Technological Gap - Definition And Theories

Societies and economies will differ in many ways. One of them is the degree of technological development, and the extent to which an economy is technologically lagging behind is called the technological gap in economics.

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Definition

A technological gap of lagging size, permanently damaged between the levels of technical and technological potential of two or more national economies. Its formation and size are the result of two reasons: the creation of a special technological technology by leaders - innovators (gap formation or growth) and the diffusion of innovations and their absorption by imitators (closing the gap).

Technological gap theories

Formally, the technical and technological gap was already described in the 1960s in the research works of M. V. Posner (1961) and R. Vernon (1966).

Posner's theory is based on the assumption that innovation is the source of the technical and technological gap from which a monopolist (e.g. the economy of a given country, sector, enterprise) derives economic benefits, and that subsequent imitation by competitors reduces profits and the resulting "temporary "competitive advantage. While innovation and monopoly lead to market imbalance, imitation restores it.

According to this theory, the structure of international trade is determined by the ability of individual countries, i.e. people, enterprises, industries and entire branches of the economy, to develop, master and implement new technologies.

Innovative countries (innovators) can achieve a monopolistic position in a specific market segment. This position allows them to develop the export of modern and highly processed products. Countries with a lower innovative capacity export products with a lower contribution to technical and technological progress. Over time, imitators appear, the country loses its monopolistic position, but the imitators no longer achieve such benefits as the innovator, because there are many imitators, the competition between them is price-based, and the demand for the "marked" product shows little dynamics. usually cheaper than the innovator, because they have little or no research and development expenditure, cheaper, often not the latest technology, and finally they start selling a given product also on the innovator's market The innovative country loses technological benefits, and its position depends on the ability to meet the requirements of the technology by introducing further innovations.

R. Vernon based the model of the technical and technological gap theory on the product life cycle, which consists of the following stages:

1. The "new product" phase - innovations are created in developed, high-income economies to meet domestic demand. Innovative enterprise - the innovator obtains a monopolistic advantage and high profits.
2. The phase of "full product maturity" - when demand increases, the product becomes standard and the company achieves economies of scale. At the same time, there is a dynamic increase in exports, as a result of which the product goes to foreign markets. High entry barriers to the market give a competitive advantage.
3. The phase of "product standardization" - the emergence of imitator companies gradually weakens the innovator's advantage, production is located in countries with the lowest labor costs, the market advantage is maintained by introducing product differentiation.

Vernon's theory therefore implies that countries with a technological advantage are able to create new products, and technologically lagging countries focus on mature or standard products.

Factors affecting the level of the technological gap

The most important factors that affect the level of the technological gap are:

• social climate,
• educational system,
• scientific potential,
• scale and quality of research activity,
• the nature of the local market,
• quality of management and government policy,
• other factors determining the technological position of a given country.

Measurement of the technological gap

Indicators used to measure the size and dynamics of the technological gap:

• Labor productivity measured as GDP/employee,
• export structure,
• Terms of trade indicator.

Source: Barańska-Fischer M., Blażak R., Szymański G., (2016) Innowacje w biznesie. Wybrane zagadnieni, Kornacka D., (2001). Koncepcje luki technologicznej w teorii międzynarodowego transferu technologii