DIME-DRUID ACADEMY Winter Conference 2011

An inquiry into the determinants of French technological specializations

Mafini DOSSO
Economic Center of La Sorbonne, University Paris 1

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An inquiry into the determinants of French technological specializations, Mafini DOSSO, University Paris I Pantheon-Sorbonne, CES (Centre d’Economie de la Sorbonne), 2005-2011, mafini.dosso@univ-paris1.fr
Our study aims at a better understanding of the role of institutional factors in technological change. The literature devoted to the study of national technological specializations (Cantwell 1989, Nesta and Patel 2004, Patel and Pavitt 1998, Laursen 2000) has showed that once established, technological specialization tend to persist over time, although with a diminishing intensity in the long run. This, according to the authors, mainly rests on the path dependence nature of technological accumulation. However, as pointed by Patel and Pavitt (1998) and more recently by Nesta and Patel (2004) further research is needed to explain the determinants of the stability in countries’ technological patterns. Besides, works on NIS (Lundvall 1992, Nelson 1993) have focused on the institutional and historical factors affecting countries’ innovative performances.
Combining these two streams of literature we focus on the set of institutional features that could explain the persistence of the specialization of French organizations over the last 30 years.

We use the SPRU longitudinal patent database to investigate the evolution of the technological specialization of France between 1978 and 2004. The database provides the total number of patents granted by the United States Patents and Trademark Office (USPTO) by country for each technological class, in every year. The relative specialization of French firms is measured by computing the revealed technological advantage index for each technological class. It is defined as the share of this class in all French patents over the share of this class in all OECD countries patents for a period. Therefore, a country is considered as relatively specialized in a technological class if its index is above one: the country's share of patents in this class is higher than the average share in the sample. We achieve such analysis over 3 sub-periods of 6 years in order to control for the intrinsic volatility of the annual patent data and to consider long run and short run changes.
As predicted by the theory, we find that the French technological specializations appear to be relatively stable, although showing a decreasing stability in the long run (as revealed by a lower correlation coefficient). Indeed, the statistical analysis shows that during the period, French organizations have remained relatively specialized among others in inorganic chemicals, bleaching dyeing and disinfecting, induced nuclear reactions (systems and elements), and aircraft and telecommunications activities. A long term common feature of these classes resides in the prevailing role of large firms and governmental organizations in these types of innovation activities (as shown by Patel and Pavitt 1990).
Our main contribution is to explain these persisting technological patterns relying on a set of three related institutional and historical factors. First, we point out the influence of the long term commitment of the French Government in innovation activities through its own agencies (CEA, ONERA), state-owned firms, direct subsidies and public procurement on the creation of “National Champions”. Second, the prevailing role of large firms, and their related strategies, in innovative as well as economic activities also have affected French technological specialization. Finally, the technical experts and engineers from a French particular institution, “les Grandes Ecoles”, played a crucial role in the design and management of the industrial and innovative strategies of these large firms. We argue that these specific features have affected the French innovation system, and more precisely favored the development of a specific type of innovation, more oriented towards complex systems.
It is interesting to notice that the technological specialization has been stable over the last 30 years despite deep structural transformations in the French Innovation and industrial system. Indeed, major changes in French industrial policy include the withdrawal of the French Government in some of these large firms, notably through the privatization of state-monopolies, facing increasing international competition. On the one hand these changes have led large firms to adapt their strategies and go through a long restructuring process that includes national and international mergers and acquisitions (Cantwell and Kotecha, 1997). On the other hand, since the 90s the French industrial policy has shifted its focus from large firms to SMEs, and has issued several measures to encourage innovation activities of SMEs and to foster the links between the academic and industrial research. However, large firms still dominate the technological classes in which France is most specialized.
Cantwell J. (1989), “Technological innovation and multinational corporations”, Basil Blackwell, Oxford.
Cantwell J. and U. kotecha (1997), “The internationalization of technological activity: the french evidence in a comparative setting” in Technology, Innovation and Competitiveness by J. Howells and J. Michie, Edward Elgar, United Kingdom.
Lundvall B.-A. (1992), “National Innovation Systems: Towards a theory of innovation and interactive learning”, London, Pinter Publishers.
Nelson R. (eds) (1993), “National Innovation systems: a comparative analysis”, Oxford University Press, New York
Nesta L. and Patel, P. (2004), “National Patterns of Technology Accumulation: Use of Patent Statistics”, in Kluwer Handbook of Quantitative S&T Research, Schmock, U. (Ed), Book Chapter.
Patel P. and K. Pavitt (1990), “L’accumulation technologique en France: ce que les statistiques de brevets tendent à montrer”, Journal Revue d’Economie Industrielle, Volume 51, 1er trimestre. Organisation et dynamique industrielle pp 10-32.
Patel P. and K. Pavitt, (1998), “Uneven (and divergent) technological accumulation among advanced countries: evidence and a framework of explanation”, pp55-82 in Trade, Growth and Technical Change eds by Archibugi D. and J. Michie., Cambridge University Press, United Kingdom.