World Development, Vol. 24, No. 3. pp.

449460, 1996
Pergamon Copyright 0 1996 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0305-750x/96 $15.00 + 0.00
0305-750x(95)00156-5

R&D and Technology Policy in NICs as

Learning Processes

MORRIS TEUBAL”
The Hebrew University of Jerusalem, Israel

Summary. - This paper presents a dynamic, learning perspective to research and development activity
and to policies promoting these activities and technological development more generally.
The basic idea is that successful penetration of research and development (R&D) in a newly industr-
alized country (NIC) context is a process involving extensive learning including collective learning
(“learning by others”); multidisciplinary learning (both technoeconomic and managerial/organizational);
and learning which is cumulative through time. This is especially so at an early (“infant”) phase of diffu-
sion of this process through the economy.
A dynamic view of externalities and market failures is presented, one that provides the basis for a
catalytic perspective of technological policy. This perspective is based on the distinction between an
infant and a mature phase of policy, where massive-flexible-search oriented support in the early phase
sets the base for endogenization/routinization of R&D in the economy and for the possibility of drastic
reductions in government support for traditional forms of R&D in the later phase. Copyright 0 1996
Elsevier Science Ltd

I. INTRODUCTION ing which is cumulative through time.2 This is espe-

This paper presents a dynamic, learning perspec-
tive to research and development (R&D) activity and
to policies promoting these activities and technologi-
cal development more generally. The emerging cat-
alytic policy perspective may be a useful one for
newly industrialized countries NIC’s reaching the
stage where active promotion of R&D becomes a cen-
tral issue in the national policy agenda, as it was with
Israel in the early 1970s (Teubal, 1984); Taiwan and
Korea in the early 1980s (or late 1970s - see Kim,
1993 for Korea; Hou and Gee, 1993 for Taiwan) and
Chile, Mexico and Argentina in the early 1990s
(Teubal, 1992, 1993). A salient feature of these poli-
cies and of the underlying technological and industrial
policy framework more generally, is recognition of
the importance of neutral technological promotion
schemes, a feature which is only recently becoming
widely recognized.’ Moreover this framework is per-
fectly consistent with macroeconomic policies and
other policies designed to reduce the scope of govem-
ment intervention in economies where such interven-
tion was massive and across the board in the past.
The basic idea is that successful penetration of
R&D in a NIC context is a process involving exten-
sive learning including collective learning (“learning
by others”); multidisciplinary learning (both techno-
economic and managerial/organizational); and leam-
cially so at an early (“infant”) phase of diffusion of
this process through the economy. It follows almost
inevitably that widespread, even pervasive, extemali-
ties as well as other market failures are also present.
Thus once R&D becomes a critical issue for NICs,
e.g., immediately after liberalization of foreign trade
as in the case of the Latin American countries men-
tioned above or after exhaustion of the benefits
derived from overwhelming reliance on imported
technology and backward engineering as in the case of
the countries of Southeast Asia, there are strong rea-
sons for the government to actively promote this
activity.
The market failures and other institutional con-
straints underpinning government support to techno-
logical development, are not however, static. Some of
the learning processes become exhausted while new
mechanisms or institutions endogenously arise which
enhance the private appropriation of the social bene-
fits from innovation. Examples of exhaustion are
“learning to identify, select, and manage innovation
*This paper has benetitted from discussions with C. Abeledo,
R. Galli, M. Justman, J. Katz, D. Kaufmann, R. Mayorga,
H. Pack, S. Radosevic, E. Steinmueller, K. Smith, B. Toren,
P. Wegloop, and E. Zuscovitch. Currently Morris Teubal is
affiliated to the Industrial Development Policy Group. The
Jerusalem Institute. Final revision accepted: August 2, 1995.

