Technology and Industrial Performance. Technology Diffusion, Productivity, Employment and Skills, International Competitiveness

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Technology and Industrial Performance. Technology Diffusion, Productivity, Employment and Skills, International Competitiveness;

OECD, Paris, 1996; 198 pp., FF260; US$50.00; DM76.

This report examines how technology is developed and diffused among industries and countries across the OECD area. Drawing on extensive, internationally-comparable data, it analyzes the impact of technology on productivity, jobs and skills, and international competitiveness at a detailed industrial level.

In terms of R&D and technology diffusion, the report shows that service industries are the main users of technology, and therefore the main clients for the technologically sophisticated machinery and equipment which is developed primarily by a cluster of high-technology manufacturing industries. In the diffusion process, the share of technology that a firm obtains through imports has increased over time. Bigger countries purchase less technology from abroad than smaller ones, which depend on imports for more than 50 percent of all technology acquired. The bulk of this technology comes from the information technology cluster of industries, which is the cluster that is growing fastest.

The report illustrates two trends in productivity: In manufacturing, it is mainly industries' own R&D expenditures that have driven productivity growth, while in the services, it is the diffusion of technology that drives growth. Productivity gains have been greatest in the machinery sector of manufacturing and in the information and communication technologies segment of services. Imported technology also has a strong impact on productivity growth. The report suggests that such findings indicate that technology can offer growing benefits for the economy as a whole.

Surveying the long-term evolution of employment in OECD economies, the report identifies shifts from manufacturing to services, and toward high-technology, high-wage, and science-based jobs in manufacturing. At the same time, there is a process of upskilling taking place: High-skilled workers are being employed at a faster rate than low-skilled workers. The report views the role of technology in this process as complex, but positive. As the OECD economies have restructured, technology has encouraged the emergence of new fields of activity, which have provided new opportunities for jobs.

Evidence also suggests that technology encourages the upskilling trend within sectors. Industries that have invested more in research and performed more innovative activity have tended to acquire more human capital, expecting that more skills and innovation, combined, will raise economic performance.

In terms of trade and international competitiveness, evidence shows that since the 1970s there has been a significant change in the structure of international trade, with exports from high-technology industries now constituting about a quarter of OECD manufactured exports. …