Institutional Arrangements of Technology Policy and Management of Diversity : The Case of Digital Switching System in France and in Italy

The importance of the development of a Digital Switching System (DSS) lies in its positive effect on the entire telecommunication network. DSS has provided greater reliability and speed, and enabled the introduction of new value added services, all of which have benefited the entire economic system. This chapter focuses on the development of DSS in France and Italy. We analyze how the 'organization' of a public research and development (R&D) programme can influence the relative success of a policy. By organization we mean coordination of the actors involved, and also the different technological options involved in innovation in telecommunications, which emerge, and should be publicly supported. Based on previous theoretical development, we state that the organization of a mission-oriented programme (such as the DSS) depends mainly on the learning ability of the policy maker and its proximity to the participating firms and institutions. Moreover, the management of technological diversity may have important impacts in terms of timing, costs, competition, technological diffusion and lock-in phenomena. The purpose of this chapter is to use this dynamic framework and evolutionary concepts to assess the relative success of the French and Italian DSS public programmes.