Verspagen, Bart

English

Research Papers in Economics

Book Reviews 727
gence—computed on national levels, the gross
aggregated effort expended on science and tech-
nology appears to be converging over time.
However, before proponents of the conver-
gence thesis celebrate prematurely, it should
be emphasized that Archibugi and Pianta go
on in the remaining seven chapters to show
that notions of convergence and divergence,
at least in terms of scientific and technological
activities, are considerably more complex. Be-
cause what the authors discover is that, in fact,
not only does considerable specialization of sci-
entific and technological activities take place
within countries, but with the exception of only
two nations —France and the Netherlands—
the degree of technological specialization within
each country has increased considerably over
time. This would suggest that the scientific and
technological activities of countries may be be-
coming less and not more similar over time.
Through their careful analysis, Archibugi and
Pianta discover a rich array of striking findings.
For example, virtually every country possesses
a distinct constellation of technological advan-
tages and disadvantages, not dissimilar to the
notion of comparative advantage found in the
international trade literature. European tech-
nological strengths apparently do not lie in the
more dynamic high-technology sectors, leading
the authors to conclude that the share of Euro-
pean scientific and technological activity is
likely to decrease in the future. The authors
point out that Germany, which is the leading
technological power of Europe, is not special-
ized in the most dynamic and fastest growing
technological sectors. Japan, by contrast, has
concentrated its technological competencies in
those high-technology sectors which are grow-
ing most rapidly. This leads the authors to pre-
dict not only a continued ascent in the Japanese
share of technological activities, but also,
a warning about European performance which
can be identified behind the aggregate picture:
the current sectoral strengths and weaknesses
of Europe and Japan are hkely to lead to an
increasing gap between the technological perfor-
mances of the two regions, (p. 88)
In chapter eight the authors propose and find
considerable support for the hypothesis that the
degree to which a country specializes in its sci-
entific and technological activities is inversely
related to its size. Apparently only the largest
countries can afford to engage in technological
activities across the entire scientific spectrum.
Thus, scholars interested in the economic im-
plications of geography should find this work
striking in that the spatial distribution of scien-
tific and technological activities is anything but
homogeneous—apparently geography matters.
Similarly, scholars involved in the debate about
the role of national systems of innovation in
promoting technological change and ultimately
productivity, growth, and international compe-
titiveness may find confirmation that the vari-
ance in scientific and technological performance
across developed countries refiects profound
differences in national systems of innovation.
An important lesson from this study is that,
contrary to the standard assertion made in nu-
merous macroeconomic endogenous growth
models, science and technology, or R&D, are
anything but homogeneous. Rather, as Archi-
bugi and Pianta convincingly demonstrate, the
scientific and technological activities of devel-
oped industrialized nations are better charac-
terized as being specialized and highly differen-
tiated. Apparently it not only matters how much
is allocated towards science and technology but
also how those scientific and technological re-
sources are allocated.
DAVID B. AUDRETSCH
CEPR and Wissenschaftszentrum Berlin fiir
Sozialforschung
Competitiveness, convergence, and interna-
tional specialization. BY DAVID DOLLAR AND
EDWARD N. WOLFF. Cambridge and London:
MIT Press, 1993. Pp. 228. $35.00. ISBN 0-
262-04135-9. JEL 93-i589
Economic growth is back on the agenda of
the economics profession. Among the academic
work in this field, however, contributions with
a clear and direct practical interpretation of eco-
nomic facts and problems, are less common
than some policy makers or analysts would
wish. Dollar and Wolffs book is exactly aimed
at filling this gap, as they set out to analyze
postwar growth performance in the major
OECD countries, and relate their findings to
the public (U.S.) policy debate on issues such
as deindustrialization, loss of competitiveness,
the role of knowledge and other factors in pro-
ductivity growth, and globalization.
The central theme in their analysis is conver-728 Journal of Economic Literature, Vol. XXXII (June 1994)
gence. Thus, they look at the trends in disper-