449
4.50 WORLD DEVELOPMENT
projects” particularly as regards to an emerging class
of “routine” process and product improvements.3
Thus while the technological knowledge generated by
R&D may continue to be relevant to firms beyond
those executing these activities, the organizational
and management knowledge will become increas-
ingly diffused.4 Examples of mechanisms for better
appropriation of benefits include the reinforcement of
patent laws (e.g., in Mexico, lately) and the protection
of utility models (Japan and other Southeast Asian
countries). The joint outcome of these processes is a
reduction in the scope of market failure and other
institutional constraints to research and development,
at least for the emerging “species” of routine projects.5
The dynamic view of externalities and market fail-
ures mentioned above provides the basis for a cat-
alytic perspective of technological policy. This per-
spective is based on the distinction between an infant
and a mature phase of policy, where massive-flexible-
search oriented support in the early phase sets the base
for endogenization/routinization of R&D in the econ-
omy and for the possibility of drastic reductions in
government support for traditional forms of R&D in
the later phase. Thus subsidization today is not eternal
which is important for the essential market-forces ori-
entation of economic policy in general; and moreover
it sets the base for the restructuring of government
support in the direction of more sophisticated techno-
logical effort, e.g., in favor of consortia of firms per-
forming precompetitive, generic R&D.6
2. SALIENT FEATURES OF THE NEW
PERSPECTIVE
The above description of the R&D process and the
accompanying discussion of market failures stand in
contrast to the usual way of theorizing about R&D and
of thinking about policy. Economists have not yet
developed a conceptual framework for technological
policy - one mediating between the general, Arrow-
type justifications for government intervention in
invention/R&D and the actual implementation of poli-
cies.’
The formal model-building approaches developed
after Arrow (see, for example, Stoneman, 1982) are
clearly miles away from concrete policy formulation
and implementation. A good example of the underde-
velopment of thinking about technological policy is
the World Bank report explaining the successful expe-
riences of eight Asian economies starting (Japan, the
Gang of Four and Malaysia, Thailand and Indonesia
- see World Bank, 1993). In this report not only tech-
nological policy but industrial-technological policy as
a whole is identified with selective support, particu-
larly of infant industries but also the financial sector
(World Bank, 1993, pp. 87-90). There is almost no
discussion of the neutral policies forming the back-
bone of technology-support promotion systems.
The basic problem is lack of a policy framework
linking theory and actual policy making. The policy
framework is appreciative theory in Nelson and
Winter’s sense, but theory nonetheless (Nelson and
Winter, 1982; Nelson, 1994). The catalytic frame-
work is one possible element of an overall policy
framework for R&D or even industrial-technological
policy more generally.8
One important piece of research about R&D policy
in contexts somewhat different from those we have in
mind are the studies on the US economy conducted by
Nelson and associates (see Nelson, 1982, 1983). In
these studies Nelson presents the elements of a policy
framework for supporting R&D effectively in differ-
ent sectorial contexts. He asks the very important
question of whether market failure analysis is by itself
capable of explaining the distribution of R&D support
across sectors. The answer is clearly no. Moreover,
one obstacle to the implementation of policies is
knowledge about which projects should be supported
(the information may not be available from firms).
Other reasons for the weak explanatory power of mar-
ket failure analysis have also been presented. The sig-
nificance of his work for our context is, first, that tech-
nological policy is very difficult to formulate and even
more to implement; and second, that this requires a
conceptual framework which goes beyond the usual
Arrovian context of market-failure analysis.
The above framework of Nelson’s is insufficient to
analyze our problem for a number of reasons: (a)
implicitly at least, market failures are assumed to be
static rather than dynamic; (b) external economies
seem to include first and foremost technological
knowledge rather than the management and organiza-
tional knowledge mentioned above; (c) explicitly
probably but certainly implicitly the policy frame-
work is one of selectivity-it should identify projects
with clear market failures as a condition for support
since not all projects are associated with such failures
(market failures would not seem to be pervasive in the
context discussed by Nelson). As we will see the two
last problems are related and both are linked to an
aspect of the pervasiveness of market failures (for per-
vasiveness of market failures, see Nelson, 1988). My
presumption is that once we recognize the widespread
importance of organizational/management learning in
connection with the emerging R&D activities of NICs
(a nonproblem in the United States which Nelson ana-
lyzed given that R&D has been performed systemati-
cally at least after WWII if not since the beginning of
the century) then the associated widespread extemali-
ties would justify a neutral rather than selective sup-
port for this activity.9
The perspective developed in this paper presumes
that the R&D process involves aspects of dynamic
scale economies or dynamic increasing returns (DIR)
such as those appearing in the literature of path depen-
 R&D AND TECHNOLOGY
dency including that analyzing the selection of a par-
ticular variant of a new technology over other compet-
ing variants (for a survey of this literature see Nelson,
1994; see also Arthur, 1988; David, 1992). The condi-
tions for success in the routinization or diffusion of
R&D within the economy could, therefore, be ana-
lyzed in terms of the conditions for existence and
exploitation of DIR. Nelson (1984) has identified
three such conditions appearing in the relevant litera-
ture -cumulative technologies, (user) network exter-
nalities and parallel development/production of com-
plementary components or parts of the system.
The counterpart of the DIR conditions-cumulative
technology and network externalities in the use of a
new technology - is success in the collective-learn-
ing process taking place in economies who enter the
R&D (or the innovation) phase. The meaning of “col-
lective learning” is not only the fact that R&D of firm
i at t benefits firm j at t but also that the experience of
the past is relevant for the future, i.e. that there are no
breaks or discrete configuration changes as far as the
organization and management of R&D is concerned.
The possibility of building a network of “users of
R&D and users of R&D promotion incentives” very
much depends on the capacity for the government
agency in charge of the promotion to become a “net-
work entrepreneur” (Teubal, Yinnon and Zusovitch,
1991).‘”
The counterpart to the third element - comple-
mentary activities related to the overall system within
which a new technology should operate - is market-
building and institutional change (see Teubal, 1994a,
1994b). Both may also require active government sup-
port. Market-building would refer to the services -
technoeconomic, financial and management - asso-
ciated with the R&D process or with innovation. A
number of policies could be directed to generating and
perfecting these markets and these policies are com-
plementary to the actual policies directly promoting
firm-based R&D. The end result of a successful
process of introducing and diffusing R&D into the
economy would be relatively well-functioning mar-
kets for these services. This would be a dynamic
counterpart and a path leading to materialization of
Marshallian external economies.
I now summarize the main elements of the altema-
tive view of R&D and technological policy: (i) a
broader definition of externalities than that usually
associated with technological or pecuniary extemali-
ties - multidisciplinary externalities which include
an explicit management and organizational compo-
nent; (ii) The notion of “routine” as put forward by the
behavioralist theory of the firm and refined and inte-
grated by Nelson and Winter - particularly as far as
new search and R&D routines which incumbent NIC
firms must adopt to assure an on-going process of
technological development; (iii) a dynamic view of
learning about R&D/innovation through time includ-
POLICY 451
ing the possibility of exhaustion of learning opportu-
nities; (iv) explicit consideration of institutional
adjustments and adaptations to allow for full-fledged
diffusion of R&D into the economy; (v) explicit con-
sideration of learning by government as far as the pol-
icy is concerned, including the whole issue of policy
capabilities (see Teubal, 1994a).
Feature (i) implies pervasive externalities, at least
during the first 5- 10 years of the systematic effort of
government to introduce and diffuse R&D/innovation
into the economy. This would be specific to NIC con-
texts and would explain the nature of policies support-
ing R&D, at least initially, in this setting particularly
the centrality of the neutrality principle (Teubal,
1984); and the different prescription that would follow
for an advanced country setting (see the works of
Nelson mentioned above). Thus the requirements for
specific project information so much emphasized by
Nelson are much lower since whatever project you
support there always are likely to be significant exter-
nalities, managerial and others. The second logical
relationship among the assumptions mentioned above
relates to (iii): the exhaustion of learning potential
which (together with iv) would imply in some sense
the need for reducing government support at a later,
mature, stage of the policy (all of this under a back-
ground of a strong learning process that propelled the
economy to the mature stage). Thus the stage is set for
catalytic policies and the existence of a technology
policy cycle. Salient feature (v) further reinforces the
desirability of neutrality at the early stage of policy -
given the fact that selectivity requires much more
information about projects and more capabilities
within government. It also reinforces the trend to
selectivity at the mature stage - not only for
“demand” reasons, i.e., the fact that many projects
then will be undertaken without government support;
but also for “supply” reasons namely the capabilities
accumulated by government through the infant phase
of the technology policy cycle.
Finally the notion of routines as applied to firms
performing R&D/innovation, while not logically nec-
essary, significantly enhances both the initial difficul-
ties of implanting R&D/innovation within the system
and the subsequent endogenous routinization of these
activities (it may even be said that DIR are reinforced
when firm’s behavior is largely determined by rou-
tines which do not easily change). The distinction
between policy phases will be made even sharper than
what they would be otherwise.
3. THE TECHNOLOGY POLICY CYCLE AND
ITS INFANT PHASE
Tables 1 and 2 present the main features of the
infant, experimental and mature phases of an “ideal”
firm-based, R&D/innovation promotion policy. Each
452 WORLD DEVELOPMENT

Table 1. Technology policy cycle - rhe infant stage

Obstacles, market failures Policy approach and policy

Objectives/targets and policy constraints components

-Widespread endogenization -Lack of good R&D projects - Learning approach: government agency
of the R&D process becoming an N3 network entrepreneur;
- Pervasive market failures generating relevant project taxonomies;
-Collective, multidisciplinary codification of policy experience
& cumulative learning process -Absence of R&D (and search)
routines at firms -Massive and flexible support
-Achieving “critical mass”
of projects - Underdeveloped R&D consultancyl - Mix between finance/monetary
advisory services and financial incentives and institutional/market-
- Developing policy capabilities services markets building policies

-Defining the specifics of -Partially inadequate institutional - Predominance of neutrality in

firm based incentives framework incentives/finance

- Inadequate policy approach and - Proactive policies (project generation)

policy capabilities by government
-Investments in new policy capabilities
(training; staff work, etc.)

