Does Technology Policy Matter?

Abstract

Do technology policies matter? Yes, but their effect overwhelmingly depends on the environment in which they operate. Particularly important is whether this environment promotes the broad diffusions of new ideas and the rapid adoptions of new technologies. If it does, policies aimed at encouraging innovation can yield spinnoffs across a broad range of economic activities. Coversely, in an environment characterized by low mobility of human and technological resources, the results of government-sponsored innovation will remain trapped in their originating sector or firm. The key problem for technology policies, therefore, is not that of generating new ideas, but rather of facilitating their widespread use - and this is equally valid for emerging and mature industries. In this sense, it is less important whether a country's firms operate in activites classed as "high-tech", "mid-tech" or "low-tech" than how effective they are in applying technological skills across the full range of their activites. The adequacy of national education and training systems appears to be a particularly important factor in this respect. The analysis is developed by examining three groups of countries.

Keywords: Technology policies, Innovation