Mind the Gap: Convergence of Technology and Technology of Convergence in Italian Regions, 1982-2001

The paper investigates the patterns of Total Factor Productivity (TFP) convergence across Italian regions, in the period 1982-2001. According to the main theoretical approaches, two different concepts of convergence may be devised, strongly intertwined. Beta-convergence applies when poor, lagging behind countries tend to grow faster than the rich and leading ones, while sigma-convergence refers to the reduction of the cross-regional dispersion of the productivity index over time. We start from the distinction between “first†and “second†capitalism, representing two areas interested by different and idiosyncratic evolutions of the industrial structure after the World War II. The former area consists of North-western regions, while the latter basically refers to North-eastern and Adriatic regions. While North-eastern regions were characterized by higher TFP levels in 1982, the “second capitalism†regions showed up sensible lower levels. The hypothesis of convergence of TFP found strong econometric support, as we could reject both the hypothesis of no-mean reversion and that of no convergence (Lichtenberg, 1996). The evidence abut sigma convergence is even more striking, as TFP dispersion has been decreasing since 1985, with a speeding up in the second half of the 1990s. We argue that this pattern of convergence is the result of catching up process in which laggards are still able to deploy the growth potential of the post-fordist model of industrialization, while leading regions, according to the Wolff’s law, have slowly exhausted those opportunities. Empirical evidence suggests that this is occurring through the routinization of innovative activity and the support of R&D carried out within Universities and public labs. This witnesses the key role of both innovation and knowledge spillovers from academia to the business system and stresses once more the need to sustain the provision of funds to the public research system.

The diffusion of regional innovation capabilities: evidence from Italian patent data

This paper investigates the diffusion of regional innovation capabilities within the manufacturing sector. The competence-based theory of the region allows for combining Schumpeter's view upon innovation and business cycles and the notion of round of growth elaborated by Perroux. Innovation capabilities spread within the region long after the expansion of the propulsive sector, due to contagion dynamics and learning by interacting. Adopting a methodology for the analysis of diffusion processes, the paper presents empirical evidence on Italian regions. The results support show that in late-industrialized regions the diffusion of innovation capabilities is faster than in the early-industrialized ones. The role of R&D and complementary changes in the economic structure is also investigated

ICT capital and service complementarities: The Italian evidence

This paper investigates whether ICTs hardware and services play a complementary role in boosting economic growth. The main argument is that investments in ICTs fixed capital are a necessary but not sufficient condition leading to productivity gains, above all in late adopter countries. Their effective implementation indeed requires on the one hand a changing economic structure characterized by a growing weight of service sectors, on the other hand complementary investments in ICTs services, directed to ease the integration of the new technologies within firms' boundaries. The analysis is conducted on a late-industrialized country like Italy, and shows that in lagging countries the weak impact of ICTs adoption is the result of three converging forces: relatively high share of manufacturing sectors, low adoption levels of ICTs in traditional manufacturing sectors, inadequate investments in ICTs services

The diffusion of regional innovation capabilities: evidence from Italian patent data

This paper investigates the diffusion of regional innovation capabilities within the manufacturing sector. The competence-based theory of the region allows for combining Schumpeter's view upon innovation and business cycles and the notion of round of growth elaborated by Perroux. Innovation capabilities spread within the region long after the expansion of the propulsive sector, due to contagion dynamics and learning by interacting. Adopting a methodology for the analysis of diffusion processes, the paper presents empirical evidence on Italian regions. The results support show that in late-industrialized regions the diffusion of innovation capabilities is faster than in the early-industrialized ones. The role of R&D and complementary changes in the economic structure is also investigated

Mind the Gap: Convergence of Technology and Technology of Convergence in Italian Regions, 1982-2001