Table 2. policy cycle: the mature stage

Technology

Obstacles, market failures Policy approach and policy

Objectives/targets and policy constraints components

Objective:
-Restructuring of policy -Budget constraint

Target:
- Reduced support for (“new” - Political constraints (e.g., political
category of) routine projects clout of large firms)

- Stimulating shift to “complex” - Inadequate capabilities to identify -More selectivity and less universality
R&D relevant market failures and in incentives
associated R&D project categories
-Supporting new classes of
sophisticated technological effort - Scarcity of R&D personnel
(e.g., precompetitive, cooperative
(projects) -High transaction costs

- Obstacles, market failures and

new categories of
constraints associated with new
projects
types of R&D (infant stage)

phase has its specific objectives and targets (column
1); a specific set of obstacles, market failures and
policy constraints (column 2); and a policy approach
and set of policy components of its own (column 3).
The differences in objectives and targets are central:
while during the infant stage the objective is to pave
the way for widespread endoenization of the R&D
process in the economy-first and foremost by assur-
ing a collective, cumulative and multidisciplinary
learning process in R&D (which in turn might require
the execution of at least a critical mass of “good”
R&D projects) - the objective of the mature phase is
rather that of restructuring the R&D promotion policy
(both in terms of reduced support of routine R&D and
in terms of encouraging firms to undertake more com-
plex and high risk/high expected return projects).”
The assumption underlying this view of the mature
phase objectives is that take-off or endogenization of
the R&D process has already taken place as a result of
successful policies at the infant stage; and that a set of
routine projects has emerged, one where learning has
to some extent been exhausted and where significant
improvements in appropriability have reduced the gap
between social and private profitability. Notice also
 R&D AND TECHNOLOGY
that a target of policy at the infant stage is develop-
ment of capabilities to undertake the restructuring
required at the later phase while increasingly applying
selective rather than neutral criteria of support.
One of the significant differences between the two
phases relates to the policy constraints facing decision
makers. Under an ideal scheme such as the one being
traced here a real budget constraint does not exist at
the infant stage since there is a generalized absence of
good projects and of associated search and manage-
ment/organizational routines. Thus essentially any
“good” project (and the criteria for “goodness” must
be absolute rather than relative here and quite flexible
and general at that ) must receive government support.
This is not the case at the mature phase where a con-
stant flow of privately profitable projects continu-
ously emerges from the system such that, at infant-
stage levels of support, there would be “excess
demand” for government funds (rather than excess
supply), i.e, the budget constraint would be effective.
At this later phase however, the political clout of large
firms may hinder the restructuring of the funds toward
the higher risk and new types of projects and activities
(such as precompetitive, collaborative consortia
rather than single-firm product/process development).
Reduction in support of routine projects, of course, is
a result of the fact that while pervasive market failures
characterize the infant stage, these are localized
within particular groups of projects (more sophisti-
cated, and larger projects; and different kinds of pro-
jects altogether, requiring additional routines within
firms) at the mature phase. Correspondingly,
enhanced selectivity and probably a set of criteria and
policy instruments catering to different classes of pro-
jects should substitute the largely massive and neutral
support of the infant stage.
Two additional points should be mentioned in con-
nection with the infant stage prior to discussing in
some more detail the nature of the policies imple-
mented: first, the need to promote and build markets;
and second, institutional adaptations. I will expand on
the former. Building markets refers first and foremost
to markets of services supporting R&D and innova-
tion - consultancy and advisory services; tests and
analysis, and financial services. These markets proba-
bly do not exist initially where sources of supply are
fragmented or non-existed and where the “needs” for
such services on the part of R&D performers are not
yet well articulated. A full-fledged R&D performing
sector will certainly benefit from such markets; and
vice versa, i.e., a mutual or reciprocal externalities sit-
uation. The associated potential coordination failure
may justify policies which not not only promote R&D
but also, in parallel, stimulate the building and per-
fecting of such markets.QThe possibility of this being
the desirable course of action is greater at the infant
than at a later stage of “diffusion” of R&D in the
economy.
POLICY 453
Market-building is relevant for only a small
fraction of the R&D process itself - for numerous
reasons the penetration of R&D into the economy is
done first and foremost by user organizations rather
than by specialized suppliers of knowledge (this may
increasingly be less true due to the emergence of
world markets for certain types of technology, a result
of the process of globalization).‘” Parts of the R&D
process within firms, however, may be done by out-
side specialists, e.g., the design of a specialized chip
for an instrument, certain types of research on
materials; etc. These providers of knowledge should
then be included within the market-building efforts of
the government agency in charge of policy.
Some attention should be given to the policy itself
- the approach and its components - at the infant
stage. It is important to provide unambiguous, sus-
tained and massive support of good projects while -
as mentioned above - simultaneously build markets
and adapt institutions. The approach should be neutral
(or include a significant component of neutrality) both
because of enormous uncertainty of where market
failures are located and because of the presumption
that these are pervasive (see above). Moreover, a
proactive policy stimulating the creation of new pro-
jects should be adopted.
As mentioned, a central aspect of the policy
approach at the infant phase of the technology policy
cycle is the promotion of learning both within the
recipient firms and within the government agency
executing the policy. This involves numerous aspects,
starting from an awareness of the impossibility of
planning (“learning,” in contrast to “planning” - a
desirable feature put forth by Imai et al., 1988 in the
context of innovation activity within firms); and a
nonlinear model of the innovation-promoting policy
process (in parallel to the nonlinear or interactive fea-
ture of the innovation process imbedded in the so-
called innovation or product cycle, see Kline and
Rosenberg, 1989).
A second crucial aspect of the “learning approach’
mentioned above is assuring the existence of a “collec-
tive” learning process which first and foremost implies
creating the conditions for the sharing of experience
among “users” of the promotion schemes (particularly
nonproprietary information and experience such as that
associated with search, project selection and innovation
management). More forcefully, the government agency
should attempt to disseminate widely “nonproprietary”
technoeconomic information generated by project
experience. We may visualize, in this connection, a sit-
uation where nonproprietary experience from firm i
would, through the government agency, flow to firm j.
The agency may become a network Private Branch
Exchange (see Teubal, Yinnon and Zuscovitch, 1991)
performing the switching function within a particular
type of network: that linking the agency with the popu-
lation of recipient tirm~.~~
454 WORLD DEVELOPMENT

