Table Of ContentCOMPETITIVE INDUSTRIAL
DEVELOPMENT IN THE AGE OF
INFORMATION
As the global economy has evolved and matured, transnational corporations,
small-to medium-sized enterprises (SMEs) and governments have emerged as
the principal players in industrial development. Knowledge and technology
have also taken on new importance as driving forces for economic growth.
This work examines policy issues arising from these developments, which will
be of fundamental importance in a twenty-first century Age of Information.
Discussion focuses upon:
• the role of national and subnational industrial policy in promoting economic
performance
(cid:127) the impact of tax policy upon domestic technology development
(cid:127) bank financing of SMEs
(cid:127) the need for cooperation in the development of economically viable
industrial policy
With special reference to the technology sector, contributors demonstrate that
globally oriented industrial policy must promote both competition and
cooperation in the domestic economy. Domestic competition must be viewed
as a function of global competition, strengthening a country’s technological and
economic development. However, domestic cooperation allows parties to
compete on a global scale. It is concluded that this ‘New Competition’,
embracing cooperation, is the key to understanding the four major policy
issues discussed.
Competitive Industrial Development in the Age of Information draws upon detailed
case studies of technology sector industries to provide theoretical and empirical
analyses of changing economies and changing policy needs. With contributors
from academic, legal, financial and policy advisory backgrounds, this work
advances research into policy questions of increasing importance.
Richard J.Braudo is a Toronto- and Dallas-based Business Economist and
Management Consultant. He has been a Business Economist for more than
fifteen years and a lawyer since 1996. His research includes work on
competition and constitutional law, health care, international trade policy, and
e-commerce.
ii
Jeffrey G.MacIntosh is a Professor of Law at the University of Toronto. He
has written extensively on topics relating to corporate and securities law and
has recently focused his research upon the financing of small, high technology
companies.
ROUTLEDGE STUDIES IN INTERNATIONAL
BUSINESS AND THE WORLD ECONOMY
1 STATES AND FIRMS
Multinational enterprises in institutional competition
Razeen Sally
2 MULTINATIONAL RESTRUCTURING, INTERNATIONALIZATION
AND SMALL ECONOMIES
The Swedish case
Thomas Andersson, Torbjörn Fredriksson and Roger Svensson
3 FOREIGN DIRECT INVESTMENT AND GOVERNMENTS
Catalysts for economic restructuring
Edited by John H.Dunning and Rajneesh Narula
4 MULTINATIONAL INVESTMENT AND ECONOMIC STRUCTURE
Globalization and competitiveness
Rajneesh Narula
5 ENTREPRENEURSHIP IN A GLOBAL CONTEXT
Edited by Sue Birley and Ian Macmillan
6 THE GLOBAL STRUCTURE OF FINANCIAL MARKETS
An overview
Edited by Dilip K.Ghosh and Edgar Ortiz
7 ALLIANCE CAPITALISM AND GLOBAL BUSINESS
John H.Dunning
8 MULTINATIONAL ENTERPRISES FROM THE NETHERLANDS
Edited by Roger van Hoesel and Rajneesh Narula
9 COMPETITION, GROWTH STRATEGIES AND THE
GLOBALIZATION OF SERVICES
Real estate advisory services in Japan, Europe and the United States
Terrence LaPier
10 EUROPEAN INTEGRATION AND FOREIGN DIRECT
INVESTMENT IN THE EU
The case of the Korean consumer electronics industry
Sang Hyup Shin
11 NEW MULTINATIONAL ENTERPRISES FROM KOREA AND
TAIWAN
Beyond Export-led Growth
Roger van Hoesel
iv
12 COMPETITIVE INDUSTRIAL DEVELOPMENT IN THE AGE OF
INFORMATION
The role of cooperation in the technology sector
Edited by Richard J.Braudo and Jeffrey G.MacIntosh
13 THE GLOBAL RESTRUCTURING OF THE STEEL INDUSTRY
Innovations, Institutions and Industrial Change
Anthony P.D’Costa
14 PRIVATISATION AND LIBERALISATION IN EUROPEAN
TELECOMMUNICATIONS
Comparing Britain, The Netherlands and France
Willem Hulsink
15 THIRD WORLD MULTINATIONALS
Paz Estrella Tolentino
COMPETITIVE
INDUSTRIAL
DEVELOPMENT IN THE
AGE OF INFORMATION
The role of cooperation in the
technology sector
Edited by Richard J.Braudo and Jeffrey G.MacIntosh
London and New York
First published 1999
by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2005.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s
collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.”
