Localized technological change and the quest for productivity growth

In recent years there has been renewed interest upon the analysis of the direction of technological change and its effects on the actual efficiency of production processes after the introduction of non-neutral technological changes. The empirical evidence shows that significant changes in the distribution of revenue across production factors have been taking place in the last thirty years in the major OECD economies; specifically in many countries the share of labor has diminished while the share of capital has increased.

These changes in the distribution of income can be considered the consequence of the introduction of directed technological changes biased towards labor saving innovations aimed at reducing the use of labor after the increase of unit wages so as to make the most efficient use of capital, by now the most abundant production factor. The paper presents a framework of analysis based on a model of localized technological change that accounts for both the shift and the bias of technological change in the context of an induced innovation approach. This work presents also preliminary cross-country evidence on the direction of technological change and its effects.

About Cristiano Antonelli

Cristiano Antonelli (1951) is chair professor of economics at the Department of Economics of the University of Torino and Director of the graduate programme of the School of Economics of Institutions and Creativity. He is the managing editor of Economics of Innovation and New Technology and an associate editor of Information Economics and Policy. He is a member the Board of Trustees of the Fondazione CRT. He has been a Rockefeller Fellow at the MIT (1982-1985) and a junior economist at the OECD (1978-1980). He has been a member of the Board of Telecom Italia (1998 and 1999), and of the Scientific Board of ENEA (from 1999
to 2003). He has held appointments at the Victoria University of Manchester, the University of Paris-Dauphine, the University of Nice, the Federal University of Rio de Janeiro and the University of Aix-en-Provence. He is been vice-president of the International Schumpeter Society in the years 2000-2004. The main results of his recent research are now available in “Localized technological change. Towards the economics of complexity” (London, Routledge, 2008) as well in his previous books The Microeconomics of Technological Systems (Oxford University Press, Oxford, 2001), The Economics of Innovation, New Technologies and Structural Change (Routledge, London, 2003) and The Path Dependent Complexity of Localized Technological Change: Ingredients, Governance and Processes (Routledge, London, 2007 forthcoming).