in the PC Spreadsheet Software Market," Journal of Evolutionary Economics, Springer, vol. 5(2), pages 119-32, June.
  5. Cottrell, Tom, 1994. "Fragmented standards and the development of Japan's microcomputer software industry," Research Policy, Elsevier, vol. 23(2), pages 143-174, March.
  6. Prusa, Thomas J & Schmitz, James A, Jr, 1994. "Can Companies Maintain Their Initial Innovation Thrust? A Study of the PC Software Industry," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 523-40, August.
  7. Kende, Michael, 1994. "A note on backward compatibility," Economics Letters, Elsevier, vol. 45(3), pages 385-389.
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