sion of productivity levels (labor productivity
as well as total factor productivity), trade pat-
terns, capital/labor ratios, and factor prices be-
tween the major OECD countries. Although
in the end the main concern of the book seems
to be aggregate productivity (as the main deter-
minant of relative welfare levels), the argument
revolves around a detailed account of sectoral
convergence trends.
During the 1960s and 1970s (and to a lesser
extent in the 1980s), why did the main OECD
countries (and a selected number of developing
countries) show such strong convergence of (la-
bor) productivity relative to the U.S., which
emerged out of the second World War as the
absolute productivity leader in virtually every
branch of economic activity? Each of the chap-
ters (besides the first and final, which serve as
introduction and conclusion, respectively) sets
out one of the pieces of the author's solution
to this question. In this solution, the sectoral
breakdown of growth and convergence patterns
forms the major argument.
Thus, it is shown that (until the mid-1970s)
productivity convergence was taking place in
almost every sector. However, countries gener-
ally did not converge to the U.S.—frontier by
shifting their employment mix in the direction
of high-productivity industries. Until the mid-
1970s, the main source for labor productivity
convergence was sectoral convergence in total
factor productivity, or in the authors' interpre-
tation, catch-up in technological competence.
From the mid-1970s onwards, convergence
slowed down considerably, mainly due to stag-
nating technological convergence. Substitution
eflFects (convergence in capital/labor ratios) tend
to explain the little convergence that was taking
place from that time on.
This development led to the situation that
in the 1980s, all major OECD countries were
very close to each other with regard to techno-
logical capabilities. This is reflected in the fact
that in the 1980s, many diflFerent productivity
leaders are found for diiFerent branches. By the
1980s, according to Dollar and WolflF, the world
had changed from one technological leader (the
U.S. in the 1960s) to one of "equal technological
rivals. " The chapter on trade performance finds
that although productivity levels were converg-
ing, specialization patterns were diverging. To-
gether, these two conclusions imply that each
ofthe new "leaders" has its own specific combi-
nation of branches from which it built its
"shared leadership."
The policy conclusions that are drawn in the
book are mainly presented in the final chapter,
and relate mostly to the U.S. debate (although
the policy advice given is so broad that it applies
to other countries as well). The main contribu-
tion to this debate seems to be the message
that U.S. policy should not be based upon pessi-
mism. The assumed loss of U.S. competitive-
ness is interpreted as an inevitable trend, and
the U.S. leadership ofthe 1960s as an extraordi-
nary situation not likely to emerge again.
Viewed in this way, the U.S. is no longer con-
sidered the big loser in the convergence wave
of the 1960s and 1970s, but instead is seen as
"first among equals" in the 1980s. Investment
in knowledge, infrastructure, and education are
seen as the most important aspects of public
policy in this new situation.
This is certainly a sound conclusion, but it
is not always clear where it is based in the em-
pirical analysis ofthe rest ofthe book. The step
from the detailed empirical accounts in the
main body of the book, to the broad policy con-
clusions in the final chapter is a giant, although
certainly not counter-intuitive, one. It there-
fore seems to me that the most important con-
tribution of this book lies in the detailed empiri-
cal work, and not so much in the general policy
conclusions. The sectoral data sources used, to-
gether with the careful interpretation by the
authors, certainly adds significantly to our un-
derstanding about growth in the postwar pe-
riod.
At the same time, however, this detailed sec-
toral approach implies an important limitation
of the book. Due to data-availability, the cover-
age of other than major OECD countries is con-
fined to a single chapter on the performance
of five so-called "Newly Industrializing Coun-
tries " (NICs). Thus, issues such as the experi-
ence of less developed OECD-countries fall
outside the scope of the analysis. Moreover,
the choice for "hard statistics" also implies that
the discussion of many historical and institu-
tional factors (which must necessarily be based
on case study material) is absent. Finally, the
richness of their data set provides a temptation
to dwell on issues that only seem vaguely re-
lated to the central theme of the book (such
as the detailed refutation of the simpleBook Retiiews 729
Heckscher-Ohlin trade theory) that the authors
cannot always resist.
