Technology as Problem-Solving Procedures and Technology as Input-Output Relations: Some Perspectives on the Theory of Production

In this work, inspired by Winter [2006], in fact of vintage 1968, we discuss the relation between three dierent levels of analysis of technologies, namely as (i) bodies of problem-solving knowledge, (ii) organizational procedures, and (iii) input-output relations. We begin by arguing that the "primitive" levels of investigation, "where the action is", are those which concern knowledge and organizational procedures, while in most respects the I/O representation is just an ex post, derived, one. Next, we outline what we consider to be important advances in the understanding of productive knowledge and of the nature and behaviors of business organizations which to a good extent embody such a knowledge. Finally, we explore some implications of such "procedural" view of technologies in terms of input-output relations (of which standard production functions are a particular instantiation). We do that with the help of some pieces of evidence, drawing both upon incumbent literature and our own elaboration on micro longitudinal data on the Italian industry.Theory of Production, Organizational Routines, Problem-solving Knowledge, Production Function, Micro-heterogeneity

Energy, Development, and the Environment: An Appraisal Three Decades After the "Limits to Growth" Debate

This work builds upon some long-term secular regularities concerning the relation between consumption of energy, technological progress and economic growth and reassesses the old question raised around forty years ago in the "limits to growth" discussion (Meadows et al. [1972]), namely are the current patterns of development and in particular the current patterns of energy use environmentally sustainable? The questions we shall address are the following. First, the environmental sustainability of patterns of energy consumption that for long have implied the notion of the environment as a free good, without any negative social externalities and even less so any environmental threat. Second, the importance - and limits - of relative price changes with respect to the dynamics of consumption of energy. Third, the role of fundamental discontinuities between different "technological paradigms".Energy Consumption, Emissions, Sustainability

Energy, development, and the environment: An appraisal three decades after the "limits to growth" debate

This work builds upon some long-term secular regularities concerning the relation between consumption of energy, technological progress and economic growth and reassesses the old question raised around forty years ago in the limits to growth discussion (Meadows et al. [1972]), namely are the current patterns of development and in particular the current patterns of energy use environmentally sustainable? The questions we shall address are the following. First, the environmental sustainability of patterns of energy consumption that for long have implied the notion of the environment as a free good, without any negative social externalities and even less so any environmental threat. Second, the importance - and limits - of relative price changes with respect to the dynamics of consumption of energy. Third, the role of fundamental discontinuities between different technological paradigms

Technology as problem-solving procedures and technology as input-output relations: Some perspectives on the theory of production

In this work, inspired by Winter (2006), in fact of vintage 1968, we discuss the relation between three different levels of analysis of technologies, namely as (i) bodies of problem-solving knowledge, (ii) organizational procedures, and (iii) input-output relations. We begin by arguing that the primitive levels of investigation, where the action is, are those which concern knowledge and organizational procedures while in most respects the I/O representation is just an ex post, derived, one. Next, we outline what we consider to be important advances in the understanding of productive knowledge and of the nature and behaviors of business organizations which to a good extent embody such a knowledge. Finally, we explore some implications of such procedural view of technologies in terms of input-output relations (of which standard production functions are a particular instantiation). We do that with the help of some pieces of evidence, drawing both upon incumbent literature and our own elaboration on micro longitudinal data on the Italian industry

Technological revolutions and the evolution of industrial structures. Assessing the impact of new technologies upon size, pattern of growth and boundaries of the firms

In this work we discuss the impact of the new ICT techno-economic paradigm upon the vertical and horizontal boundaries of the firm and ask whether the change in the sources of competitive advantage has resulted in changes in the size distribution of firms and also in the degree of concentration of industries. Drawing both on firm-level and national statistical data we assess the evolution of the overall balances between the activities which are integrated within organizations and those which occur through market interactions. While the new paradigm entails ``revolutionary'' changes in the domain of technology, the modification in industrial structures has been somewhat more incremental. Certainly, the vertical and horizontal boundaries of firms have changed and together one is observing a turnover in the club of biggest world firms accounting also for a shift in the relative importance of industrial sectors. Nonetheless, we do not observe an abrupt fading of the Chandlerian multidivisional corporation in favour of smaller less-integrated firms.New techno-economic paradigm; Organizational change; Vertical integration; Boundaries of the firm; Visible hand.

