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      Classification of Industries by Level of Technology: An Appraisal and some Implications

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            Abstract

            Modern growth theory acknowledges that a country's economic prosperity depends in large part on its capacity for technological innovation. Empirical evidence, however, supports the view that not all sectors are equally innovative. As a result, it seems desirable from a public policy perspective to identify and promote sectors displaying both a high innovation rate and, in an increasingly competitive international economy, a high degree of international competitiveness. It is frequently argued that the high-tech industry sectors, in contrast to low-tech sectors, satisfy both conditions, with the clear implication that public policy should be directed to enhancing the performance of high-tech sectors. This approach raises at least two important issues. The first is whether such classifications can be meaningfully constructed given both the intractability of the concepts involved and the difficulties in data collection. A second issue is the basic assumption that policy emphasis should be placed on technology-intensive industries because they have a greater impact on growth. In this paper, we argue that while it may be possible to construct indices of technological intensity that are useful for some purposes, the ones that are currently proposed do not, in fact, address questions of economic growth and firm performance very well. In part, this is a reflection of the technicalities involved in formulating and operationalising the indices, but it also reflects problems in the underlying premise, namely technology-intensive sectors are more growth-inducing than low-tech sectors. We call, therefore, for the adoption of a more sophisticated and detailed approach that would provide a sensible classification of industries and new policy insights.

            Content

            Author and article information

            Journal
            cpro20
            CPRO
            Prometheus
            Critical Studies in Innovation
            Pluto Journals
            0810-9028
            1470-1030
            December 2000
            : 18
            : 4
            : 417-436
            Article
            10032400 Prometheus, Vol. 18, No. 4, December 2000, pp. 417-436
            10.1080/08109020020008523
            8a8a33a6-0c7b-4ad7-9fe4-e81827771e6e
            Copyright Taylor & Francis Group, LLC

            All content is freely available without charge to users or their institutions. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles in this journal without asking prior permission of the publisher or the author. Articles published in the journal are distributed under a http://creativecommons.org/licenses/by/4.0/.

            History
            Page count
            Figures: 0, Tables: 0, References: 21, Pages: 20
            Categories
            Original Articles

            Computer science,Arts,Social & Behavioral Sciences,Law,History,Economics
            High-TECH Low-TECH Industries,Economic Growth,Policy Implications,Innovation,Intensity

            References

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            2. Hatzichronoglou T.. 1997. . “'Revision of the high-technology sector and product classification'. ”. In STI Working Papers . , Vol. Vol. 216. , p. 4OECD/GD. .

            3. Hatzichronoglou T.. 1997. . “'Revision of the high-technology sector and product classification'. ”. In STI Working Papers . , Vol. Vol. 216. , p. 4OECD/GD. .

            4. 1997. . Oslo Manual: Proposed Guidelines for Collecting and Interpreting Technological Innovation Data . , p. 30 Paris : : OECD. .

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            16. Felsenstein D. and Bar-el R.. 1989. . 'Measuring the technological intensity of the industrial sector: a methodological and empirical approach'. . Research Policy . , Vol. 18:: 239––52. .

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            21. Utterback J. M.. 1994. . Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change . , p. 158––60. . Harvard Business School Press. .

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