Competitive Industrial Development in the Age of Information : the Role of Cooperation in the Technology Sector. PDF
Preview Competitive Industrial Development in the Age of Information : the Role of Cooperation in the Technology Sector.
COMPETITIVE INDUSTRIAL DEVELOPMENT IN THE AGE OF INFORMATION As the global economy has evolved and matured, transnational corporations, small-to medium-sized enterprises (SMEs) and governments have emerged as the principal players in industrial development. Knowledge and technology have also taken on new importance as driving forces for economic growth. This work examines policy issues arising from these developments, which will be of fundamental importance in a twenty-first century Age of Information. Discussion focuses upon: • the role of national and subnational industrial policy in promoting economic performance (cid:127) the impact of tax policy upon domestic technology development (cid:127) bank financing of SMEs (cid:127) the need for cooperation in the development of economically viable industrial policy With special reference to the technology sector, contributors demonstrate that globally oriented industrial policy must promote both competition and cooperation in the domestic economy. Domestic competition must be viewed as a function of global competition, strengthening a country’s technological and economic development. However, domestic cooperation allows parties to compete on a global scale. It is concluded that this ‘New Competition’, embracing cooperation, is the key to understanding the four major policy issues discussed. Competitive Industrial Development in the Age of Information draws upon detailed case studies of technology sector industries to provide theoretical and empirical analyses of changing economies and changing policy needs. With contributors from academic, legal, financial and policy advisory backgrounds, this work advances research into policy questions of increasing importance. Richard J.Braudo is a Toronto- and Dallas-based Business Economist and Management Consultant. He has been a Business Economist for more than fifteen years and a lawyer since 1996. His research includes work on competition and constitutional law, health care, international trade policy, and e-commerce. ii Jeffrey G.MacIntosh is a Professor of Law at the University of Toronto. He has written extensively on topics relating to corporate and securities law and has recently focused his research upon the financing of small, high technology companies. ROUTLEDGE STUDIES IN INTERNATIONAL BUSINESS AND THE WORLD ECONOMY 1 STATES AND FIRMS Multinational enterprises in institutional competition Razeen Sally 2 MULTINATIONAL RESTRUCTURING, INTERNATIONALIZATION AND SMALL ECONOMIES The Swedish case Thomas Andersson, Torbjörn Fredriksson and Roger Svensson 3 FOREIGN DIRECT INVESTMENT AND GOVERNMENTS Catalysts for economic restructuring Edited by John H.Dunning and Rajneesh Narula 4 MULTINATIONAL INVESTMENT AND ECONOMIC STRUCTURE Globalization and competitiveness Rajneesh Narula 5 ENTREPRENEURSHIP IN A GLOBAL CONTEXT Edited by Sue Birley and Ian Macmillan 6 THE GLOBAL STRUCTURE OF FINANCIAL MARKETS An overview Edited by Dilip K.Ghosh and Edgar Ortiz 7 ALLIANCE CAPITALISM AND GLOBAL BUSINESS John H.Dunning 8 MULTINATIONAL ENTERPRISES FROM THE NETHERLANDS Edited by Roger van Hoesel and Rajneesh Narula 9 COMPETITION, GROWTH STRATEGIES AND THE GLOBALIZATION OF SERVICES Real estate advisory services in Japan, Europe and the United States Terrence LaPier 10 EUROPEAN INTEGRATION AND FOREIGN DIRECT INVESTMENT IN THE EU The case of the Korean consumer electronics industry Sang Hyup Shin 11 NEW MULTINATIONAL ENTERPRISES FROM KOREA AND TAIWAN Beyond Export-led Growth Roger van Hoesel iv 12 COMPETITIVE INDUSTRIAL DEVELOPMENT IN THE AGE OF INFORMATION The role of cooperation in the technology sector Edited by Richard J.Braudo and Jeffrey G.MacIntosh 13 THE GLOBAL RESTRUCTURING OF THE STEEL INDUSTRY Innovations, Institutions and Industrial Change Anthony P.D’Costa 14 PRIVATISATION AND LIBERALISATION IN EUROPEAN TELECOMMUNICATIONS Comparing Britain, The Netherlands and France Willem Hulsink 15 THIRD WORLD MULTINATIONALS Paz Estrella Tolentino COMPETITIVE INDUSTRIAL DEVELOPMENT IN THE AGE OF INFORMATION The role of cooperation in the technology sector Edited by Richard J.Braudo and Jeffrey G.MacIntosh London and New York First published 1999 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Editorial material and selection © 1999 Richard J.Braudo and Jeffrey G.MacIntosh; individual chapters © the individual contributors All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Competitive industrial development in the age of information: the role of cooperation in the technology sector/edited by Richard J. Braudo and Jeffrey G.MacIntosh. p. cm. Based on a May 1995 workshop held at the Faculty of Law, University of Toronto, and sponsored by the Faculty of Law with the law firms of Borden & Elliot and Stikeman, Elliot; and the Canadian Bar Association-National Competition Law Section. Includes bibliographical references and index. 1. High technology industries—Government policy—Congresses. 2. Industrial policy—Congresses. 3. Competition—Government policy—Congresses. 4. Corporations—Taxation—Law and legislation- Congresses. 5. Industrial laws and legislation—Congresses. I.Braudo, Richard J., 1954- . II. MacIntosh, Jeffrey G. HC79.H53C656 1999 338.4'762-dc21 98–26660 CIP ISBN 0-203-97605-3 Master e-book ISBN ISBN 0-415-17854-1 (hbk) CONTENTS List of figures and tables ix List of contributors x Preface xi Introduction 1 PART I Competition as cooperation: policy perspective 10 1 High-technology industrial policy in Canada: the future 11 of an illusion or an illusion of the future ROBERT HOWSE 2 The role of cooperative industrial policy in Canada and 28 Ontario DAVID A.WOLFE 3 Commentary 60 MICHAEL J.TREBILCOCK PART II Tax policy and technology development 66 4 Tax incentives and comparative advantage 67 PAUL HALPERN AND JACK MINTZ 5 Evaluating R&D income tax incentives: some lessons 86 from the Australian experience GORDON J.LENJOSEK PART III Bank financing of technology development: lending to small 107 to mid-sized enterprises 6 The banks and innovative enterprise: opportunities and 108 constraints JEFFREY G.MACINTOSH 7 The role of banks in the financing of knowledge-based 146 SMEs PAUL A.TORIEL viii 8 Commentary 161 LARRY WYNANT PART IV Competition as cooperation: law and economics perspective 166 of cooperative industrial policy 9 Competition policy and cooperative innovation 167 DONALD G.MCFETRIDGE 10 Competition as cooperation: SEMATECH, Inc. and the 187 case for competitive industrial policy RICHARD J.BRAUDO 11 Commentary 229 DEREK IRELAND Index 233 LIST OF FIGURES AND TABLES FIGURES 5.1 A comparison of R&D tax incentives in the G-7 and Australia 102 9.1 Sequential process innovations 174 TABLES 4.1 Marginal effective tax rates 69 4.2 Average annual change in employment by sector, 1970–93 72 4.3 Average annual increase in GDP and change in share of total GDP 73 at factor cost by industry 4.4 Average annual change in exports by sector, 1977–93 74 4.5 Changes in Canada’s Revealed Comparative Advantage in goods by 75 sector, 1970–92 4.6 Summary of METR and various measures of sector importance 76 5.1 Federal SR&ED tax credit and refundability rates 100 5.2 Summary of provincial R&D tax incentives 101 7.1 Size and scope of the New Economy 147
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