Geographical Concentration and the Dynamics of Countries' Specialization in Technologies

This paper examines the empirical dynamics of countries' technological specialization in six technology fields using distribution dynamics, a methodology involving non-parametric estimation of probability distributions and Markov stochastic kernels for each field. Innovation in all the fields is highly localized and the degree of concentration is fairly stable in time. The cross-country distributions of a specialization index in all fields, but electronics, reveal no marked specialization profile for a good number of countries. The estimated stochastic kernels show persistence of within field countries' specialization levels around or below the mean, while high specialization levels revert towards lower values (with the exception, again, of electronics). This strengthens the case for absorptive capacity. Electronics show some distinctive properties: they have the highest degree of geographical concentration and numerous small countries among those specialized; they also are the least mobile technology field. In a Schumpeterian perspective, this is in line with "creative accumulation".