Scope Economy And Issues In Technology Management

Abstract

In the 1980s, studies of technology transfer in dual-use industries have suggested a slow down in military technology spillovers to the civilian sector. This paper takes an econometric approach to measuring the bilateral spillover effect using the airframe manufacturing industry as a case study. The diffusion of technology benefits the industrial art regardless of where technological innovation is originated.  When horizontal spillover is measured as a bilateral flow of technology transfer regardless of the direction of the flow, i.e., either from military to civilian or from civilian to military, we find no evidence of a slow down, in airframe manufacturing at least, between 1961 and 1985, a period of rapid technological change in both military and commercial aircraft production. We also trace the flow of technological development in aircraft engine and measure its effect downstream on aircraft manufacturing productivity to obtain an estimate for any vertical spillover.  We find a negative relationship between upstream innovation and downstream manufacturing cost, but the linkage effect is statistically insignificant.  We suggest that further study should be pursued in a framework incorporating some concepts from organizational theory to better understand the differences in institutional structure that affect the adaptation and development of dual-use technologies, and the social setting that become necessary to achieve dual-use.