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 9: The Measures of Innovative Activity in Italy

Cristiano Antonelli and Federico Barbiellini Amidei

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

Extract

9.1 INTRODUCTION Italian economic growth in the second half of the twentieth century provides large and systematic evidence of fast rates of total factor productivity growth, and yet low levels of effort in the generation of technological knowledge, as measured by traditional indicators such as expenditure on R&D activity or patents. A mainly quantitative approach, which includes some interpretive tools explicitly based on the economics of innovation, is adopted here. The analysis concentrates on industry, because of the particular relevance it assumed during the examined historical period, the contribution it made to overall productivity growth, the innovation processes developed and the role played in national and international technology flows. The role of innovation is crucial when interpreting the Italian economic growth experience in the four decades after World War II. Total factor productivity increased significantly for Italian industry, in comparative terms, until 1990 notwithstanding the severe international productivity slow down that has prevailed since the early 1970s. The empirical analysis shows how total factor productivity experienced a fast increase, not only in modern industries, but also in traditional sectors. The rejuvenation of the traditional industries clustered within industrial districts appears to be one of the key characteristics of the process. In this context, the emergence of key sectors specializing in the supply of dedicated capital and intermediary goods was, at the same time, an input and an output of the process leading to the creation of industrial and technological filieres where systematic user–producer interactions implemented internal learning processes....

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