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Low-Tech Industries and the Knowledge Economy: State of the Art and Research Challenges




This paper addresses a central problem for economic analysis and public policy in Europe. Should Europe focus on so-called high-technology or science-based industries in attempting to solve growth and employment problems? Or should it look to the growth prospects within the industries on which the European economy is actually based: low-technology and medium-technology industries (which we call ‘LMT industries’) in manufacturing and services? These questions are the focus of a European Commission research project called PILOT – ‘Policy and Innovation in Low-Tech’ (see This paper is a first output from the project – it addresses key issues in understanding LMT industries, mainly in terms of knowledge intensity and use. There are many who argue that high-technology industries are the bearers of the new knowledge economy. They argue that Europe should focus on knowledge intensive activities in such frontier areas as ICT, biotechnology and professional services. A related claim is that mature, traditional or LMT industries are likely to move to less developed countries. We claim that these perspectives are seriously mistaken. Taken together, LMT activities account for somewhere in the region of 97% of all economic activity in Europe. All European economies are trade-specialized in LMT products. All LMT industries are innovative – they generate significant proportions of their sales from new and technological changed products. Many LMT industries and products are surviving and growing on the basis of technological upgrading, high-grade design skills and the intensive application of knowledge to innovation. They have unique forms of industrial organisation and knowledge creation, complex links to science and technology knowledge infrastructures, and important regional dimensions. Here we focuses on the creation and use of knowledge in LMT industries. We claim that in the future the European economy, especially in the context of enlargement, will continue to rest on LMT activities. This implies that growth, competitiveness, cohesion and employment in Europe will depend on the performance of LMT industries. At the present time, the knowledge-creation problems faced by such sectors are neglected in policy arenas – but this will become a major challenge for EU innovation, technology and research policy.

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  • David Jacobson & Hartmut Hirsch-Kreinsen & Keith Smith & Staffan Laestadius, "undated". "Low-Tech Industries and the Knowledge Economy: State of the Art and Research Challenges," STEP Report series 200316, The STEP Group, Studies in technology, innovation and economic policy.
  • Handle: RePEc:stp:stepre:2003r16

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    References listed on IDEAS

    1. Véronique Ambrosini, 2001. "Tacit Knowledge: Some Suggestions for Operationalization," Journal of Management Studies, Wiley Blackwell, vol. 38(6), pages 811-829, September.
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    Cited by:

    1. Thierry Rayna & Ludmila Striukova, 2011. "Engineering versus Craftsmanship: Innovation in the Electric Guitar Industry, 1945–1984," Chapters,in: Knowledge Transfer and Technology Diffusion, chapter 8 Edward Elgar Publishing.
    2. Heidenreich, Martin, 2009. "Innovation patterns and location of European low- and medium-technology industries," Research Policy, Elsevier, vol. 38(3), pages 483-494, April.
    3. Pim Den Hertog & Faïz Gallouj & Jeroen Segers, 2009. "Measuring innovation in a ‘low-tech’ service industry: the case of the Dutch hospitality industry," The Service Industries Journal, Taylor & Francis Journals, vol. 31(9), pages 1429-1449, November.
    4. Kristin Ranestad, 2016. "The mining sectors in Chile and Norway, ca. 1870 - 1940: the development of a knowledge gap," Working Papers 0105, European Historical Economics Society (EHES).
    5. Eduardo Goncalves & Eduardo Almeida, 2009. "Innovation and Spatial Knowledge Spillovers: Evidence from Brazilian Patent Data," Regional Studies, Taylor & Francis Journals, vol. 43(4), pages 513-528.
    6. Asheim, Bjørn & Coenen, Lars, 2005. "The Role of Regional Innovation Systems in a Globalizing Economy: Comparing Knowledge Bases and Institutional Frameworks in Nordic Clusters," Papers in Innovation Studies 2005/3, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    7. Andrea Morrison, 2011. "Innovation and External Knowledge Sources in Industrial Districts: Evidence from an Italian Furniture Cluster," Chapters,in: Knowledge Transfer and Technology Diffusion, chapter 7 Edward Elgar Publishing.
    8. Havas, Attila, 2004. "EU Enlargement and Innovation Policy in Central European Countries: The case of Hungary," MPRA Paper 69872, University Library of Munich, Germany.
    9. Yannis D. Caloghirou & Aimilia Protogerou & Aggelos Tsakanikas, 2014. "Exploring knowledge-intensive entrepreneurship in high-tech and low-tech manufacturing sectors: differences and similarities," Chapters,in: Knowledge-Intensive Entrepreneurship in Low-Tech Industries, chapter 2, pages 17-41 Edward Elgar Publishing.
    10. Donata Favaro & Eniel Ninka & Margherita Turvani, 2011. "Human capital, technology intensity and growth in a regional context," ERSA conference papers ersa10p687, European Regional Science Association.
    11. Asheim, Bjorn T. & Coenen, Lars, 2005. "Knowledge bases and regional innovation systems: Comparing Nordic clusters," Research Policy, Elsevier, vol. 34(8), pages 1173-1190, October.
    12. Havas, Attila & Nyiri, Lajos, 2007. "National system of innovation in Hungary," MPRA Paper 67161, University Library of Munich, Germany.
    13. Rammer, Christian & Köhler, Christian & Murmann, Martin & Pesau, Agnes & Schwiebacher, Franz & Kinkel, Steffen & Kirner, Eva & Schubert, Torben & Som, Oliver, 2010. "Innovationen ohne Forschung und Entwicklung: Eine Untersuchung zu Unternehmen, die ohne eigene FuE-Tätigkeit neue Produkte und Prozesse einführen," Studien zum deutschen Innovationssystem 15-2011, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    14. Ewa Balcerowicz & Marek Peczkowski & Anna Wziatek-Kubiak, 2009. "The Innovation Patterns of Firms in Low and High Technology Manufacturing Sectors in the New Member States," CASE Network Studies and Analyses 0390, CASE-Center for Social and Economic Research.
    15. Mendona, Sandro, 2009. "Brave old world: Accounting for 'high-tech' knowledge in 'low-tech' industries," Research Policy, Elsevier, vol. 38(3), pages 470-482, April.
    16. Liang-Chih Chen, 2011. "Technological Learning and Capability Building in LMT Industries in Newly Industrializing Countries: Selected Examples from Taiwan," Chapters,in: Knowledge Transfer and Technology Diffusion, chapter 11 Edward Elgar Publishing.
    17. Petrou, Anastasia & Daskalopoulou, Irene, 2009. "Entrepreneurial culture and innovation in the services sector: case study evidence from Greece," MPRA Paper 22666, University Library of Munich, Germany.
    18. Havas, Attila & Nyiri, Lajos, 2007. "A magyar nemzeti innovációs rendszer: Háttértanulmány az OECD 2007/2008. évi innovációs országjelentése számára
      [National system of innovation in Hungary: Background report for the OECD Country Rev
      ," MPRA Paper 69379, University Library of Munich, Germany.
    19. Havas, Attila, 2007. "O alargamento da UE e a política de Inovação nos países da Europa Central: O caso da Hungria
      [EU enlargement and innovation policy in Central European countries: The case of Hungary]
      ," MPRA Paper 69874, University Library of Munich, Germany.

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