Edited by Ron Boschma and Ron Martin
Chapter 7: Pecuniary Externalities and the Localized Generation of Technological Knowledge
1 Cristiano Antonelli 1. Introduction The literature on knowledge spillovers has been growing exponentially in the recent years. This literature has elaborated the Marshallian understanding of technological externalities where knowledge is a production factor spilling into the atmosphere of industrial districts, at no costs for perspective users either to acquire or to use it: knowledge can be acquired with no transaction and communication costs. The new growth theory has further elaborated this literature with the distinction between generic and specific technological knowledge. Generic technological knowledge is germane to a variety of uses, while specific technological knowledge is embodied in production processes and routines: as such it has strong idiosyncratic features. ‘Inventors’ can appropriate specific knowledge; generic knowledge instead retains the typical features of the Arrovian public good. The appropriability of specific knowledge provides sufficient incentives for investment in knowledge-generating activities. The assumption about the intrinsic complementarity between generic and specific knowledge is the basic engine of the process. Innovators generate generic knowledge while they are engaged in the introduction of new specific knowledge embodied in new products and new processes. The production of specific knowledge takes advantage of the collective availability of generic knowledge. The spillover of generic knowledge helps the generation of new specific knowledge by third parties and yet does not reduce the incentives to the generation of new knowledge for the strong appropriability of the specific applications. Each firm has unlimited access to the spillovers of generic knowledge that can be used with no efforts. According to...
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