Industrial Dynamics, Entrepreneurship and Innovation series
Edited by Hartmut Hirsch-Kreinsen and David Jacobson
Chapter 10: The Relevance of Services for High-, Medium- and Low-tech Firms – An Empirical Analysis in German Industry
10. The relevance of services for high-, medium- and low-tech ﬁrms – an empirical analysis in German industry Eva Kirner, Gunter Lay and Steﬀen Kinkel INTRODUCTION High-, Medium- and Low-tech Classiﬁcation of Industries In the past two decades the notions of ‘high-tech’ and ‘low-tech’ have become frequently-used categories which are generally applied to classify diﬀerent industries. The distinction between high- and low-technology sectors has been given increased consideration, especially in relation to innovation and competitiveness. It is often assumed that high-tech sectors are superior to low-tech sectors as regards their innovativeness and competitive strength. The classiﬁcation of high-, medium- and low-technology sectors was initially proposed by the OECD during the 1980s and has been widely adopted in diﬀerent contexts today (Hirsch-Kreinsen et al., 2005). This classiﬁcation is based on the share of sales spent on research and development (R&D) in diﬀerent industry sectors. Considering the average expenditure on R&D in a certain sector, the sector is classiﬁed either as a high-, medium- or low-tech sector. The usefulness of this classiﬁcation has been criticized by various scholars (Hirsch-Kreinsen et al., 2005; Von Tunzelmann and Acha, 2005). The arguments of these critical remarks can be summarized as follows: Traditionally, the concept low-tech and high-tech refers to industry sectors in general, not to single ﬁrms. However, depending on the degree of intrasectoral heterogeneity, a sectoral approach might be misleading because it reﬂects a sectoral average and ignores diﬀerences within the sector....
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