Innovation diffusion in the Portuguese and Italian clothing industry.
In this thesis a model to describe the diffusion of a cluster of inter-related innovations is
put forward. Unlike conventional diffusion approaches, which deal with each innovation
independently, this model is based on a system of "aggregated measures of diffusion"
(AMDs). Such AMDs assume a common technological base and a learning sequence in
adoption, and they are derived from a system of double weighting, with scores attached
for a) the complexity of each innovation and b) the time-span since adoption. In addition
to diffusion measurement, AMDs can be used to assess technological capability of
individual firms, industries, regions or countries. In this role they can replace
conventional technology measures, particularly when the object of analysis are
"traditional industries" or "catching up regions". In the present application, the diffusion
of nine innovations available for use in the clothing industry was tracked. Alternative
weighting schemes generated different AMDs, successively taken as the dependent
variable in a multiple regression exercise. The variables entered into the model matched
broadly the conceptual framework, with proxies of technological competence ("qualified
technicians" or "intangible investment") and firm size ("sales" or "employment")
displaying greater association with the AMDs. Interestingly, the dummy "country" was
not selected as significant. This is in line with previous findings in the thesis, which
showed an average initial lag between Portuguese and Italian firms of 4 years, narrowing
to 2.5 years as diffusion proceeds. These results suggest that the productivity gap (2.6: I)
derives mostly from factors other than differences in the adoption of recent hardware.
Future policies to narrow this gap could better consider how to improve the handling of
existing hardware (training, skills) and other intangible factors (design, quality,
marketing and distribution), than concentrating exclusively on fixed capital formation. If
these intangible factors are addressed by public policy, it is possible to believe that the
Portuguese clothing industry will have an opportunity to survive and prosper. With
regard to Italy, there are signs that some of the traditional factors of competitiveness
have suffered recently a process of erosion. With the expected phasing out of the MultiFibre
Arrangement, Italian tirms must concentrate further in up-market niches and
relocate part of their assembling operations to lower cost regions abroad. The possibility
of radical technological change reversing dramatically this industry'S pattern of
comparative advantage is not a realistic prospect in the short/medium-term. However.
the likelihood of full automation in a longer-term remains, and it is possible to expect
that those firms which have gone further in adopting certain LT.-related innovations will
have a decisive advantage early next century.