This learning function should also include an reductions in the rate of subsidization (or the share of
attempt at generating relevant taxonomies of projects incentives over R&D costs) during the first five or
and firms which may enhance fitness or successful more years of implementation of the program.r7 Major
coupling between the two (while assuring that know- changes are, however, expected at the mature phase in
ledge about this becomes “common knowledge” as far connection with the restructuring needs of the policy.
as possible!). Finally, the long-term policy needs An excellent example is that of Korea (Kim, 1993)
require creating policy capabilities both through for- where the share of government was reduced during
mal training efforts and through extensive staff work 1971-87. Additional examples of reductions in the
involving mapping of technology needs and market share of government-financed R&D in total business
failures; and by identifying the conditions for com- enterprise R&D for OECD countries is shown in
mercial success in innovation in various areas and Table 3.r*
industrial branches. It is clear not only that policy I will attempt to trace three alternative profiles of
should not be associated too closely with pecuniary government support to R&D through time, each one
incentives exclusively; but that in addition to institu- linked to a particular set of external and domestic
tional adaptations, both market building and extensive characteristics. The specific profiles of government
“search and information-gathering activities” should support through time will depend on at least three
be undertaken. major factors: the extent by which firms’ R&D at the
infant staged focused or not on very dynamic techno-
logical and market areas; whether a dynamic group of
4. PROFILES OF GOVERNMENT SUPPORT firms has emerged who is poised to enter a new phase
THROUGH TIME - THE MATURE PHASE in R&D - one directed to larger, more risky and
potentially more profitable projects (we term this
In the implementation of the R&D promotion pol- emerging new category of R&D as “complex”); and
icy in its infant phase government support (or subsi- whether full or partial policy restructuring is taking
dization) of R&D might have to represent at least 50% place - where full restructuring involves both reduc-
of R&D project costs. This seems to be a reasonable ing support to routine projects and increasing support
division of risk and of finance between the govem-
ment and the business sector -reflecting, on the one
hand, the need to provide incentives; and on the other, Table 3. Share of business enterprise R&D financed by
reasonable assurance of avoiding “moral hazard.” It government @ercentage)*
also reflects approximately the actual situation in a
number of contexts (e.g., the basic Israeli support 1981 1985 1989
scheme has been a 50% grant scheme since its incep-
tion about 25 years ago). The absolute amounts will Australiat 8.4 6.9 3.0
Austria 7.4 7.9 8.0
also increase significantly once the R&D process in
Belgium 8.3 8.4 6.0
the economy takes off and this may happen after the
Canada 10.7 12.0 10.2
critical mass of projects triggers the above-mentioned Denmark 12.4 9.9 11.7
collective learning process. Finland? 4.2 3.2 3.1
Numerous obstacles may, however, lie in the way Francet 24.6 23.4 19.3
of effective take-off: bureaucratic procedures associ- Germany? 16.9 15.3 11.0
ated with extending the incentives, whether they are Greece$ 4.6 14.7 9.5
loans or subsidies (e.g., the first years of the Fidetec Iceland 38.3 15.8 10.9
program in Mexico, in connection with the require- Irelandt 13.7 12.4 6.9
Italy$ 8.8 16.9 16.3
ment that private banks rather than the government
Japan? 1.9 1.6 1.2
agency extend loans for R&D)15; a passive rather than 7.5 12.6 10.6
Netherlandsj:
a proactive policy toward the generation of R&D pro- New Zealand7 16.4 n.a. 6.7
jects, e.g., resulting from an attitude such as “if firms Norwayt 25.3 18.8 19.6
want to do R&D let them come to us with good pro- Portugal* 1.6 2.9 2.5
jects” (this may result from a misconceived perception Spain* 4.1 7.7 11.8
of the nature of firms and the difficulty of introducing Sweden? 13.6 11.6 11.5
new management and organizational routines); and Switzerland 1.3 1.8 0.8
absence of an explicit learning approach.r6 Finally, Turkey n.a. n.a. n.a.
United Kingdom? 30.0 23.0 17.2
effective take-off in a number of contexts, may be hin-
United States7 31.6 32.3 30.9
dered by the absence of explicit attempts at diffusing
the program especially among SME’s. Source: OECD, STIID Data Base, July 1992.
Although the rate of growth of government support *See OECD 1993.
will depend crucially on the rate of growth of indus- tDecrease in share.
trial R&D there are no apn’on’reasons to expect major SIncrease in share.
 R&D AND TECHNOLOGY POLICY 455

Table 4. Patterns of government support and R&D growth -mature stage

Dynamism of Restructuring Reduction in Explicit reinforcement of Launching of

technology/firms of policy Gr Gr’ Gti

Dynamic “B” “c” “B” “B”. “c”*

Nondynamic ‘A.3

*delayed launch.

both to complex, firm-based R&D and to new (and in support of routine R&D (this requires government
probably more advanced) types of technological effort to be able to perform market failure analysis and to
such as cooperative, precompetitive R&D. I combine have identified the relevant taxonomy of projects).
the first two factors into a “dynamism of firms tech- This is due to the shift of resources toward more com-
nology” variable and use the term TI (= Technological plex etc. R&D (= r’ and Gr’ in the graph) and toward
Infrastructure) and TIP (= TI Policy) to indicate the set TZ (Gti in the graph).
of new types of technological effort and associated
policies which ideally would be receiving support or
launched at the mature phase. The set of possible
combinations of circumstances affecting the time pro-
file of government support to R&D is reflected in the
cells of Table 4. I will focus on three possible patterns
of government support (and correspondingly of R&D
growth) which are traced in Figure 1.

(a) Pattern A: Non-dynamic areas/fimts and partial

policy restructuring
I a: Pattern A
In this case the total R&D outlays schedule (R&D
in Figure 1a) is S-shaped and the government-support
schedule (G) is bell-shaped, i.e., we expect an
absolute reduction in total government support and an
even more drastic reduction in the share of total R&D G (=Gr + Gr’ + Rti)
paid for by the government. This is an interesting case
since it very sharply illustrates one implication of cat-
alytic policies (support might decline from 80% of
total R&D to 20% in a matter of years), although its
relevance might be limited to what will be termed
“routine” R&D. Moreover, partial policy restructur-
1b: Pattern B
ing might not have a very significant effect on growth
both due to lack of dynamism of technologies/firms
and to absence of positive restructuring towards r’
(“complex” R&D) and TIP.