Editorial material and selection © 1999 Richard J.Braudo and
Jeffrey G.MacIntosh; individual chapters © the individual contributors
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in
writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Competitive industrial development in the age of information: the
role of cooperation in the technology sector/edited by Richard J.
Braudo and Jeffrey G.MacIntosh.
p. cm.
Based on a May 1995 workshop held at the Faculty of Law,
University of Toronto, and sponsored by the Faculty of Law with the
law firms of Borden & Elliot and Stikeman, Elliot; and the Canadian
Bar Association-National Competition Law Section.
Includes bibliographical references and index.
1. High technology industries—Government policy—Congresses.
2. Industrial policy—Congresses. 3. Competition—Government
policy—Congresses. 4. Corporations—Taxation—Law and legislation-
Congresses. 5. Industrial laws and legislation—Congresses.
I.Braudo, Richard J., 1954- . II. MacIntosh, Jeffrey G.
HC79.H53C656 1999
338.4'762-dc21 98–26660
CIP
ISBN 0-203-97605-3 Master e-book ISBN
ISBN 0-415-17854-1 (hbk)
CONTENTS
List of figures and tables ix
List of contributors x
Preface xi
Introduction 1
PART I Competition as cooperation: policy perspective 10
1 High-technology industrial policy in Canada: the future 11
of an illusion or an illusion of the future
ROBERT HOWSE
2 The role of cooperative industrial policy in Canada and 28
Ontario
DAVID A.WOLFE
3 Commentary 60
MICHAEL J.TREBILCOCK
PART II Tax policy and technology development 66
4 Tax incentives and comparative advantage 67
PAUL HALPERN AND JACK MINTZ
5 Evaluating R&D income tax incentives: some lessons 86
from the Australian experience
GORDON J.LENJOSEK
PART III Bank financing of technology development: lending to small 107
to mid-sized enterprises
6 The banks and innovative enterprise: opportunities and 108
constraints
JEFFREY G.MACINTOSH
7 The role of banks in the financing of knowledge-based 146
SMEs
PAUL A.TORIEL
viii
8 Commentary 161
LARRY WYNANT
PART IV Competition as cooperation: law and economics perspective 166
of cooperative industrial policy
9 Competition policy and cooperative innovation 167
DONALD G.MCFETRIDGE
10 Competition as cooperation: SEMATECH, Inc. and the 187
case for competitive industrial policy
RICHARD J.BRAUDO
11 Commentary 229
DEREK IRELAND
Index 233
LIST OF FIGURES AND TABLES
FIGURES
5.1 A comparison of R&D tax incentives in the G-7 and Australia 102
9.1 Sequential process innovations 174
TABLES
4.1 Marginal effective tax rates 69
4.2 Average annual change in employment by sector, 1970–93 72
4.3 Average annual increase in GDP and change in share of total GDP 73
at factor cost by industry
4.4 Average annual change in exports by sector, 1977–93 74
4.5 Changes in Canada’s Revealed Comparative Advantage in goods by 75
sector, 1970–92
4.6 Summary of METR and various measures of sector importance 76
5.1 Federal SR&ED tax credit and refundability rates 100
5.2 Summary of provincial R&D tax incentives 101
7.1 Size and scope of the New Economy 147
