The Dynamics of Knowledge Externalities

The Dynamics of Knowledge Externalities

Localized Technological Change in Italy

Cristiano Antonelli and Federico Barbiellini Amidei

This book elaborates a new dependent and localized growth theory based upon knowledge externalities by making two important contributions. Firstly, it elaborates the hypothesis that total factor productivity growth stems from pecuniary knowledge externalities that consist in the access to localized external knowledge, at costs that are below equilibrium levels. Secondly, it implements the economic analysis of complex dynamic systems with a novel approach to understanding the role of knowledge interactions and knowledge governance mechanisms in the generation of new technological knowledge within economic systems characterized by webs of interdependence.

Chapter 1: Technological Change and Italian Growth 1950–1992: An Intriguing Puzzle

Cristiano Antonelli and Federico Barbiellini Amidei

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

Extract

The economic growth of the Italian economy in the second part of the twentieth century provides large and systematic evidence about fast rates of growth of output and especially total factor productivity, and yet a lack of effort in the formalized generation of technological knowledge, as measured by traditional indicators such as expenses in research and development (R&D) activities or patents. Since the 1990s, a wealth of case study evidence regarding sectors, firms and regions ‘discovered’ the relevance and complexity of the innovative processes at work during the 50 post-war years. This evidence shows that the Italian economy experienced, up to the early 1990s, fast and intensive growth, mainly driven by the increase of total factor productivity engendered by the widespread introduction of technological and organizational innovations. So far, the Italian case provides puzzling evidence of the growth of an industrial economy characterized by low levels of R&D expenditure and yet high levels of growth of total factor productivity. The solution to the puzzle can be found in the systemic congruence that has emerged in the Italian economy between the organization of the generation of technological knowledge and the traditional characteristics of the economic and industrial structure. This book aims to draw attention to the relevance and uniqueness of the dynamics of technological change that characterized the industrial system in Italy. Identifying and framing in a structured and coherent interpretative context the significant established and novel elements of empirical evidence, the book shows how, contrary to current opinion,...

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