Technological capabilities and international competitiveness in the engineering industries

While it has often been argued that the machine tool industry is a ‘nodal’ industry as supplier of technology to other industries, this relationship has never been tested empirically. In this paper we analyze and find empirical support for the following two hypotheses: 1) The U.S. engineering industries have been negatively affected by the relative decline in the technological capabilities of the U.S. machine tool industry in the last decade. 2) The use of flexible manufacturing technologies has become one of the most influential factors for competitiveness in the last decade as a result of recent changes in the world economy.