Turbulence underneath the big calm? Exploring the micro-evidence behind the flat trend of manufacturing productivity in Italy

Italy ranked last in terms of manufacturing productivity growth according to OECD estimates over the last decade with a flat, if not declining, trend. In this work we investigate the underlying firm-level dynamics of enterprises on the grounds of a database developed by the Italian Statistical Office (ISTAT) covering the period 1989-2004 and containing information on more than 100,000 firms. Over the period not only the indicators of central tendency of the distribution of labour productivities have not significantly changed, but also the whole sectoral distributions have remained relatively stable over time, with their support at least not shrinking or even possibly widening over time. This is even more surprising if one takes into consideration the 'Euro' shock that occurred during the period of investigation. On the contrary we observe that inter-decile differences in productivity have been increasing. Further, heterogeneous firms' characteristics (i.e. export activity and innovativeness) appear to have contributed to boost such intra-industry differences. Given such wide heterogeneities we resort to quantile regressions to identify the impact of a set of regressors at different levels of the conditional distribution of labor productivity. One phenomenon that we observe is what we call a tendency toward 'neo-dualism' involving the co-existence of a small group of dynamic firms with a bigger ensemble of much less technologically progressive ones.productivity; firm dynamics; market selection; trade; euro shock; quantile regressions

What do firms know? What do they produce? A new look at the relationship between patenting profiles and patterns of product diversification

In this work we analyze the relationship between the patterns of firm diversification, if any, across product lines and across bodies of innovative knowledge, proxied by the patent classes where the firm is present. Putting it more emphatically we investigate the relationship between "what a firm does" and "what a firm knows". Using a newly developed dataset matching information on patents and products at the firm level, we provide evidence concerning firms' technological and product scope, their relationships, the size-scaling and coherence properties of diversification itself. Our analysis shows that typically firms are much more diversified in terms of products than in terms of technologies, with their main products more related to the exploitation of their innovative knowledge. The scaling properties show that the number of products and technologies increase log-linearly with firm size. And the directions of diversification themselves display coherence between neighboring activities also at relatively high degrees of diversification. These findings are well in tune with a capability-based theory of the firm

Technological revolutions and the evolution of industrial structures: Assessing the impact of new technologies upon size, pattern of growth and boundaries of the firms

In this work we discuss the impact of the new ICT techno-economic paradigm upon the vertical and horizontal boundaries of the firm and ask whether the change in the sources of competitive advantage has resulted in changes in the size distribution of firms and also in the degree of concentration of industries. Drawing both on firm-level and national statistical data we assess the evolution of the overall balances between the activities which are integrated within organizations and those which occur through market interactions. While the new paradigm entails revolutionary changes in the domain of technology, the modification in industrial structures has been somewhat more incremental. Certainly, the vertical and horizontal boundaries of firms have changed and together one is observing a turnover in the club of biggest world firms accounting also for a shift in the relative importance of industrial sectors. Nonetheless, we do not observe any abrupt fading away of the Chandlerian multidivisional corporation in favour of smaller less-integrated firms

Inside the virtuous circle between productivity, profitability, investment and corporate growth: An anatomy of Chinese industrialization

This work explores the dynamics of the "virtuous circle" driving the impressive Chinese catching-up and growth by investigating the micro relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. Interestingly and somewhat puzzlingly, we find that productivity variations, rather than relative levels, are the prevalent productivity-related determinant of firm growth. Moreover, the direct relation between profitability and firm growth is much weaker and its contribution to the explanation of the different rates of firm growth is almost negligible. The only visible profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activities are related to higher firm growth

Inside the Virtuous Cycle between Productivity, Profitability, Investment and Corporate Growth: An Anatomy of China Industrialization

This article explores the dynamics of market selection by investigating of the relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. First, we find that productivity variations, rather than relative levels, are the dominant productivity-related determinant of firm growth, and account for 15%-20% of the variance in firms' growth rates. The direct relation between profitability and firm growth is much weaker as it contributes for less than 5% to explain the different patterns of firm growth. On the other hand, the profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activity is related to higher firm growth