Technology and Industrial Progress by Nick von Tunzelmann
This is an impressive book. Not only because of its length (more than five hundred pages), or the large number of books and articles cited in the text (between seven and eight hundred). What really makes this book exceptional is its broad coverage and the systematic presentation of its subject.
The focus is on industrialization and growth. Following an introduction, the author presents an overview and discussion of earlier and more recent analyses in this area. He then analyzes the industrialization processes of all major capitalist countries, starting with Britain in the industrial revolution. The book also contains a discussion of industrialization in the USSR and a comparison of East-Asian and Latin-American evidence.
Each chapter is based on a common scheme of analysis, highlighting growth, technology, organization, finance, demand and policy. Thus, the book is not just another volume on modern economic history. Rather, it is a scholarly presentation, discussion and assessment of the theoretical and empirical literature on industrialization and growth. The treatment of the various contributions is balanced and fair. Many readers will undoubtedly find this book valuable as an introduction to the literature in this area and as a guide to further reading.
An important argument in the book concerns the difference between product and process knowledge. What really matters in industrialization, the author argues, is the latter, i.e., the ability to know the “ways in which technological principles are realized in actual production” (p. 33). Hence the emphasis on factors such as organization and management — downplaying to some extent the positive growth stimulus for industrial late-comers from so-called “spillovers” from the already industrialized countries. Here the author sides with Moses Abramovitz and others in emphasizing the importance of “social capabilities” and indigenous efforts for successful catch-up and industrialization.
The importance of processes also comes out very clearly in the author’s analysis of industrialization in different countries and periods. The industrial revolution in Britain is described as based on process innovation. So is the more recent industrialization in the USA and Japan, though in different ways. In all three cases, organizational innovations at the level of the firm are shown to have been important. Thus, firms play a vital role in the author’s account because they are considered as the main “knowledge-accumulating institutions” in the economy (p. 5). The spectacular failure of the attempt by the USSR to catch-up with the western world is to a large extent explained by the neglect of processes in general and the role of firms in this context in particular. Similarly, the weak performance of Latin America when compared to East Asia in the last decades is also shown to be related to a neglect of processes and the lack of indigenous technological capabilities in firms, though it is acknowledged that other factors have had a say as well.
Many other interesting points emerge through the discussion of the performance of different countries and periods, such as the impact of various external and internal factors on industrialization, and we cannot do full justice to these here. Suffice it to say that the author generally emphasizes the importance of diffusion and how vital indigenous technological capabilities are in this respect. The author also notes that fundamental innovations/new technology systems often take very long to diffuse, so that their full economic impact may not be recognizable in less than a half century or so.
G.N. von Tunzelmann: Technology and Industrial Progress. The Foundations of Economic Growth, Aldershot: Edward Elgar 1995