Dominique Foray

The knowledge-based economy: from the economics of knowledge to the learning economy

This chapter is about the production, diffusion and use of knowledge seen in an economic perspective. Fundamental distinctions between tacit and explicit knowledge and between knowhow, know-why, know-what and know-who are related to distinctions between public/private and local/global knowledge. It is argued that the idea of the economy as being knowledge based in its current stage is misleading and that it is more enlightening to assume that we have moved into a learning economy where interactive learning is a key to economic performance of firms, regions and nations. This is one reason why a narrow economics perspective is insufficient. The most serious weakness of standard economics is that it abstracts from the fact that agents are more or less competent and that learning processes enhancing competence are fundamental for the economic performance of organisations and regions. When it comes to understand industrial dynamics in the learning economy it is necessary to bring in other disciplines than economics in the analysis. JEL classification: L22, O31, O38

AN INTRODUCTION TO THE ECONOMY OF THE KNOWLEDGE SOCIETY

This introductory article reviews the main themes relating to the development of new knowledge-based economies. After placing their emergence in historical perspective and proposing a theoretical framework which distinguishes knowledge from information, the authors characterize the specific nature of such economies. They go on to deal with some of the major issues concerning the new skills and abilities required for integration into the knowledge-based economy; the new geography that is taking shape (where physical distance ceases to be such an influential constraint); the conditions governing access to both information and knowledge, not least for developing countries; the uneven development of scientific, technological (including organizational) knowledge across different sectors of activity; problems concerning intellectual property rights and the privatization of knowledge; and the issues of trust, memory and the fragmentation of knowledge.

Economic Fundamentals of the Knowledge Society

This article provides an introduction to fundamental issues in the development of new knowledge-based economies. After placing their emergence in historical perspective and proposing a theoretical framework that distinguishes knowledge from information, the authors characterise the specific nature of such economies. They go on to deal with some of the major issues concerning the new skills and abilities required for integration into the knowledge-based economy; the new geography that is taking shape (where physical distance ceases to be such an influential constraint); the conditions governing access to both information and knowledge, not least for developing countries; the uneven development of scientific, technological (including organisational) knowledge across different sectors of activity; problems concerning intellectual property rights and the privatisation of knowledge; and the issues of trust, memory and the fragmentation of knowledge.

The dynamic implications of increasing returns: Technological change and path dependent inefficiency

This paper addresses the issue of path-dependent selection and inefficiency, counterfactual methods and the empirical evidence employed in this research trajectory. The general message is basically that the theoretical argument to prove path-dependent inefficiency is relatively straightforward, while empirical demonstrations, as well as the analysis of welfare implications are much more difficult. In the first section, we briefly state the basic argument explaining how localized learning leads to an incomplete exploration of the variety distribution of a technology. We then synthesize the most interesting historical studies, which get potential regret results, and ask whether these results suggest a large welfare loss. To try to answer this question, we start from the critical arguments of Liebowitz and Margolis to discuss the theoretical and empirical difficulties of establishing path-dependent inefficiency.

Quandaries in the Economics of Dual Technologies and Spillovers from Military to Civilian Research and Development

Abstract In this paper we argue that the ‘standard’ view of the relationship between military and civilian technology is too simple and cannot account for the variety of historical experiences. In order to understand this relationship, attention must be paid to two things: that technologies have a lifecycle, in different parts of which different types of learning are important; and that the relationship between military and civilian sectors will change depending on the nature of the technology involved, in particular whether it is a process or a product technology. In addition, the standard view does not pay heed to the fact that there are specific organizational requirements to realize any potential cross-benefits. We describe a framework with which to analyse the various features of the relationship taking into account these considerations.

Technology and the environment: An overview

The article starts with a brief history of the debate on the interactions between technology and the environment. A short overview of each article of this special issue is then presented. Three cross-cutting “metathemes” emerge from the articles. The first deals with the characteristics of uncertainty, ignorance, and dispersed knowledge that have historically characterized the generation and distribution of environmental and technological knowledge. The second addresses the issue of possible tensions that exist between the forces of technological inertia and the forces of environmentally induced technological change. Finally, some policy dilemmas between short-and long-term environmental preservation and technological change objectives are discussed.

From smart specialisation to smart specialisation policy

Purpose – The purpose of this paper is to focus on the distinction between smart specialisation and smart specialisation policy and it studies under what conditions a smart specialisation policy is necessary. Design/methodology/approach – A conceptual framework is built based on historical evidence of successful dynamics of structural changes at regional level qualified as “smart specialisation”. The identification of market and coordination failures that are likely to impede the occurrence of spontaneous process of smart specialisation makes a good case for a smart specialisation policy. Findings – The paper highlights important design principles for the policy process that should help to minimise potential risks of policy failures and policy capture. Research limitations/implications – The paper does assess the effect of smart specialisation on innovation and growth at regional level because it is too early to observe and measure effects. The paper confines itself to conjectures about the effects of suc...

The Centrality of Entrepreneurial Discovery in Building and Implementing a Smart Specialisation Strategy

This paper is an attempt to clarify the essence of a smart specialisation strategy as a policy process. It aims in particular to explain why entrepreneurial discovery is an important design principle in this policy process. Finally, it presents the policy framework in which various tools and instruments need to be mobilized to maximize the likelihood of entrepreneurial discovery and facilitate the local concentration of resources in, and the early growth of the new activities generated by these discoveries.

Information Distribution and the Growth of Economically Valuable Knowledge: A Rationale for Technological Infrastructure Policies

Science and technology policies in the West in recent years have been directed toward fostering the generation of new knowledge as the basis for commercially exploitable innovations, rather than toward improving the distribution of existing scientific and engineering knowledge and increasing the accessibility of the latest additions to the knowledge stock. This particular policy thrust has been maintained for too long, and there now is a pressing need to restore some balance; in other words, to undertake measures that would raise not only the marginal social rate of return on future R&D investments, but also would increase the social payoffs from past R&D expenditures.

Discovery in the context of application

Abstract This article addresses several issues raised by a very particular pattern of knowledge generation, called “discovery in the context of application.” The case of a hypersonic aircraft research program illustrates that the organizational design of such programs is a very complex matter. The problem cannot be dealt with in the conventional way by having different organizational forms for different phases of the process—say, one for the research phase another for the development phase, a further for the testing phase, and so on—because of its integral nature. Two modes of organization are considered but neither, on its own, seems to be quite adequate to govern the management of the whole process. The need is to deal with the problem of finding a balance between two (distinct) organizational imperatives: the need to manage the interaction between a large number of projects that are carried out in different locations, and the need to bring a wide range of problem solvers into a single entity. The former mode is necessary to facilitate experiments in different directions and to decrease the risk of missing a possible successful design, the latter to develop the infratechnologies and instrumentalities that will underpin the research agenda.