Eliasson Advanced Public Procurement as Industrial Policy

The Aircraft Industry as a Technical University
1. Auflage 2010
ISBN: 978-1-4419-5849-5
Verlag: Springer
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, Band 34, 312 Seiten

Reihe: Economics of Science, Technology and Innovation

This study is about the macroeconomic effects of positive externalities or industrial spillovers around advanced production. The case explored is the 'technology di- dend' around Swedish aircraft industry, and in particular around the aircraft ma- facturer Saab, and the major industrial project of the JAS 39 Gripen multirole combat aircraft. The project is partly an updating of my book (in Swedish) Technology 1 Generator or a National Presige Project from 1995, but extends the analysis in s- eral directions. The study includes a chapter on spillovers from advanced production in an industrially developing economy, South Africa, that has acquired the JAS 39 Gripen for its Air Force. There is also a chapter in which the results for Sweden are discussed in the wider context of advanced public procurement in Europe. The text has been organized such that the main chapters have been written for academic readers. Two supplements include the technical details of data collection, mathematical models, and calculation methods. The first chapter is brief and focused on the results. It has the character of an extended executive summary. The second chapter summarizes the entire story; problems, results, and methods. This project would not have been possible without the generous support of a number of people. First of all great thanks go to all those people with crowded calendars in Swedish industrial firms that have set aside time to respond to my questions. Most of them have been listed at the end of the book.

Gunnar Eliasson is professor em of Industrial Economics/Dynamics at the Royal Institute of Technology (KTH) in Stockholm . He is an associate senior researcher at the Ratio Institute in Stockholm. He was previously president of the Industrial Institute for Economic and Social Research (IUI) in Stockholm and before that Chief Economist and Director of the Economic Policy Department at the Federation of Swedish Industries. From 1994 to 1996 he was the President of the International Joseph A. Schumpeter Society. He is the father of the Swedish micro to macro simulation model MOSES and the theory of the Experimentally Organized Economy and of Competence Blocs. He has published many books and many journal articles in the fields of industrial economics, the theory of the firm, business economic planning and management, labor and education economics and simulation modeling. Among the books can be mentioned Business Economic Planning (1976), Technological Competition and Trade in the Experimentally Organized Economy (1987), The Knowledge Based Information Economy (1990) , Firm Objectives, Controls and Organization (1996) and The Birth, the Life and the Death of Firms (2005). Together with his wife Ulla he has authored a study on the 15th century art markets in Northern Italy and Florence (1997). Gunnar Eliasson´s current research is focused on the economics of the firm and management, technology, entrepreneurship and economic development and on the competence demands on the labor markets of the New Economy.

Autoren/Hrsg.

