Knowledge-Intensive Entrepreneurship in Low-Tech Industries

Knowledge-Intensive Entrepreneurship in Low-Tech Industries

Edited by Hartmut Hirsch-Kreinsen and Isabel Schwinge

This book contributes to the discussion about the relevance of knowledge-intensive entrepreneurship for industrial innovation in the context of traditional low-technology industries.

Chapter 4: The impact of knowledge-intensive entrepreneurship on the growth and competitiveness of European traditional industries

Ioanna Kastelli and Yannis D. Caloghirou

Subjects: economics and finance, economics of entrepreneurship, economics of innovation, industrial economics, innovation and technology, economics of innovation

Extract

In this chapter, European traditional industries are identified with low-and medium-low-technology (LMT) sectors. More precisely, an attempt is made to examine the role of knowledge-intensive entrepreneurial ventures in fostering the competitiveness of these industries in Europe and thus improving their position in the international division of labor. The considerable specific weight of LMT industries in Europe is clearly shown by their large share in the manufacturing sector in terms of value added. In particular, LMT industries contributed approximately 55 per cent of the value added of total manufacturing in the EU-25 before the current economic crisis (European Commission, 2011). However, in the literature as well as in the public debate on growth, these important industries of modern economies are largely ignored, as the focus has almost exclusively been shifted to the high-technology industries and environments. In addition, LMT sectors have been ignored in policy discussions for a long time or considered 'archaic hangovers from an earlier era of capitalism' (Scott, 2006). It is widely accepted that European firms operating in traditional industries are facing increasing competitive pressure in globalized markets from companies in emerging countries (e.g. China, India, Brazil), as well as from firms in developing economies.

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