The Economics of Knowledge

289 Pages·0.908 MB·English

by  Dominique Foray

Economics of Knowledge

Economics of Knowledge
Dominique Foray
The MIT Press
Cambridge, Massachusetts
London, England
L’économie de la connaissance
© Editions La DECOUVERTE, Paris, 2000
© 2004 Massachusetts Institute of Technology
All rights reserved. No part of this book may be reproduced in any form by any elec-
tronic or mechanical means (including photocopying, recording, or information storage
and retrieval) without permission in writing from the publisher.
This book was set in Palatino by SNPBest-set Typesetter Ltd., Hong, Kong and
was printed and bound in the United States of America.
Library of Congress Cataloging-in-Publication Data
Foray, Dominique.
[Economie de la connaissance. English]
Economics of knowledge / Dominique Foray.
p. cm.
Rev. and enlarged translation of: L’économie de la connaissance.
Includes bibliographical references and index.
ISBN 0-262-06239-9
1. Knowledge management—Economic aspects. 2. Information technology—
Economic aspects. 3. Technological innovations—Economic aspects. I. Title.
HD30.2.F66 2004
338¢.064—dc22
10 9 8 7 6 5 4 3 2 1
Contents
Acknowledgments vii
Introduction ix
1 An Original Discipline 1
2 Macro- and Microeconomic References: Continuity and
Breaks 21
3 Production of Knowledge 49
4 Reproduction of Knowledge 71
5 Knowledge Spillovers 91
6 Knowledge as a Public Good 113
7 Intellectual Property Rights in the Knowledge Economy 131
8 Knowledge Openness and Economic Incentives 165
9 On the Uneven Development of Knowledge across
Sectors 189
10 ANew Organizational Capability: Knowledge
Management 207
11 The Public Dimension of the Knowledge Economy 225
Conclusion 247
vi Contents
Postscript 251
Notes 253
References 255
Index 271
Acknowledgments
I acknowledge with gratitude the support that I received for my
research during 1999/2000, when I held a fellowship at the Interna-
tional Center for Economic Research (ICER, Turin), as well as the con-
tinuous support that I received from the Institut pour le Management de
la Recherche et de l’Innovation (IMRI) at the University Paris Dauphine.
I am particularly grateful to Valérie Fleurette and Stephanie Pitoun.
In the course of the preparation of this book, I enjoyed many stimu-
lating discussions with a number of friends and colleagues. I am par-
ticularly grateful to my colleagues Maurice Cassier, Robin Cowan, Paul
David, Jacques Mairesse, Ed Steinmueller, and Eric von Hippel for
great discussions, detailed suggestions, and challenging exchanges.
Many other friends and colleagues have been involved at various
stages of the preparation of this book. They all have contributed to
make the writing of this book an enjoyable and memorable enterprise.
Warm thanks to Norbert Alter, Cristiano Antonelli, Rémi Barré, Eric
Brousseau, Michel Callon, Uwe Cantner, Ann Carter, Iain Cockburn,
Patrick Cohendet, Jean-Michel Dalle, Albert David, Louise Earl, David
Encaoua, Emmanuelle Fauchart, Maryann Feldman, Chris Freeman,
Pierre Garrouste, Fred Gault, Arnulf Gruebler, Dominique Guellec,
Bronwyn Hall, David Hargreaves, Armand Hatchuel, Liliane Hilaire
Perez, Ali Kazancigil, Max Keilbach, John King, Alice Lam, Patrick
Llerena, Bengt Ake Lundvall, Franco Malerba, Frieder Meyer Krahmer,
David Mowery, Richard Nelson, Francis-Luc Perret, Luc Soete, Kevin
Styroh, Peter Swann, Morris Teubal, Manuel Trajtenberg, Xavier Vence,
Jean Benoît Zimmerman, and Ehud Zuscovitch.
At a late stage in the preparation of this manuscript, Brian Kahin was
very helpful for many reasons. I thank him warmly. I am also grateful
to the four anonymous reviewers who made very sharp comments that
helped me to adjust some parts of the book at the last minute. Thanks
viii Acknowledgments
to Liz Carey-Libbrecht for translation and editorial assistance. Our
excellent collaboration without a single face-to-face meeting (even at
the start) shows that some of the issues raised in the book are not pure
fiction!
This book is an extended and largely revised version of a book pub-
lished in French: L’économie de la connaissance (Paris: La Découverte,
2000).
Introduction
Just as industrial economics as a discipline was founded with the
advent of industrialization in around 1820, so the economics of knowl-
edge developed as knowledge-based economies gradually came into
being. By knowledge-based economies I mean, essentially, economies
in which the proportion of knowledge-intensive jobs is high, the eco-
nomic weight of information sectors is a determining factor, and the
share of intangible capital is greater than that of tangible capital in the
overall stock of real capital. These developments are reflected in an
ever-increasing proliferation of jobs in the production, processing, and
transfer of knowledge and information. This evolution is not just
confined to the high-technology and information and communication
service sectors; it has gradually spread across the entire economy since
first coming to light as early as the 1970s. Society as a whole, then, is
shifting to knowledge-intensive activities.
Some, who had thought that the concepts of a new economy and a
knowledge-based economy related to more or less the same phenome-
non, logically concluded that the bursting of the speculative high-tech
bubble sealed the fate of a short-lived knowledge-based economy.
My conception is different. I think that the term “knowledge-based
economy” is still valid insofar as it characterizes a possible scenario of
structural transformations of our economies. This is, moreover, the con-
ception of major international organizations such as the World Bank and
the Organisation for Economic Cooperation and Development (OECD).
The Knowledge-Based Economy as a Plausible Scenario of
Structural Transformation
In the scenario under consideration, the rapid creation of new knowl-
edge and the improvement of access to the knowledge bases thus