To summarise the preliminary arguments: it appears that the intelligent and successful production of low-tech products presupposes both a specific practical knowledge available to companies, and the indirect use of complex knowledge inputs which are often scientific in character. This view accords with the recent revival of the debate in the social sciences, dealing with the growing importance of knowledge-intensive work and the need for organisations to learn and to develop know-how. These phenomena are generally regarded as characteristics of an emerging knowledge-oriented society. As emphasised at the beginning of this paper, these ideas reflect important tendencies of social development.
However the activities of several LMT companies without any doubt fit into this perspective – not only do such enterprises make intensive use of the knowledge available to them; they also develop it, restructure their organisations accordingly, innovate and grow.
This means that knowledge and knowledge-based innovation strategies cannot be regarded as features of expanding and new sectors, such as professional services, ICT/software or biotech. Without a doubt, these sectors must be regarded as markedly knowledge-based, since they are immediately dependent on the use of explicit knowledge. But as the findings presented here suggest, phenomena relevant to the debate may also be found when one studies other types of knowledge in industrial core industries – industries that from the point
33 of view of an emerging knowledge-based society may seem outdated and far from future-oriented. Such sectors are not marked by gradual erosion – instead they are repositioning themselves in the context of socio-economic change. In spite of globalisation and growing competition, prospects are good in markets for mature products. Partly this is because the specific practical knowledge low-tech companies are provided cannot easily be used by potential competitors. For this knowledge, as mentioned above, can be deeply embedded in the social system of a company and its local environment, which makes it hardly transferable and accessible to competitors (cf. Maskell, 1998). This applies – paradoxically – to standardised products which can considered to be easy to imitate. But such products are often design-intensive, and have major potential for technological upgrading via the use of complex (often scientific) knowledge inputs.
These arguments lead to a specific understanding of the restructuring of the economic landscape of Europe at the beginning of the 21st century. This change does not appear as a wholesale structural replacement of “old” sectors with “new” ones, or as substitution of
“old” technologies with “new” ones. It evolves as a restructuring of sectoral and technological systems, transformed more from within than from without. This change process is not dominated by industrial activities where competitive advantage, capability formation and economic change are constituted by frontline technological knowledge.
Rather, it is dominated by what are often wrongly termed low- and medium-tech industries.
There are many who argue that, since high-tech industries and “knowledge-intensive”
industries are one and the same, the economic health of Europe depends simply on the capacity to create and nurture so-called “high-technology” industries. These industries, particularly the information technology and telecommunications (ICT) cluster, are regarded as the bearers of growth, employment and trade success in the future. The policy conclusion tends to be that innovation policy, technology policy and, indeed, economic policy more generally ought to be focussed primarily on the creation of ICT industries.
From the perspective of this paper this type of analysis, and the analytical and policy conclusions that result, are deeply flawed. The concepts and categories used to describe allegedly high-tech, knowledge-intensive industries are seriously oversimplified, lacking empirical support, and conceptually naïve. Rather, we claim that:
• The innovation systems of Europe and indeed of most industrialised countries are strongly influenced by low-tech industries.
• The products of these industries are often growing rapidly and in surprising ways, as a consequence of quality improvements and technological upgrading
• The knowledge bases of these industries are deep, complex and systemic. They are intensive creators and users of practical knowledge and high-grade design skills. They use engineering and scientific knowledge and are closely integrated with the science and technology infrastructure. The mere fact that they do not do much internal R&D says nothing at all about knowledge intensity or their contribution to the knowledge economy.
• They are very often embedded in specific regional structures and are part of regional company networks that differ from country to country and are part of specific national and regional innovation systems.
Furthermore, the involvement of low-tech products and companies is frequently a core precondition both for the innovativeness of value chains – or production systems – and for the design, fabrication and use of a range of high-tech products. Collaboration and networking between companies of different industries at regional, national, as well as transnational levels, are increasingly becoming important determinants of the innovativeness and competitiveness of individual companies. These value chains, filières or clusters include low-tech companies not just as tiered participants in supply chains or as more-or-less passive receptors of technologically advanced machinery and equipment developed independently of user specifications. On the contrary, the dynamics and efficiency of value chains may be crucially dependent on the reliability and effectiveness, the capabilities and specific knowledge of their low-tech partners and on their integration into innovation processes in other firms in the cluster, whether low-tech or high-tech. It has to be emphasised that the focus on low-tech firms as parts of wider value chains implies an immediate inclusion of service functions, whether supplied by independently organised service firms, as secondary industrial activities of other firms or through intra-firm production of ancillary services.
This focus on the contribution of low-tech industries for the innovativeness for industry in general is extremely important in a policy perspective, both national and regional innovation policies and for developing a proper foundation for the overall growth and performance possibilities of the European economy. The development of the low-tech sectors is of great importance for both ‘old’ industrialised and more recent ‘high-tech’ economic countries and regions. Following the arguments above, the high-tech prospects for many economies are
35 based on the presence and dynamic interaction of reliable „low-tech“ functions and processes. This holds particularly true for value chains which have an increasingly global character and can be regarded as one of the driving forces of the economic development.
This aspect is of outstanding importance for the future development of the Central European countries, since many low-tech processes are located there and they are more and more integrated into the internationalised value chains. But we are confident in asserting that the development of Europe as a whole will in future years be based largely on the competitive and innovative capabilities of the LMT industries discussed here.
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