"Catching up in technology: entry barriers and windows of opportunity"


1988 (with L. Soete) "Catching up in technology: entry barriers and windows of opportunity". In G.Dosi et al. eds. Technical Change and Economic Theory, London: Francis Pinter, pp. 458-479.

Download: Perez-Soete TCh&EcTh_1988_on catching up1.pdf (4.12mb)

Table of Contents:


Introduction
Technology diffusion models and industrial growth and development:  
Some introductory comments  
A first approach to the real cost of production technologies 
Threshold levels and entry costs: a simple world 
    (a) Fixed investment: the basic cost  
    (b) The cost of closing the knowledge gap 
    (c) The cost of closing the experience and skills gap  
The timing of entry 
Technological evolution and the cost of entry as a moving target  
Windows of opportunity for catching up 
From product life cycles to techno-economic paradigms
 

Introduction:


The importance of 'foreign' technology and its international diffusion is undoubtedly a historically well-recognised factor in the industrialisation of both Europe and the United States in the nineteenth century, and even more strikingly of Japan in the twentieth century. That importance emerges again and significantly stronger from the evidence of the rapid industrialisation of some so-called newly industrialising countries, such as South Korea, over the last two decades.

In this chapter we begin to look at some of the Specific conditions under which technological catching up and imitation could take place. In a short introductory section, we set out, in line with the chapter by Metcalfe on diffusion, some of the most salient points with regard to diffusion theory which appear of relevance to theories of industrial development and economic growth. In the second section, we go in more detail into the conditions for imitators to enter and effectively catch up.

We begin with a static view of technologies in order to look at how the actual costs of developing, imitating or buying a production technology are influenced by the characteristics of the acquiring firm and by those of its location. We then introduce technological dynamism and examine how the various elements of those costs (and the barriers they erect for new entrants) increase or decrease as technologies evolve from introduction to maturity. This leads us to identify the importance of the timing of entry in terms of individual technologies. Finally, we introduce the interrelatedness of technologies in complex technology systems and the notion of changes in techno-economic paradigms, i.e. the emergence of radical discontinuities in overall technological evolution. This brings us to the concluding argument that catching up involves being in a position to take advantage of the window of opportunity temporarily created by such technological transitions.
Publications
 

"TECHNOLOGICAL REVOLUTIONS AND FINANCIAL CAPITAL:The Dynamics of Bubbles and Golden Ages"

Published 2002

'...the book fills an important gap in the literature on business cycles and innovations. I most strongly commend it to all those attempting to understand the past and future evolution of technology and the economy.'

Christopher Freeman, Emeritus Professor, SPRU,
University of Sussex, UK

'...Carlota Perez shows us that historically technological revolutions arrive with remarkable regularity, and that economies react to them in predictable phases. Her argument provides much needed perspective not just on history, but on our own times. And especially on our own information revolution.'

W. Brian Arthur, Santa Fe Institute, New Mexico

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Technological Revolutions Financial bubbles Installation Period Frenzy Deployment Period Golden Ages Dual strategy Techno‑economic paradigms Neo‑Schumpeterian Respecialization Synergy Turning Point Future markets Knowledge society Green growth Maturity Full global development Globalization Sustainability Socio‑economic development Paradigm shifts Irruption Market hyper‑segmentation