However, these remarks do not detract from
the significance of the volume, which deserves
to be read not only by the specialist in the
growth field. The above remarks serve only to
point out that this book, like most others, can-
not provide the reader with the final answer
on what determines the relative growth perfor-
mance of an economy.
BART VERSPAGEN
University of Limburs, The Netherlands
Technology and the wealth of nations. Edited
by NATHAN ROSENBERG, RALPH LANDAU, AND
DAVID C. MOWERY. Stanford: Stanford Uni-
versity Press, 1992. Pp. xiv, 443. $49.50,
cloth; $16.95, paper. ISBN 0-8047-2082-7.
JEL 93-0718
This book, which originated in a conference
at Stanford University, is concerned with the
factors influencing the commercialization of
new technology. Without question, the ability
of organizations and firms to commercialize new
technology is at least as important as the ability
to develop it. For example, the available evi-
dence suggests that the difficulties U.S. firms
have had in competing with their Japanese ri-
vals have stemmed more from problems in com-
mercializing new technology than in originating
it (see Mansfield 1988). Certainly, this is a topic
where more research can usefully be carried
out.
The authors of the papers are well-known
economists and technologists, many of whom
have had extensive experience in the analysis
and management of industrial R&D. In the first
two parts of the book, Michael Boskin and Law-
rence Lau discuss the role of technology and
capital formation in economic growth; Richard
Nelson puts commercialization of technology
into a context that recognizes that technology
has public aspects as well as private; Ralph Lan-
dau and Nathan Rosenberg describe how com-
mercialization has taken place in the chemical
process industries; Steven Durlauf takes up rel-
evant issues in the determination of long-run
output in industrialized economies; B. Douglas
Bemheim and John Shoven compare the cost
of capital in Japan and the United States; David
Teece discusses strategies for capturing the fi-
nancial benefits from technological innovation;
and Peter Huber analyzes liability and insur-
ance problems in the commercialization of new
products.
To illustrate the range of the discussion, con-
sider the papers by Nelson, Teece, and Landau
and Rosenberg. Nelson argues that:
To try to make universities more like industrial
labs will tend to take attention away from their
most important functions, which are as a major
, source of new public technological knowledge,
and as society s most efiFective vehicle for making
technological knowledge public, (p. 70)
Teece points out that, given that intellectual
property protection is often weak, the extent
to which an innovator can appropriate the re-
turns from its R&D investment may depend
on whether it has ready access to specialized
complementary assets required to produce and
market the innovation. If the technology itself
is easy to imitate, the innovator may be able
to appropriate a substantial proportion of the
returns only if it is in a favorable position with
regard to the availability and eflFectiveness of
such complementary assets. Based on this argu-
ment, he is skeptical of claims that manufactur-
ing does not matter, and that research and de-
sign will provide sufficient foundation to
guarantee economic growth. Landau and Ro-
senberg conclude that:
The history of the chemical industry forcefully
underlines the inadequacy of a neoclassical mi-
croeconomic approach that simply treats all in-
dustrial firms as homogeneous maximizing
agents, whose distinctive internal structure,
characteristics, and history are not examined,
or at least are not treated as central to the analy-
sis, (p. 116)
In the last three parts of the book, Ken-Ichi
Imai discusses the Japanese pattern of innova-
tion and its evolution; Franco Malerba de-
scribes the innovation process in the European
electronics industry; Ronald McKinnon and Da-
vid Robinson take up dollar devaluation, inter-
est rate volatility, and the duration of invest-
ment; Kiyonara Sakakibara and D. Eleanor
Westney describe Japan's management of
global innovation; David Mowery takes up in-
ternational collaborative ventures and the com-
mercialization of new technologies; Ralph Go-
mory discusses the stages of the technology-
product relationship; William Howard and
Bruce Guile describe a National Academy of
Engineering study of the commercialization
process; and Sergio Barabaschi analyzes the

Competitiveness, convergence, and international specialization / David Dollar and Edward N. Wolff. Cambridge and London: MIT Press, 1993.

http://arno.unimaas.nl/show.cgi?fid=14554

Competitiveness, convergence, and international specialization / David Dollar and Edward N. Wolff. Cambridge and London: MIT Press, 1993.

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