Archibugi, Daniele, and Lundvall, Bengt-ake. (2001). The Globalizing Learning Economy. New York, NY: Oxford University Press, Inc.
xvii + 307 pp.
$95 (Cloth) ISBN 0-19-924109-0
Reviewed by Wayne White
University of North Carolina Charlotte
April 2, 2004
The Globalizing Learning Economy, edited by Daniele Archibugi, and Gengt-Ake Lundvall, is a volume of 15 articles, which originated in papers presented at the European Socio-Economic Research Conference held in Brussels on April 28, 1999. It is a collection of discussions about socio-economic research under the European Commission’s program TSER (Targeted Socio-Economic Research). The title of the book is intended to evoke two aspects of the contemporary life: the aspect that knowledge is the core of economic welfare and development is purported to be based on both the creation and destruction of knowledge; and the aspect that economic success is achieved in societies by rapidly learning specialized knowledge and quickly making the old ways obsolete. Lundvall and Borus (1998) refer to the present stage of rapid and fundamental changes in the socio-economic area as the learning economy. The volume supports the learning economy concept and seeks to explore its component parts.
The dominant argument of the book is that information and communication technologies have allowed for the globalization of knowledge bases to occur to push economic development. The authors argue that the learning economy thus established needs to have new institutional policy strategies. They argue that a fundamental process for transformation is technical change. The editors promote the further responsibility for innovation policy by advocating public intervention in creating public knowledge infrastructure, R&D incentives, and protection of knowledge assets. The authors acknowledged a U.S. presence in world information use and economic involvement and characterized the European position as one of catch-up.
The book is divided into five parts: Part 1 includes two chapters and seeks to define Europe in terms of the global competition for economic growth. The concept of "globalizing" is introduced as a period of major structural transformation at the world level and speaks to commerce as well as knowledge utilization. In Chapter 1, Luc Soete favorably compares the U.S. economy to countries in Europe and the rest of the globe. The work stipulates that the U.S. apparently benefited from faster application and implementation of new technologies. A major change in process, of the new learning economy, is that of co-operation in complex overlapping networks shaping the fabric of global markets (p.29). The author contends that higher education and public research have helped reduced barriers for knowledge transfer. The impact of high education and research combined with lower cost for communication and information has accelerated the rhythm of production and innovation. The changes in information, production, and innovation will bring about much political debate on the global level for the many interests involved.
Jan Fagerberg in Chapter 2 looks hard at the Euro economy compared to the U.S. and Asia. He predicts that European policy makers will find difficulty in predicting and influencing performance trends and productivity. Fagerberg argues that solutions to Europe’s problems may be found with a careful analysis of the trends in productivity. The author gives a brief history of production by charting the GDP for the industrial nations from 1820 to present. This comparison does not bode well for the European countries. The policy makers in the European countries are challenged to change the trend by “transforming the education and training systems in order to equip individuals with the skills needed for an environment in which the major new technology is pervasive” (p. 53).
Part 2 includes three chapters and presents the authors’ contentions regarding trends in firm organization, competition, and co-operation. In Chapter 3 Cohendet and Joly explore the trends in the production of technological knowledge. The authors report that evidence indicates that technological knowledge is changing in the following ways: increasing costs are tightening the relationship between research and industry, research is increasingly becoming internationalized, and codifying knowledge has aided the efficiency of research activities (p.63). The traditional concept of science and knowledge as a public good has given way to a new concept of knowledge as a tradable commodity. The traditional aspects of research and development (R&D) are also changing as a result. More ways of codifying knowledge has contributed to the increase speed of circulation and the rate of new knowledge development. Accordingly the authors assert that, “the more that is invented, the easier it becomes to invent still more” (p.70). The authors argue for more involvement of public universities in R&D and the production of information to promote the public good and evenly disperse technologies.
