Determinants of technical change: Empirical evidence from Switzerland

The purpose of this paper is to analyse both theoretically and empirically those factors which underlay the—empirically observable—inter-industry differences in technical progress. At the theoretical level economists agree more and more that technical progress can be explained at the industry level ey the following three factors: 1. the technological opportunities, 2. the appropriability conditions, meaning the ability to capture and protect the results of technical innovations, and 3. the market demand conditions.The basic theoretical model was tested with the help of two sets of Swiss data. One set was made available by Swiss Federal Office of Statistics and consists of quantitative information on R&D expenditures, R&D personnel, total employment and sales figures for 124 (4-digit SIC) industries for the year 1986. The second set was derived from a survey I carried out in the summer of 1988. 940 industry experts were approached: 358 of them, or 38 percent, covering 127 industries, completed the questionnaire. The items on the questionnaire were related to the two supply-side determinants of technical progress—items 1. and 2. above. For the empirical specification of the theoretical model, technical progress (as the dependent variable) was measured by three indicators: an output indicator, representing the introduction rate of innovations since 1970; two input indicators, share of R&D expenditures in sales and share of R&D personnel in total employment. All data were aggregated at the industry level (4-digit SIC). Three equations were estimated individually, using the OLS, GLS and Tobit methods.     

Will your Medicare claims stand up?

In the first two installments of our series, we gave you the details of reimbursement under the new Medicare fee schedule, and showed how to code evaluation-and-management services with the revised CPT system.* This issue, we'll tell what to expect from Medicare carriers as they teach and enforce the new payment rules.     

Policies for economic growth

Summary The old growth theory of the 1950s led to certain conclusions about the sorts of economic policies that would promote economic growth, and also about their limitations. The new growth theory of the 1980s makes much stronger assumptions and leads to correspondingly stronger conclusions about the scope of growth-promoting policy. This article argues that: (1) empirical work so far has neither confirmed nor denied the strong assumptions underlying the new theory; (2) the theory is worth pursuing because of its intrinsic interest and the possibilities it opens up; (3) whatever the final verdict on the new theory, both theory and evidence support the belief that significant long-run gains, even if not permanent changes in the growth rate, can be achieved by increased investment in the broadest sense, including human capital, technological knowledge, and industrial plant and equipment.Fifth Tinbergen Lecture delivered on October 4, 1991, in Amersfoort for the Royal Netherlands Economic Association