Chris Freeman - Rationale and Method

• Starting point:

• Traditionally economists have failed to properly examine how technical change comes about.

• But…

• New growth theory

• New growth theory privileges education, research and experimental development as the basic factors underlying economic growth.

• Shift in focus driven by shift in employment patterns

• Research and inventive activities account for only a small proportion of “info” employment

• But R&D is at the heart of the global economy - produces bulk of the new materials, products, processes and systems

• Growth of a professionalized system of R&D is

– "perhaps the most important social and economic change in twentieth century industry".

• 1870s first specialized R&D labs appear in industry.

• Previously advance of technology to due mainly to direct involvement in the production process

• Adam Smith - "a great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen.”

• Modern R&D contrasts with this by dint of:

• its scale,

• scientific content and

• the extent of its professional specialisation

• Professionalisation is associated with:

• the increasingly scientific character of technology

• the growing complexity of technology and the partial replacement or batch/custom production by flow/mass production lines

• trend towards division of labour creates specialised R&D labs

• Freeman, addresses the operation of R&D from traditional economic perspective - efficiency in the deployment of scarce resources.

• Thus he seeks to address the following questions:

• 1. How can we improve the flow of new information, knowledge, inventions and innovations?

• 2. What kind of economies of scale are therein research or in development?

• 3. Can the gestation period for innovation be shortened?

• 4. What kind of firms are most likely to innovate and under what market conditions?

• 5. What types of incentives are most effective in generating invention and innovation?

• Traditional reluctance to examine invention and research in this way creates:

• mythology around invention • a magic wand approach to science and

technology

• "What is not understood may often be feared or become the object of hostility."

• R&D revolution of the 20th C. involves a fundamental change in the relationship between society and technology.

• Consider the argument that science and technology and autonomous

• scientists concerned with discovery

• engineers concerned with practical application

• Empirical evidence to suggests that science and communication with the scientific community is vital for contemporary technical innovation.

• Thus we have science-associated technologies

• Thus the R&D system represents the point of entry for science into the industrial system.

• Advent of new science-based technologies has affected the way in which improvements and exchanges are made in production

• Improvements and changes now involves some grasp of theoretical scientific principles.

• Creates substantial problems between specialist and non-specialist - alienation.