Eliasson, Gunnar

Inhaltsverzeichnis

1;Preface;6
2;Contents;8
3;About the Author;15
4;List of Interviews;18
4.1;IG JAS Group;19
4.1.1;Saab Group;19
4.1.2;Ericsson;19
4.1.3;Volvo Aero Corporation (VAC);20
4.2;Other;20
4.2.1;Applied Composites AB (Acab), Linköping;20
4.2.2;Autoliv;20
4.2.3;Bodycote (from 2009 Exova), Karlskoga;20
4.2.4;Combitech AB;20
4.2.5;Dassault Aviation;21
4.2.6;FMV;21
4.2.7;Modig Machine Tool, Virserum;21
4.2.8;SEB, Stockholm;21
4.3;South Africa (Interviews in 2000 and 2008, Two Visits Each Year);21
4.3.1;Avitronics (Pty), Centurion (2000);22
4.3.2;CSIR, Pretoria (2000);22
4.3.3;Denel Aviation (2000);22
4.3.4;Marieholm Industry AB (MIAB), Sandton (2000);22
4.3.5;Scania South Africa, Mondeon (2000);22
5;List of Cases;23
6;Chapter 1;25
6.1;On the Cloud of Technology that Surrounds Advanced Production: A Summary of Results;25
6.1.1;1.1 The Spillover Multiplier;25
6.1.2;1.2 Twelve Conclusions on How to Overcome the Underinvestment in Private R&D AmongAdvanced Industrial Economies;26
6.1.3;1.3 Joint Production and Joint Customership;29
6.1.4;1.4 The Questions Raised;30
6.1.5;1.5 The Nature of Spillovers;32
6.1.6;1.6 Social Value Creation: The Magnitudes Involved;33
6.1.7;1.7 Competition Between Alternatives;36
6.1.8;1.8 Competitive Bidding and Competition Policy;38
6.1.9;1.9 The Contents of the Spillover Cloud;40
6.1.10;1.10 The Advanced Industrial Environment;41
6.1.11;1.11 Policy Implications;42
6.1.12;1.12 Complete Competence Blocs are Spillover Generators and Advanced Learning Environments;44
6.1.13;1.13 Macroeconomic Growth;45
6.1.14;1.14 Notes;46
7;Chapter 2;49
7.1;The Art of Defining, Pricing, and Marketing Advanced Multidimensional Products that Spill Technology;49
7.1.1;2.1 The Pricing of Complex and Multidimensional Systems Products;52
7.1.2;2.2 The Joint Manufacturing of Products and Intangible Spillovers;56
7.1.3;2.3 The Economic Nature of Intangible Spillovers;58
7.1.3.1;2.3.1 The Existence, Magnitude, and Economic Value of Spillovers;59
7.1.3.2;2.3.2 Receiver Competence;61
7.1.3.3;2.3.3 Diffusion Channels;63
7.1.3.4;2.3.4 Accessing the Global Pool of Technology;65
7.1.4;2.4 Competence Bloc Theory and the Critical Role of the Advanced Customer;66
7.1.4.1;2.4.1 Customer Competence Contributions;67
7.1.4.2;2.4.2 Technology Supply;68
7.1.4.3;2.4.3 Commercialization;68
7.1.4.4;2.4.4 The Allocation of Tacit Knowledge and the Limits of a Firm;70
7.1.4.5;2.4.5 Critical Mass;72
7.1.4.6;2.4.6 Going from Micro to Macro (Aggregation);73
7.1.5;2.5 Aircraft Industry as a Spillover Source: A Preview of the Industry Case;74
7.1.6;2.6 Boosting Receiver Competence Through Policy;77
7.1.6.1;2.6.1 Capturing the Rents from Spillovers: Joint Customership and Industrial Participation Programs as a Joint Policy and Bus;78
7.1.6.2;2.6.2 Summarizing on Joint Production and Joint Customership as a Policy Opportunity;79
7.1.7;2.7 Notes;80
8;Chapter 3;84
8.1;Spillovers and Innovative Technology Supply: A Literature Survey;84
8.1.1;3.1 The Existence and Magnitudes of Spillovers: A Brief Background on Economic Theory;85
8.1.1.1;3.1.1 Austrian/Schumpeterian Micro- to Macrodynamics and the Long-Term Sustainability of Spillovers and Growth;85
8.1.1.2;3.1.2 Long-Term Sustainable Productivity Growth is a Matter of Resource Reallocation, Not of Raising Employment;87
8.1.2;3.2 Intangible Spillovers and Economic Growth;88
8.1.2.1;3.2.1 Technology Creation and Productivity Growth;89
8.1.2.2;3.2.2 The Mysterious Technology Residual;89
8.1.3;3.3 The Macroeconomic Effects of Spillovers;91
8.1.3.1;3.3.1 Salter Curve Analysis;92
8.1.3.2;3.3.2 Dynamic Simulation;95
8.1.3.3;3.3.3 Commercialization;98