(b) Pattern B: dynamic areas/firms and total policy

restructuring

In this case we expect the government-support 1c: Pattern C

schedule (G) of Figure l(b) to increase absolutely
probably with some monotonic reduction in the share
of total technological effort (R&D = r* + r’* + TI*)
being supported. Note that R&D’s S-curve if traced
within the same pair of axes would lie above the cor-
responding schedule for Pattern A (due to the more
dynamic context). Under total policy restructuring,
government outlays do not decline despite a reduction
Figure 1. Time patterns of R&D and of government support.
r*: “routine” R&D; r’ (r’*): “complex” R&D (“complex”
R&D resulting from an explicit promotion scheme); TI
(TI*): expenditures on technological infrastructure (techno-
logical infrastructure expenditures resulting from an explicit
promotion scheme); Gr: Government support of “routine”
R&D; Gr’: Government support of “complex” R&D; Gti:
Government support of technological infrastructure.
456 WORLD DEVELOPMENT
The impact of the total restructuring of technology
policy under Pattern B is likely to be high, both
because the dynamic context enables the experience
associated with early, “routine” projects to be effec-
tively harnessed for entering the “complex” (firm-
based) R&D project areas, a fact that might lead to the
creation of a separately identifiable high-tech sector in
the economy (over and above the “diffusion” of R&D
within the mid-tech and traditional sectors).i9
(c) Pattern C: intermediate situations -
nonmonotonic profiles
Situations lying between the two extremes could
include dynamic areas on the one hand and only par-
tial “positive” restructuring, i.e. either toward more
complex firm-based R&D or toward TIP.
Alternatively significant delays in implementing TIP
take place due to bureaucratic inertia and opposition
of either firms or scientists (who are afraid that initiat-
ing TIP is a prelude to even sharper reductions in the
support of traditional activities). Whatever the partic-
ular situation, the eventual reduction in Gr will not be
immediately compensated by an increase in Gti (see
Figure lc). The result might be a “scalloped” total
government-support schedule with a period of relative
(and even absolute) reduction in support being fol-
lowed by one of increasing support (Figure lc).
It is clear that numerous intermediate cases could
be built which combine different circumstances both
about what “should” be done and about what in fact is
being done.
The cost to the national economy of a delayed
launch of TIP (and corresponding to this, Git) - in
terms of reduced rates of growth and reduced accumu-
lation of intangible technological assets - may be
large indeed.
5. SUMMARY AND CONCLUSIONS
The paper presents a technology policy framework
based on the view that the widespread diffusion of
R&D in the business sector of an economy - starting
with R&D performed by firms - is a collective, mul-
tidisciplinary and cumulative learning process charac-
terized by dynamic increasing returns. The process,
which partakes of characteristics by which a new tech-
nology variant takes hold in the market implies a cat-
alytic approach to technology policy based on a fun-
damental distinction between an infant and a mature
phase of policy implementation. Since certain aspects
of learning associated with the management and orga-
nization of R&D within firms are both pervasive
(especially for NICs just entering the R&D business)
and to some extent exhaustible, a shift from extensive
neutrality in incentives to greater selectivity (and less
universality) is in order.z0
A necessary condition for successful take-off and
consolidation of firm-based R&D and the possibility
of effecting the above-mentioned policy restructuring
is the adoption of a “learning” rather than a “planning”
approach to government policy. This is in line with an
evolutionary rather than a neoclassical perspective of
innovation, economic change and technology policy
(Nelson and Winter, 1982; Metcalfe, 1993). A major
component of such approach is the transformation of
individual experience with R&D/innovation -
including that associated with identification, selection
and management of projects within firms - into col-
lective experience, i.e., into a body of more or less
codified knowledge about the process available to all
firms. For the above to be effective it is clear that a
systematic approach to R&D and technology policy
should be adopted, one emphasizing the accumulation
and diffusion of intangibles and capabilities in the ini-
tial phase (including activities associated with search)
- both to induce a system take-off and a transition to
maturity; and to set the base for policy restructuring in
the mature phase. Both bureaucratic and political fac-
tors may block either or both of these processes; more-
over, insufficient awareness of the need to develop
policy capabilities may lead to a mediocre level of
implementation. There is no doubt in my mind that a
combination of long-termism and an entrepreneurial
approach by government to the formulation and
implementation of industrial and technology policy is
the best assurance of success in this difficult and less-
known area of growth-promoting policies.
The above characteristics imply that the framework
of analysis is adapted to analyze grant or loan-based sys-
tems where the implementing government agency could
play the role ideally presented above. It would not be
adaptable to analyze automatic tax-incentive schemes
implemented by several countries such as Japan
(Nagaoka, 1990, p. 31), the United States, Canada,
Australia, and other OECD countries. Tax-incentives
would be instances of neutral support of R&D but in
themselves would not conform to the features of a tech-
nology policy cycle. They certainly could be part of such
a policy framework in conjunction with a grant/loan
scheme. In hybrid schemes of this kind grants or loans
(provided by a proactive government agency which also
adopted the “learning” approach) would be directed to
provide incentives to SME’s with little or no prior expe-
rience with R&D/innovation; to young firms and new,
technology-based start-ups; and probably to a minor
extent, to larger firms especially those who have not yet
routinized R&D. Tax incentives would be directed to
larger firms with larger R&D project portfolios and to
firms where the R&D function has already been rou-
tinized. While tax incentives may be important to widely
extend R&D promotion even in our “mature phase” one
should not underestimate the importance of grants (and
to a lesser extent) of loans in inducing system take-off.
Table 5 also shows that grants most probably repre-
 R&D AND TECHNOLOGY POLICY 457