In Chapter 4, Pedro Conceigao and Manuel Heitor reinforce the argument for universities to become strategically involved in seeking the leading edge of innovation for the pubic good. Conceigao and Heitor fear the threat to the universities’ traditional role and integrity is serious and is evident in the path to privatizing ideas and skills developed at the institutions. This danger is purported to be driven by the need for funding and threatens to change the way many institutions are currently perceived. While the authors contend that the universities need to promote organizational diversity to ensure the continuation of institutional integrity, they report a trend toward the breakdown of boundaries between companies and universities for mutual economics. Conceigao and Heitor suggest that policy makers may wish to move the European system of higher education into a model more closely aligned with the U.S. model. They further suggest a model for research and development that could guide public policy regarding information development.
In Chapter 5 Mark Tomlinson offers a view of business and industry in the learning economy. Particularly, this author attempts to explore the impact of services on economic performance. Tomlinson contends that the impact on economic performance has implications and consequences for business and industrial policy particularly in the service area. He asserts that policy needs to confront the issues involved with both the service based industry and the growth of knowledge-based services.
Part 3 has two chapters and includes the authors’ views and research findings regarding globalizing the innovation process. In Chapter 6, Daniele Archibugi and Simona Iammarino explore three aspects of globalizing innovation: the international exploitation of technology; the global generation of innovations; and the technical collaborations (p. 111). The authors warn that regional disparities may result as a consequence of the selection process of multinational enterprise working to generate innovation and control the bounty from same. They argue that exploitation and, the generation of technological innovation and collaboration for innovation each demand separate policy considerations.
In Chapter 7 Lynn Mytelka continues the assertion of Archibugi and Iammarino by representing a history of the agreements of multinational co-operation. The author reports that during the 1980s these inter-firm agreements were promoted by the governments of Japan, Europe, and the United States. The relationships reported in this chapter were two way relationships between firms which did more than transfer technology in one direction. These long term agreements fostered new products, or processes, or routines in creating a contractual portfolio of possibilities. The pressure created by the inter-firm multinational agreements for R&D tends to move toward deregulation of markets and liberalization of trade and investment agreements. Another perspective brought forth because of R&D by multi-national inter-firm co-operation is that of widening the access for the firms to both new knowledge and shared costs. The author fears, that while the strategic partnering by firms to create immense opportunities to expand learning and knowledge networking, it has formed substantial barriers to newcomers in the field. Therefore, the author supports policies which would promote public R&D.
Part 4 includes four chapters and takes a look at the challenges facing Europe, particularly the challenges of inequality, sustainability, and organizational innovation. The authors offer up some of the social concerns fostered by the learning economy and the changes brought about by a shift to knowledge and technology. In Chapter 8, Chris Freeman reports the widening of the gap between the rich and poor countries. Freeman shares a look at economic history and relates that the large gaps that exist between rich and poor countries open in the eighteenth century (p. 147). Freeman further asserts that the gap that now exists could possibly be abated in the catch-up countries by active education, industrial and technology policies and that reduction of economic inequality occurs once a new technology becomes the dominant technology.
In Chapter 9 Gerd Schienstock includes a review of social exclusion in the new learning economy. Schienstock draws parallels between social exclusion considering employment as a core social tie and link with individuals to society.
The author asserts that the learning economy will have major consequences on working people. The worker faces an increasingly unstable environment (p.165). The unskilled or limited workers are at risk of unemployment. The market will drive regional exclusion in terms of the value of labor and the skills of the working force. Schienstock describes five stages of policy involvement for governments considering the work/exclusion concept. He argues that people with stable long-term employment should receive continuous further training. People with fragile employment should have intervention options which include: protection agreement, training to acquire skills and qualifications, and home training to accommodate schedules. The author further states that unemployed individuals could receive wage subsidies and adjustment training to acquire needed skills and training. The long-term unemployed need to receive interventions which include: job guarantees, employment outside the labor market, further training, and wage subsidies. The final stage would aid people who have a permanent exclusion with social aid and training. Through all of the stages Schienstock argues that the main aim of government policies and intervention to remove exclusion should be to empower people to participate in the learning processes taking place in industry (p.174).
