Technological Dynamics and Social Capability: US States and European Nations

This paper analyzes factors shaping technological capabilities in United States and European countries, and shows that the differences between the two continents in this respect are much smaller than commonly assumed. The analysis demonstrates a tendency towards convergence in technological capabilities for the sample as a whole between 1998 and 2008. The results indicate that social capabilities, such as well-developed public knowledge infrastructure, an egalitarian distribution of income, a participatory democracy and prevalence of public safety condition the growth of technological capabilities. Possible effects of other factors, such as agglomeration, urbanization, industrial specialization, migration and knowledge spillovers are also considered. The paper is a revised, updated and shortened version of working paper 20111114 in this series.