sented the major tool used in the mid- 1980s for promot- however, it is clear that the market should take over a
ing industrial R&D in OECD countries.21 lot of the task of implementing R&D in the economy.
The framework is useful to analyze both the pat- The catalytic role of government will always be
tern of R&D and the relative share of publicly sup- important due to the need for stimulating increasingly
ported R&D through time. There are widespread cir- complex and novel types of R&D including precom-
cumstances for reducing the relative share of petitive, generic and collaborative projects; techno-
government through time and even, in some cases, the logical infrastructure; projects involving both firms
absolute outlays after a certain point. In all cases, and academic institutions or government laboratories;
and eventually, promotion of the integration of local
firms into world innovation networks. This role need
Table 5. Government policy instruments used to support
industrial R&D: 1985-T%* not decline through time and in some cases may even
outweigh the declining role played by governments in
Tax Grant + supporting “routine” R&D.
concessions Grants Loan loan The above framework makes technology policy
perfectly consistent with a market economy and even
United States 65 35 with attempts to reduce the role of government in the
Canadat 100 economy (for example, in Eastern Europe and Latin
Japant 35 25
American countries). It also provides a more balanced
CECt 100
view of the role of such policies in the process of
Denmark 80 20
France 25 75 structural change and growth than that flowing from
Germany 10 90 the World Bank report on growth of the East Asian
Greece 100 Economies (World Bank, 1993).12
Ireland 100 It is true that the catalytic role of technology policy
Italy 10 90 is intended to promote structural change, in accor-
Netherlands 50 40 10 dance with the structuralist approach to growth and
Portugal 100 development (Justman and Teubal, 1990, 1991) but
Spain 100
this should be interpreted broadly. Thus, the major
United Kingdom 65 35
Austria
structural change targets are the introduction and dif-
50 50
Finland 22.5 31.5 40 fusion of R&D within the economy (as we have seen
Norway 100 this is a discrete process because of dynamic scale
Swedens IO 30 economies, reinforced by the need to change firm rou-
Switzerland 100 tines); promoting the increased sophistication of
Australia 70 30 industry; and promotion a class or category of sectors
which we may term “high-tech.” The first two at least
*Approximate share of 1985-86: expenditures (percentage). are critical for economies undergoing liberalization
tTax concessions are not included.
and deregulation, under conditions of globalization
SApart from tax concessions and grants, there are equity
since they may enable a smoother integration into
capital of 2.5% and consignment subsidies of 40%.
Consignment subsidies involve research commissioned by world markets. Thus, neutral Technological policy (a
central government from private industry associations, central aspect of the policies undertaken) is an impor-
groups of private firms and government laboratories in tant component of growth promoting policies for
national cooperative projects such as the large-scale pro- NICs - a fact largely missed in the World Bank
jects, or the Fifth-Generation Computer Project. report on growth in Southeast Asian economies with
PExcluding technical R&D support appropriations which go its tendency to identify industrial and technology poli-
to private industry, universities and government-backed cies with selective infant industry promotion. It is
institutions via the National Board of Technical
worthwhile noting that the financing of this catalytic
Development, STU. Sweden also has a policy of guarantees
role of government, even under periods of price stabi-
which consists of 1% of the expenditure.
Source: OECD (1990). Loans are at face value, i.e. gross lization, should not deter Ministries of Finance, espe-
government budget expenditure. Note that for Germany, the cially given that the small or moderate sums initially
inclusion of data on support to industrial R&D by subcentral required to support R&D are intended - and in fact
authorities may influence comparability with other coun- will, if the policy is successful - to trigger a process
tries. making this support unnecessary in the future.

