Open AccessNational policies for technical change: Where are the increasing returns to economic research?
Author(s) -
Keith Pavitt
Publication year - 1996
Publication title -
proceedings of the national academy of sciences of the united states of america
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 5.011
H-Index - 771
eISSN - 1091-6490
pISSN - 0027-8424
DOI - 10.1073/pnas.93.23.12693
Subject(s) - incentive , technical change , technological change , industrial organization , investment (military) , mainstream , economics , public economics , applied research , business , marketing , economic growth , politics , productivity , political science , macroeconomics , philosophy , epistemology , law , microeconomics
Improvements over the past 30 years in statistical data, analysis, and related theory have strengthened the basis for science and technology policy by confirming the importance of technical change in national economic performance. But two important features of scientific and technological activities in the Organization for Economic Cooperation and Development countries are still not addressed adequately in mainstream economics: (i ) the justification of public funding for basic research and (ii ) persistent international differences in investment in research and development and related activities. In addition, one major gap is now emerging in our systems of empirical measurement—the development of software technology, especially in the service sector. There are therefore dangers of diminishing returns to the usefulness of economic research, which continues to rely completely on established theory and established statistical sources. Alternative propositions that deserve serious consideration are: (i ) the economic usefulness of basic research is in the provision of (mainly tacit) skills rather than codified and applicable information; (ii ) in developing and exploiting technological opportunities, institutional competencies are just as important as the incentive structures that they face; and (iii ) software technology developed in traditional service sectors may now be a more important locus of technical change than software technology developed in “high-tech” manufacturing.