Technological Policy And Its Competitiveness Enhancement Role Essay

This subdivision of the paper describes technological policy and its function to heighten EU fight. The infusion is composed of three parts showing historical background, economic accounts and future positions. Harmonizing to Center for Strategic and International Studies, the chief issue of Technology Policy is to understand how technological alteration might impact security and economic growing[ 1 ]. In order to discourse technological policy it is necessary to clear up what engineering means.

“ Technology is the practical application of cognition so that something wholly new can be done, or so that something can be done in a wholly new manner ” .[ 2 ]It is deserving adverting that engineering policy ( encompassing research and invention ) is profoundly connected to industrial policy mentioned above. “ Research is indispensable for the definition of industrial scheme, particularly in high-technology sectors, by offering a common mention footing for engineering prediction and development ”[ 3 ]– it reflects the relation between these two discussed policies.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Historical background

The technological policy has been undergoing some alterations within the old ages.

The Treaty of Rome from 1957 that became a cardinal papers for a future creative activity of the European Union did non stipulate engineering policy. At that minute the atomic dimension prevailed. It was European Atomic Energy Community ( Euratom ) that was perceived as a important one in footings of scientific discipline and engineering. Get downing from the 1960 ‘s a ‘technology spread ‘ is observed between the United States and Europe[ 4 ].

As a response to the challenge of foreign competition, the European Community implemented European Strategic Programme for Research in Information Technology ( ESPIRIT ) primary for five old ages ( 1984-1988 ) and subsequently for another five ( 1989-1993 ) . The status to obtain a fiscal support was to carry on research and development work from minimal two European states, universities or establishments[ 5 ].

In 1986, Research was lawfully named as a Community policy on the bases of the Single European Act. The Maastricht Treaty seting into force the creative activity of the European Union stressed the demand for consistence and coordination of the research and technological activities. A few old ages subsequently, in 1993, a White Paper entitled “ Growth, Competitiveness, Employment ” suggested concentrating on “ society based on cognition ” and “ intelligence society ”[ 6 ].

The twelvemonth 2000 was a discovery sing a scenario for fight of the EU. The survey shows that the USA overtakes the EU economically fundamentally on the land of information engineering. Therefore, The Lisbon Strategy was launched in 2000 in order to let the EU “ to go the most dynamic and competitory knowledge-based economic system in the universe by 2010 capable of sustainable economic growing with more and better occupations and greater societal coherence and regard for the environment ”[ 7 ].

How can we economically explain the relation between engineering and production?

Harmonizing to Mankiw and Taylor the production map nowadayss as below:

Y = AxF ( L, K, H, N ) ,

where Yttrium means the measure of end product, L – the measure of labor,

K – measure of physical capital, H – the measure of human capital, N – measure of natural resources. A is a variable and denotes engineering and F – production map. This equation describes the inputs of production in relation to its end products[ 8 ]. “ Many production maps have a belongings called changeless returns to scale ”[ 9 ]. In other words, the addition of all of the elements from the right side of the equation causes the addition of the entire end product. If the addition is described as 1/L, the concluding consequence would be:

Y/L = AxF ( 1, K/L, H/L, N/L ) .

Y/L is end product per worker what Mankiw and Taylor reference as “ a step of productiveness ”[ 10 ]. Physical capital per worker ( K/L ) , human capital per worker ( H/L ) and natural resources per worker ( N/L ) are the factors exciting productiveness. We could besides assume that the end product per worker ( thereby an efficiency of a worker ) is dependent on engineering ( A )[ 11 ]. Efficiency and productiveness are purely connected with fight.

Another economic account of the importance of engineering for economic system is a neoclassical theoretical account of economic growing pioneered by Robert Solow. Briefly speech production, it explains the growing procedure in advanced states underscoring the importance of technological alteration to excite the equilibrium ( the minute when investing is equal to the capital depreciation ) and to switch upward the aggregative production map[ 12 ]. In other words the production additions due to an progress in engineering what enhances efficiency.

Future positions

Presents, the European Union is still under the fiscal crisis. It implicates budget restraints, many occupations loss and lessening of criterion of life. The European states at these difficult times have to happen solutions in order to prolong Europe ‘s fight in the hereafter. Establishing on a papers called “ Europe 2020 Flagship Initiative. Innovation Union ” we could happen that: “ in times of financial restraints, the EU and Member States need to go on to put in instruction, R & A ; D, invention and ICTs ” to be capable of heightening competition[ 13 ].

Harmonizing to its analysis, the one-year EU outgos on R & A ; D are 0,8 % of GDP lower than in the USA and 1,5 % less than in Japan. The major technological spreads are seeable in concern R & A ; D and venture capital investings[ 14 ]. In order to turn out the statement that invention are needed for making fight the NEMESIS theoretical account by Paul Zagame ( integrating thoughts both from Luc Soete ‘s premises and the European Commission functionaries, etc. ) is traveling to be shortly presented. It is an econometric theoretical account constructed for 27 Member States, USA and Japan to foretell the possible mutualities of different sectors in economic system like development, fight, employment, RTD or environment.

The estimations coming from this theoretical account are the undermentioned: if 3 % of EU GDP was spent on R & A ; D by 2020, it could make up to 3,7 million occupations increasing besides GDP by around 800 billion euro by 2025. Harmonizing to Zagame , hypothetically a remotion of The Framework Program for Research and Development 8 taking to halt researches would do a bead of 0,7 % of GDP and 380.000 occupations in 2025 in the European Union[ 15 ]. Below, there is the table bespeaking all his simulations:

Table 1: FP suppression after 2013 effects, cumulative effects in 2025
2015
2020
2025
GDP ( % )
-0,10

-0,32

-0,63

Employment ( 1000s )
-262

-125

-382

Beginning: Paul Zagame , The costs of a non-innovative Europe: What can we larn and what can we anticipate from the simulation works, 2010, hypertext transfer protocol: //ec.europa.eu/research/social-sciences/pdf/demeter-costs-non-innovative-europe-zagame_en.pdf, p. 12.

The decisions emerging from this theoretical account show that there is a important demand for invention and research in footings of accomplishing an addition of GDP.

“ Europe 2020. A scheme for smart, sustainable and inclusive growing ” outlines a vision for the twenty-first century Europe. One of the cardinal marks for the EU is to put 3 % of GDP in R & A ; D. Together with that, the Commission highlighted seven flagship enterprises where we could happen “ Innovation Union ” . This precedence is about to bettering funding and coordination of a research and invention countries to hike economic growing and create occupations[ 16 ]. “ A greater capacity for research and development every bit good as invention across all sectors of the economic system, combined with increased resource efficiency will better fight and surrogate occupation creative activity. Investing in cleansing agent, low C engineerings will assist our environment, contribute to contending clime alteration and make new concern and employment chances ”[ 17 ].