The paper investigates the patterns of Total Factor Productivity (TFP) convergence across Italian regions, in the period 1982-2001. According to the main theoretical approaches, two different concepts of convergence may be devised, strongly intertwined. Beta-convergence applies when poor, lagging behind countries tend to grow faster than the rich and leading ones, while sigma-convergence refers to the reduction of the cross-regional dispersion of the productivity index over time. We start from the distinction between "first" and "second" capitalism, representing two areas interested by different and idiosyncratic evolutions of the industrial structure after the World War II. The former area consists of North-western regions, while the latter basically refers to North-eastern and Adriatic regions. While North-eastern regions were characterized by higher TFP levels in 1982, the "second capitalism" regions showed up sensible lower levels. The hypothesis of convergence of TFP found strong econometric support, as we could reject both the hypothesis of no-mean reversion and that of no convergence (Lichtenberg, 1996). The evidence abut sigma convergence is even more striking, as TFP dispersion has been decreasing since 1985, with a speeding up in the second half of the 1990s. We argue that this pattern of convergence is the result of catching up process in which laggards are still able to deploy the growth potential of the post-fordist model of industrialization, while leading regions, according to the Wolff's law, have slowly exhausted those opportunities. Empirical evidence suggests that this is occurring through the routinization of innovative activity and the support of R&D carried out within Universities and public labs. This witnesses the key role of both innovation and knowledge spillovers from academia to the business system and stresses once more the need to sustain the provision of funds to the public research system

Recombinant Knowledge and Growth: The Case of ICTs

The economics of recombinant knowledge is a promising field of investigation. New technological systems emerge when strong cores of complementary knowledge consolidate and feed an array of coherent applications and implementations. However, diminishing returns to recombination eventually emerge, and the rates of growth of technological systems gradually decline. Empirical evidence based on analysis of the co-occurrence of technological classes within two or more patent applications, allows the identification and measurement of the dynamics of knowledge recombination. Our analysis focus on patent applications to the European Patent Office, in the period 1981-2003, and provides empirical evidence on the emergence of the new technological system based upon information and communication technologies (ICTs) and their wide scope of applications as the result of a process of knowledge recombination. The empirical investigation confirms that the recombination process has been more effective in countries characterized by higher levels of coherence and specialization of their knowledge space. Countries better able to master the recombinant generation of new technological knowledge have experienced higher rates of increase of national multifactor productivity growth.

Pecuniary Knowledge Externalities: Evidence from European Regions

The paper investigates the effects of agglomeration and specialization of technological activities on regional productivity growth,applying the notion of pecuniary knowledge externalities. The latter are indirect interdependencies between firms mediated by the price system. Pecuniary knowledge externalities enable to appreciate both the positive and negative effects associated with the regional concentration of knowledge generating activities. Our analysis leads to specify the hypothesis of an inverted U-shaped relationship between the agglomeration of innovation activities and productivity growth. The empirical investigation, based upon 138 European regions in the years 1996 through 2003, supports the hypothesis that agglomeration yields diminishing positive net effects beyond a maximum. The homogeneity of knowledge generating activities however reduces absorption costs and hence rises the net benefits at each agglomeration level.

The Knowledge Base Evolution in Biotechnology: A Social Network Analysis.

This paper applies the methodological tools typical of social network analysis (SNA) within an evolutionary framework, to investigate the knowledge base dynamics of the biotechnology sector. Knowledge is here considered a collective good represented as a co-relational and a retrieval-interpretative structure. The internal structure of knowledge is described as a network the nodes of which are small units within traces of knowledge, such as patent documents, connected by links determined by their joint utilisation. We used measures referring to the network, like density, and to its nodes, like degree, closeness and betweenness centrality, to provide a synthetic description of the structure of the knowledge base and of its evolution over time. Eventually, we compared such measures with more established properties of the knowledge base calculated on the basis of co-occurrences of technological classes within patent documents. Empirical results show the existence of interesting and meaningful relationships across the different measures, providing support for the use of SNA to study the evolution of the knowledge bases of industrial sectors and their lifecycles.Knowledge Base, Social Network Analysis, Variety, Coherence, Industry lifecycles; exploration/exploitation