This book can be read in two ways, either as a theoretical analysis of the patterns of technical change in modern economies with an illustrative case study on semiconductors, or, conversely, as an industry study with long (and unorthodox) theoretical premises. It has been written in a somewhat modular form so that both the theoretical parts and the empirical investigation are relatively self-contained. Both topics bear a major relevance. The semiconductor industry is at the core of the ‘microelectronics revolution’, whose impact on the structure of industry and the broader social environment can be compared to that of the fundamental technological innovations which marked an epoch of modern history such as the steam engine or electricity. Technical change, in general, is one of the fundamental engines of economic growth and structural transformation in modern societies.
The history of the discovery of the first transistor and of the fast and far-reaching innovative dynamics in semiconductor products and processes have already been told several times.l Here we will just try to interpret the basic features of the patterns of innovation and its determinants.
In the previous chapter, we have been trying to assess the determinants and the patterns of innovation, suggesting the existence of quite general procedures and directions of technical progress. The model based on technological paradigms and technological trajectories helped us in interpreting these broad regularities in the innovation process. We must now look more closely at the relationship between the patterns of technical change, on the one hand, and industrial structures, on the other hand. The task has to be twofold: one must try to assess first, the conditions which, on behavioural grounds, normally induce the company sector to innovate, and, second, the effects of technical change on the evolution of industrial structures.
In the previous chapter we analysed the effect of technical change upon industrial structures in relation to some fundamental variables (inter-firm technological lags and leads, productivity, prices, margins), under the assumption of a closed economy. We shall try now to extend the discussion to industries belonging to different countries and characterised by different capabilities to innovate and/or imitate.
The effects of technical change are not confined within any single industrial sector. The dynamics of each industry influences and is influenced by the patterns of change in the other industries by means of inter-industrial diffusion of innovations, changes in relative prices and relative profitabilities, and derived patterns of demand for the output of each industry sector which feature as an input in other industries’ techniques of production. Furthermore, there are a few directly macroeconomic dimensions related to the inter-sectoral adjustment mechanisms based on capital movements and to the relationship between technical change, on the one hand, and effective aggregate demand, foreign balances and international specialisation, on the other.