In Chapter 10 Frieder Meyer-Krahmer takes a look at sustainability. The author uses UNWCED’s (1987) definition of sustainability to mean “a development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. This definition is expansive and extends to eliminating poverty, conserve the environment and enhance the resource base while maintaining economic development (p. 177). Meyer-Krahmer is somewhat skeptical of the sustainable efforts to date and suggests that current policy is focused on R&D for both hardware and software. The author suggests that much more policy development must be forthcoming to move our current economy to a sustainable position. Meyer-Krahmer asserts that public policy and political need are the root of the solution to sustainability.
In Chapter 11 Benjamin Coriat reviews a brief survey of organizational innovation in European firms. The surveys attempted to view the companies which displayed organizational traits considered innovative involving best practices. The author describes innovative firms in Europe as: representing a significant percentage of all firms; are generally the larger firms; mostly in manufacturing; look at the long view of survival. Coriat further expresses the belief that innovation is embraced or limited to and by series of threats and opportunities.
Part 5 includes four chapters and its authors take a more in depth look at policy and policy change reflecting the globalizing trends. Chapter 12 starts the argument on innovation policy as a systemic approach to societal economic issues. Charles Edquist defines innovation as “new creations of economic significance of either a material or an intangible kind”. He asserts that the market mechanism and capitalist firms best fulfill the functions of current society and defines innovation policy as “public action that influences technical change and other kinds of innovations” (p. 219). Edquist asserts that a system approach to economic problem solving should be utilized in assisting innovative development. This approach should consider all the relations which exist between the factors influencing innovation. Comparative analysis of all factors in the system should be carried out before any policy is considered in the economic environment.
In Chapter 13, Margaret Sharp considers the needs and views of the European policy on innovation. Specifically, Sharp identifies three key features of the globalizing learning economy. The key features identified were: intensification of competition; ability to adapt and innovate; and the uneven distribution of costs and benefits (p. 240). The author asserts that there are five policy messages for the European community. The policy messages were: education and training are essential; networking is a key in the learning process; protection does not help; the larger or macroeconomic environment is one of the pressures; and cohesion and structural policies remain important. The author reviews current European Commission policies regarding innovation. She argues that the current commission policy hardly touches on Europe’s main problem of regarding the involvement and use of new technologies in their infrastructure, and that moves in this direction would be beneficial to the larger community.
In Chapter 14, Jens Nyholm, Lars Normann, Claus Frelle-Petersen, Mard Riis, and Peter Torstensen question whether the theories regarding economies give a realistic picture of and guide policy decisions considering knowledge development, innovation, and business dynamics. The authors criticize the mainstream economic theory as being wrongly focused and misguided regarding impact on the knowledge-based economy. The authors further argue that presently the most important source of information for policy makers is not theory but rather practical experience and empirical observations. Innovation theory needs to catch up and move by addressing research in four areas: better indicators for the knowledge economy, learning, policy effects, and the new co-operative patterns between academic researchers and policy makers.
In Chapter 15, Bengt-Ake Lundvall sums up the volume’s look at the European take on the learning economy. Lundvall asserts that the technology trend in the last decade has been the acceleration of the rate of change. He further asserts that Europe is in a difficult catch-up position in the current innovative environment. He champions policy development in Europe which should: support world trade regulations which avoid obstacles to need-oriented innovation policies; position European firms in global production networks and competition through a position of openness; stimulate learning in human resource development, organizational change, networking, and knowledge development; and focus on the creation of social and environmental sustainability.
References
Lundvall, B. and Borras, S. 1997. The Globalising Learning Economy: Implications for Innovation Policy. Brussels: European Commission.
UNWCED. 1987. Our common Future. The Brundtland Report. Oxford: Oxford University Press.
About the Reviewer
Wayne K. White, Assistant Professor, Department of Educational Leadership, College of Education, University of North Carolina-Charlotte. Dr. White's interest is in educational finance, school leadership, and technological influences on education.
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