Chapter 37 Technological change and technology strategy

This chapter addresses questions that are primarily microeconomic in nature. Investment is required to accomplish a particular technological change, which depends critically on two things: (1) the degree of external participation in its accomplishment, and (2) the internal technological capability acquired through previous investments in technology. Technology policy is made by public bodies at the international, national, and regional levels. Private enterprises and individuals also make policy, largely by responding to incentive systems established by public policy makers. The chapter discusses policy options for international and multilateral agencies, as well as for national governments. A methodology for addressing issues concerning externalities and spillover should be widely applied. Studies of foreign suppliers and domestic purchasers of technology add to the understanding of motivation and behavior. Distributional problems usually deal with policy instruments that do not affect the overall pace of technological development.