NOTES

1. This was first recognized, to my knowledge, from an industrial and technological policies for growth was put for-
analysis of the grant-based, neutral, industrial R&D promo- ward in Justman and Teubal (1990). in which a distinction
tion schemes launched by the Government of Israel since the was made between three levels of policy: a vision level; a
late 1960s (Teubal, 1984). The generalized role of neutral “strategic” level; and a “current support” level. The policy
458 WORLD DEVELOPMENT
approach ascribed then to the latter level is essentially neutral
whereas selectivity prevails at the strategic level. The cat-
alytic approach of this paper introduces a more realistic
dimension to the overall I&T policy framework, e.g., selec-
tivity and neutrality may coexist at both the strategic and the
current support level. See also Justman and Teubal(l986).
2. A systematic analysis of the “learning to innovate”
occurring within an Israeli electronics firm can be found in
Teubal(1982). Within the first 10 years of existence of the
Elscint - a diagnostic imaging instrumentation firms - a
total of nine projects were identified, of which four were suc-
cessive generations of nuclear-medicine “gamma cameras”
and two successive generations of “scanners.” A strong
increase in direct project profitability across generations was
registered and this was interpreted in terms of spill-overs
from generation to generation. These spillovers were multi-
disciplinary, i.e., involved not only technical knowledge but
also knowledge about user needs, the coupling of technology
to these needs, marketing, and the overall strategy of innova-
tion for this particular high tech area. Under very conserva-
tive assumptions between one-third and two-thirds of total
(direct and indirect) profitability of later generations of the
“gamma camera” could be attributed to spillovers from ear-
lier projects. The analysis gives a concrete example of multi-
disciplinary, cumulative learning within an individual firm.
A prior study of the whole biomedical electronic instrumen-
tation sector in its infant phase identifies part of the collective
learning process which the eight firms of the sector were
undergoing. A particularly important aspect was learning
about the relationship of complementarity and substitution
between R&D and marketing. When needs were clearly
defined more and more successful R&D might reduce the
need for marketing; whereas when the increased R&D is
associated with increasingly less known and new product
types (up to the point of launching completely new product
classes) the relationship is one of complementarity, i.e., more
R&D requires more marketing for commercial success. See
Spiller and Teubal (1977).
3. An additional and no less important aspect of the not
purely technical learning pertains to the generation of new
projects. Experience in R&D and innovation generate
numerous new ideas about possible commercially successful
new projects. Correspondingly, the absence of such experi-
ence means that a major bottleneck in the penetration of
R&D into a NIC context not familiar with this activity is
absence of (good) projects. This in fact explains the search-
intensive feature of the early stage of policy implementation
(Teubal, 1994a).
4. Justman and Teubal(l986) have broadened the notion
of externalities from R&D or innovation to include organiza-
tional and management aspects of the process. In Teubal
(1984) I stated that the objective of the R&D support policy
of the Government of Israel included the promotion of inno-
vation capabilities, i.e., explicit organizational and manage-
ment components.
5. Alternatively, we may say that R&D is increasingly
being undertaken “endogenously” by market forces (Teubal,
1994a). An additional factor supporting such endogenization
is “market-building” (see Teubal, 1994b and Justman and
Teubal, 1993). Market-building in connection with advisory
and financial services linked to R&D and innovation (see
Teubal, 1992) is related to Marshallian external economies,
that is, they are internal to the sector of “R&D performing
tklS.”
6. The catalytic framework, therefore, explains the con-
tinuous restructuring of technological policy which normally
takes place - a shift from firm-based R&D to cooperative
R&D, etc. See Dodgeson and Rothwell (1992) for the evolu-
tion of European policies in this regard.
7. The Arrow conditions are of course external
economies (or private nonappropriability of the results of
R&D); indivisibilities; and the existence of inherent uncer-
tainty in this activity. All of these might deter potential
investors (see Arrow, 1962) to socially desirable inven-
tions/innovations. The efficiency or degree of perfection of
capital markets will influence both the extent to which inno-
vation -related risks may be reduced and the effective finan-
cial constraint facing innovators.
8. For a more general attempt to generate a policy frame-
work for I&T policies supporting socially desirable activities
(SDA’s) - which include both R&D and other activities -
see Teubal(l994a).
9. The importance of neutrality in R&D support has
finally been recognized in actual policy making. Twenty
years ago I am aware only of tax-relief mechanisms (United
States, Canada, etc.) and of Israel’s neutral subsidies-to-
R&D scheme. Nowadays, most countries have neutral R&D
schemes involving grants (OECD, 1990), although there is a
spectrum of specialized programs by technological area
(biotechnology, information technology, materials). These
latter programs should be viewed more in terms of offering a
menu of policy choices to firms; of adapting criteria to the
particular requirements of each technological area; and as
devices for effective search strategies (see Teubal, 1994a). In
themselves they do not necessarily express implementation
of selective policies.
10. The term “network entrepreneur” was used in Teubal,
Yinnon and Zuscovitch (1991) to describe the entrepre-
neurial activity linked to the creation of a new user-pro-
ducer network - one associated with a new class of capital
goods. The objective of such a network is collective leam-
ing for market-building. The network need not arise spon-
taneously in every case since user coordination to achieve
critical mass may be required initially. Similarly, the gov-
ernment agency may have to make a special effort in order
to generate a network of R&D performers which may con-
tribute to the spread of knowledge about what is and how to
do R&D.
11. The diversification of Elscint, an Israeli medical diag-
nostic instrumentation firm active in the nuclear medicine
area, to the CAT scanner area was significantly stimulated by
a new support program at the Office of the Chief Scientist
(OCS) of the Ministry of Industry and Trade (“The National
Projects” Program of the second half of the 197Os), which
substantially increased the monetary incentives to R&D.
CAT scanner R&D is more complex and multidisciplinary
work than that undertaken for Gamma Cameras. Part of the
difference in scope and complexity of innovation is reflected
in product price: while gamma cameras were priced at that
time between $50,000 and $1OO,ooO per system (depending
 R&D AND TECHNOLOGY
on the specific configuration ordered), CAT scanners were
priced at a minimum of half a million dollars.
12. A description of the process of building markets for
novel technological services in connection with Basic
Technological Infrastructure Policy (Basic TIP) is presented
in Justman and Teubal (1995). Market-building in our con-
text of promotion of firm-based R&D rather than TI would
preserve some of the main features mentioned there.
13. One reason is transactions costs associated with
accessing the results of R&D through explicit contracting in
“technologyiknowledge” markets. The relationship how-
ever, between user-performed R&D and externally supplied
R&D may be much more complex, involving elements of
complementarity together with substitution. Thus, in house
R&D - by reducing transactions costs associated with
external purchase of knowledge - may be a condition for
accessing the latter source. Moreover, to some extent, the
availability of organizations externally supplying commis-
sioned R&D results may, in some cases, be a condition for
initiation of R&D serving the needs of particular types of
firms and industrial branches @ME‘s in traditional and mid-
tech areas). Sectorial technological centers for example may
be loci of R&D capabilities serving such firms especially
(but not exclusively) when needs for R&D are pressing and
when R&D is not yet feasible in the short term due to firm
size or other factors.
14. Following Teubal, Yinnon and Zuscovitch (1991),
we may term this a N3-network to distinguish it from the
component-assembler network (Nl) and the user-producer
network (N3). The project followers and functional spe-
cialists of the Office of the Chief Scientist, Ministry of
Industry and Trade, have traditionally performed this
informal role with success (this information may be very
helpful for new firms entering the circle of R&D-perform-
ing firms). The role of the government agency would also
involve codification of the information and experience:
and analysis. Teubal and Zuscovitch (1994) used the term
“general discriminating capabilities” to indicate - within
N2 -the increased capacity of a producer to know how to
couple technology to needs. In our context, this would
