Competitiveness Policy Options: The Technology-Regions Connection

Competitiveness can be defined as the ability of an economy to maintain stable or increasing market shares in an economic activity while sustaining stable or increasing living shares for those who participate in it. Government policy in all countries has strong effects on competitiveness. With the turn away from a Cold War economy the Clinton Administration has pursued a technology policy explicitly linked to the quest for heightened national competitiveness. It is based on a rejection of Reagan-Bush era analyses of the competitiveness problem, which centered on cost reduction in industry. There are many different forms of technology policy for competitiveness, however. Some center on labor quality, while others center on technological spillovers between industries. An effective policy should promote technological spillovers in the economy. All such policies, moreover, are only effective if they are organized and governed properly. The Clinton-Gore policy has many different programs and methods of governance. This paper argues that it should reinforce the regional level of organization of technology policy formulation and implementation.