Significant Issues for the Future of Product Innovation

The value of a technology strategy has been increasingly discussed by R&D personnel and those involved in product development and business planning efforts. In this issue Albert Rubenstein and Americo Albala elevate this discussion by showing the importance of preparing a firm to compete by stressing the development of important, relevant technologies. Discovery and development must be channeled into areas that will be needed to support business initiatives likely to occur in the future. Albala stresses the importance of this change for the development of economies in nations that have been disappointed by the lack of success of importing technologies from more developed nations, while Rubenstein maintains that the pace of marketplace change requires a technology strategy in order to reduce the misapplication of scarce resources within the firm and the possibility of being blindsided by competitive developments. These essays continue a year-long series of contributions that the editor-in-chief solicited from members of the editorial board. Members were asked to reflect upon changes and opportunities that they see influencing our profession during the coming decade. Both of these short essays are designed to introduce new perspectives. It is not essential that you agree with the recommendations, but we hope that you are stimulated as you reflect on the issues they raise.     

Significant Issues for the Future of Product Innovation

What's happening in the world of product innovation? What are the tough issues that managers are facing? And what's going to happen in the remaining years of this decade? In this article, several members of the Editorial Board of The Journal of Product Innovation Management offer their ideas about where the important problems lie. This is the fodder for a good round table discussion and through the medium of this journal we'll engage in such a discussion in this and a subsequent issue.     

Relative Capital Shortage and Potential Output Constraint: A Gap Approach

Focusing on core‐infrastructure capital vis‐à‐vis productive capital, we propose a macroeconomic method to estimate their optimal utilisation ratio in production and their relative shortage in any period. The method is based on an adapted two‐gap model, estimated via linear programming, with application to Chile and Mexico over the 1950–2000 period. Core infrastructure appears to support a variable level of productive investment, relative capital shortage alternating and imposing constraints on potential output over time. This suggests an optimal investment trade off, based on a social opportunity cost that derives from the prevailing gap in any period.     

A contribution to estimate a benchmark capital stock. An optimal consistency method

There are alternative methods of estimating capital stock for a benchmark year. However, these methods are costly and time‐consuming, requiring the gathering of much basic information as well as the use of some convenient assumptions and guesses. In addition, a way is needed of checking whether the estimated benchmark is at the correct level. This paper proposes an optimal consistency method (OCM), which enables a capital stock to be estimated for a benchmark year, and which can also be used in checking the consistency of alternative estimates. This method, in contrast to most current approaches, pays due regards both to potential output and to the productivity of capital. It is applied to 45 cases for nine OECD countries and six Latin American ones. It works reasonably well, and it requires only small amounts of data, which are readily available. It appears to exhibit similar accuracy to alternative methods, but it is virtually inexpensive in both time and funding.