mean an increased capacity to identify the configuration of
policy tools and actions appropriate to a particular type ol
user/projects.
15. One of the advantages of a grant-based system over a
loan-based system, especially for small and medium-sized
enterprises, is avoiding the need of obtaining loan-repayment
guararitees from recipient firms. This requirement has cre-
ated difficulties during the early stages of R&D promotion
programs in some Latin American countries such as Mexico
and even Chile. The advantages of a grant-based promotion
system are evidenced by the Israeli experience, at least in the
critical early years prior to (and immediately following)
‘*take-off.”
16. The Israeli R&D promotion system has followed some
elements of a “learning approach,” especially as regards the
informal transmission of experience among firms, e.g., on
the part of project overseers. This may also have reflected
some of the advantages of being a relatively small country.
Explicit intensification and formalization of the learning
POLICY 459
progress, through the extensive undertaking of case studies
and attempts at codification of the experience, have not taken
place.
17. It may be that the early years of implementation of a
broad R&D promotion program may in fact be characterized
by an increase in the share of the activity supported by gov-
ernment. This because prior to the program. whatever R&D
that took place received little if any support from public (or
external) sources.
18. The sample includes small, large. leading, and
peripheral countries during the 1980s. The exceptions to
the relative decline of government’s share are first and fore-
most peripheral countries catching-up in R&D such as
Ireland. Portugal, and Spain. In these countries broad sup-
port of R&D presumably began during this decade and our
conceptual framework is consistent with an increase in the
share of government initially (see previous note). A similar
picture holds for Italy. The other case is the Netherlands.
which stands as an exception within the category of
advanced OECD countries. It would be interesting to know
if the increase in the share of government in business enter-
prise R&D in this country during the 1980s results from the
initiation of new programs supporting complex and new
forma of innovation and technological development. Set
below for “alternative time-profiles of government support
for R&D.”
19. This has been the case of Israel, after the launch of the
industrial R&D support scheme in 1970. Both Elscint and the
biomedical diagnostic areas in which this firm specialized
during the first half of the 1970s are indicative of a “dynamic
firm/technology” context. The same combination of
dynamic areas and firms was present elsewhere within hiph-
tech industry.
20. The emphasis on neutrality at the infant stage - while
clear from the early experience of some countries such as
Israel (Teubal, 1984) - was considered until recently as
unjustified since strict application of Arrovian market-failure
analysis, with its emphasis on technological or template
externalities. would point to more selective policies. The
approach of this paper provides an “evolutionary” market-
failure analysis which justifies and even configures govem-
ment intervention even in the presence of “pervasive” exter-
nalities. The combination of such externalities and dynamic
scale economies would justify a relatively neutral promotion
at the early stage of the policy cycle.
21. The experience of countries with R&D promoting
loans and grants have not always conformed to the theory of
this paper. While Israel had one of the earliest of such sya-
terns with success in take-off, it has not restructured in a
timely fashion, not in the sense of reducing support for rou-
tine projects nor (despite some examples to the contrary) in
the sense of early support of precompetitive. cooperative
projects (Teubal, 1993). Mexico is an example where take-
off has either not begun or has been significantly hindered
by bureaucratic procedures associated with a loan-based
system. The Chilean broad-based promotion system, in
place since 1992-93, has been fairly successful, although
no clear take-off has taken place during the first 2-3 years
of operation.
460 WORLD DEVELOPMENT
22. Their emphasis in identifying “interventionist” indus-
trial/technology policy in successful Asian countries with
selective industry promotion of targeted industries is proha-
bly misplaced. Although additional research on these coun-
tries’ experience may be required, my presumption is that in
REFERENCES
Arrow, K., “Economic welfare and the allocation
resources for innovations,” in R. R. Nelson (Ed.), The
Rate and Direction oflnventive Activity (Prineton, NJ:
Princeton University Press, 1962).
Arthur, B., “Competing technologies: An overview,” in G.
Dosi, C. Freeman, R. Nelson, G. Silverberg, and L.
Soete, Technical Change and Economic Theory
(London: Pinter 1988).
David, P., “Heroes, herds and hysteresis in technological
history,” Industrial and Corporate Change, Vol. 1, No.
1 (1992), pp. 129-179.
Dodgeson, M. and R. Rothwell, “European technology pol-
icy evolution,” Technovation, Vol. 12, No. 4 (1992).
Hou, C. and S. Gee, “National systems supporting technical
advance in industry: The case of Taiwan,” in R. Nelson
(Ed.), National Innovation Systems (Oxford: Oxford
University Press, 1993).
Imai, K., I Nonaka and H. Takeuchi, “Managing the new
product development process. How Japanese companies
learn and unlearn,” in K. Clark, R. Hayes and C. Lorenz
(Eds.), The Uneasy Alliance: Managing the Production
Dilemma (Cambridge, MA: Harvard Business School
Press, 1988).
Kim, L., “National system of industrial innovation:
Dynamics of capabilities building in Korea,” in R.
Nelson (Ed.), National Innovation Systems (Oxford:
Oxford University Press, 1993).
Justman, M. and M. Teubal, “Technological infrastructure
policy: Generating capabilities and building markets,”
Research Policy, Vol. 24 (1995), pp. 259-28 1.
Justman, M. and M. Teubal, ‘The structuralist approach to
economic growth and development,” World
Development, Vol. 19, No. 9 (1991), pp. 167-183.
Justman, M. and M. Teubal, ‘The stmcturalist approach to eco-
nomic growth and development: Conceptual foundations
and policy implications,” in R. Evenson, and G. Ranis
(I%.), Science and Technology: Lessons for Development
Policy (Boulder, CO: Westview Press, 1990).
Justman, M. and M. Teubal, “Innovation policy in an open
economy: A normative framework to strategic and tacti-
cal issues,” Research Policy, Vol. 15 (1986). pp. l-138.
Kline, R. and N. Rosenberg, “An overview of innovation,”
in R. Landau, and N. Rosenberg (Eds.), The Positive
SJM Strafegy (New York: National Academy Press,
1989).
Metcalfe, J., “The economic foundations of technology pol-
icy: equilibrium and evolutionary perspectives,” Mimeo
(Manchester: University of Manchester, 1993).
Nagaoka, A., “Overview of Japanese industrial technology
development,” Report of the Industrial Development
Division (Washington, DC: The World Bank, 1993).
some cases major component of government growth-pro-
moting policies included the promotion of R&D and capabil-
ities per se and not only as part of infant industry promotion,
(Korea and Japan seem to he cases of this sort).
of Nelson, R., “Recent evolutionary theorizing about economic
change,” Mimeo (1994).
Nelson, R., “Roles of government in a mixed economy,”
Journal of PolicyAnalysisand Management, Vol. 6, No.
4 (1987), pp. 541-557.
Nelson, R., “Government support of technical progress:
Lessons from history,” Journal of Policy Analysis and
Policy, Vol. 2, No. 4 (1983), pp. 499-5 14.
Nelson, R., Government and Technical Progress-a Cross-
Section Analysis (Oxford and New York: Pergamon
Press, 1982).
Nelson, R. and S Winter, An Evolutionary Theory of
Economic Change (Cambridge, MA: Harvard
University Press, 1982).
OECD, Industrial Policy in OECD Countries - Annual
Report (Paris: OECD, 1990).
OECD, The Impacts of National Technology Programs,
Paris, September.
Spiller, P. and M. Teubal, “Analysis of R&D Failure,”
Research Policy, Vol. 6 (1977), pp. 254-275.
Stoneman, W., The Economic Analysis of Technological
Change (Oxford: Oxford University Press, 1982).
Teubal, M., “The catalytic promotion of socially desirable
activities (SDA’s): A capabilities approach to industrial
and technological policy,” Mimeo (1994a).
Teubal, M., “On market building,” Mimeo (1994b).
Teubal, M., “Report on Argentina’s FONTAR program,”
Mimeo (1993).
Teuhal, M., “Report on the FIDETEC program of Mexico,”
Mimeo (1992).
Teubal, M., Innovation Performance, Learning and
Government Policy (Madison: University of Wisconsin
Press, 1987).
Teubal, M., “Neutrality in science policy: The case of
sophisticated industrial technology in Israel,” Minerva
(1984).
Teubal, M., “The R&D performance through time of a
young, high-technology firm: methodology and illus-
tration,” Research Policy, Vol. 11 (1982), pp.
333-346.
Teubal, M. and E. Zuscovitch, “Evolutionary product differ-
entiation and market creation in turbulent economic
environments,” Paper presented at the EUNETIC con-
ference at the Council of Europe (Strasbourg: October
1994).
Teubal, M., T. Yinnon and E. Zuscovitch, “Networks and
market creation,” Research Policy (1991).
World Bank, The East Asian Miracle: Economic Growth
and Public Policy (Oxford: Oxford University Press,
1993).