Published online by Cambridge University Press: 22 September 2009
Introduction
This chapter aims to analyze the determinants of European industrial strength in a selected number of sectors vis-à-vis the United States and Japan. We take a comparative bottom-up approach, presenting a series of results from the analysis of the six sectors (pharmaceuticals and biotechnology, chemicals, telecommunications, software, machine tools and three subsectors in services) examined in this book.
Our starting point is that differences in firms' rates of innovation and countries' economic performance are greatly affected by the features of learning, the knowledge base, the types of actors and networks involved in innovation, and the institutional setting of innovative activities.
For the six sectors we enquire, where major differences in the structure and working of sectoral systems across countries are present, whether these differences affect the international performance of countries, and whether characteristics of the sectoral systems have been major factors for industrial leadership in each sector. Section 2 provides a link between the sectoral system approach and the analysis of the determinants of industrial leadership. The sectoral system approach suggests that, in the majority of cases, differences in technological expertise and their impact on sectoral performance cannot be understood in a vacuum or simply on the basis of investment strategies at the level of the firm; rather, that they need to be analyzed with respect to many other relevant dimensions that characterize a sector and its dynamics over time. Section 3 assesses the main relationships between the characteristics of the sectoral system and economic performance in sectors.
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