Localized Low-Tech Learning in the Furniture Industry

Abstract:     
It is by now an established fact that the so-called high technology industries have experienced growth rates way above average through most years. High technology industries' share of the world manufacturers export has risen from 12 percent in 1970 to 25 percent in 1995. More than one-third of Japan's manufacturing export and more than 40 percent of America's manufacturing export are products from high technology industries, and this development has increasingly led to an international obsession with high technology industries. In a number of countries R&D indicators have by now become the object of intense discussions. Great efforts are devoted to improve a bad relative standing. The aim of this paper is to question whether a national specialization towards high technology industries is the only way by which the mature, developed countries can hope to sustain and augment their economic position. I claim that in contrast to much of the assumptions in contemporary politics and in the majority of the contemporary academic literature on the subject, the countries without a specialization in high technology industries are not left in the backwaters of economic development. Quite the contrary seems to be the case as many advanced, high-cost countries experience an above average economic performance even when specializing in the bottom end of the low-tech industries. The argument is illustrated with empirical material from the wooden furniture industry in general--and the rather successful Danish wooden furniture industry in particular. The possible reasons behind this apparent paradox are discussed.

Number of Pages in PDF File: 35

JEL Classification: L68, O31, O33

working papers series