8.1.4;3.4 Notes;100
9;Chapter 4;102
9.1;Capturing the Direct and the Serendipitous Spillovers: The Case of Sweden’s Military Aircraft Industry;102
9.1.1;4.1 A Brief History of Saab;102
9.1.2;4.2 The Saab Group Strategically Reorganizing for a Different Future;106
9.1.2.1;4.2.1 A Business Organization in Constant Transition;107
9.1.2.2;4.2.2 Military Aircraft Technology is the Platform for Future Industrial Development of Saab;108
9.1.3;4.3 The Cloud of Spillovers;109
9.1.3.1;4.3.1 Core Technologies (Aircraft and Engines);109
9.1.3.1.1;4.3.1.1 The Aircraft/The Core Product;109
9.1.3.1.2;4.3.1.2 Case 1: Civilian Aircraft;111
9.1.3.1.3;4.3.1.3 Case 2: Aircraft Engines and Commercial Gas Turbines: Core Technologies;113
9.1.3.2;4.3.2 Related Technologies;115
9.1.3.2.1;4.3.2.1 Case 3: The Early Innovation Market Around Saab;115
9.1.3.2.2;4.3.2.2 Case 4: Secondary-Related Industrial Spillovers from the Development and Modification of Aircraft Engines;117
9.1.3.2.2.1;Engine Services;117
9.1.3.3;4.3.3 Engineering General;118
9.1.3.3.1;4.3.3.1 Case 5: Secondary Spillovers: Hydraulic Engines;118
9.1.3.3.1.1;Automotive Heaters;118
9.1.3.3.1.2;Diesel Engines;119
9.1.3.3.1.3;Turbo Chargers and Other Civilian Spillovers;119
9.1.3.3.2;4.3.3.2 Case 6: Integrated Production, Lifelong Product Support and Maintenance-Free Products;119
9.1.3.4;4.3.4 Industry General and Serendipitous Discovery;120
9.1.3.5;4.3.5 Creating a Critical Mass Aircraft Industry Competence Bloc Rich in Spillovers (Case 7);121
9.1.4;4.4 Digital Mobile Telephony: A Swedish World Success with a Military Origin18 (Case 8);122
9.1.4.1;4.4.1 The Origin of Nordic Mobile Telephony: How the Advanced Public Customer Initiates a New Swedish Industry;124
9.1.4.2;4.4.2 The Emergence of Digital Mobile Telephony as a Swedish World Success;125
9.1.4.3;4.4.3 The Critical Technology Elements of the Early Digital Mobile Telephone System;127
9.1.4.4;4.4.4 Advanced Consumer Electronics;130
9.1.4.5;4.4.5 One Technology Wave After Another: Nobody Is Safe;131
9.1.4.6;4.4.6 A Number of Civilian Opportunities and Challenges;135
9.1.4.7;4.4.7 Summing Up;135
9.1.5;4.5 Secondary Spillovers: Ericsson HP Telecom and Telecom Monitoring and Control Systems (Industry General, Case 9);137
9.1.6;4.6 The Emergence and Disappearance of a Swedish Computer Industry (Industry General, Case 10);139
9.1.7;4.7 The Business Information Systems Venture of Ericsson (EIS, Case 11);140
9.1.8;4.8 Medical Technology Spillovers (Sectra): A Creative Entrepreneurial Environment (Case 12);143
9.1.9;4.9 Notes;144
10;Chapter 5;148
10.1;Looking into the Future on JAS Gripen Spillovers;148
10.1.1;5.1 Spillover Areas: A Brief Survey;150
10.1.2;5.2 The Erieye Surveillance System, Electrically Directed Antennae and the Minilink: The Development of an Early Networked De;154
10.1.2.1;5.2.1 Erieye Surveillance Technology;155
10.1.2.2;5.2.2 Antennae;156
10.1.2.3;5.2.3 The MiniLink;156
10.1.2.4;5.2.4 A Networked Defense Enhances Spillover Intensity;158
10.1.3;5.3 Distributed and Integrated Production as a Generic Engineering Organizational Technology: The Art of Systems Integration;158
10.1.3.1;5.3.1 The Nature of Complex Products;159
10.1.3.2;5.3.2 Integrated Production;161
10.1.3.3;5.3.3 Systems Effects in Integrated Production;162
10.1.3.4;5.3.4 Systems Integration: An Illustration;163
10.1.4;5.4 Safety-Critical Software Engineering (Case 15);164
10.1.5;5.5 Manufacturing Lightweight Technology (Case 16);166
10.1.5.1;5.5.1 Lightweight Aircraft Structures: Saab and Gripen;166
10.1.5.1.1;5.5.1.1 Case: Modig Machine Tools in Virserum;168
10.1.5.2;5.5.2 Lightweight Engine Designs: Volvo Aero Corporation;169
10.1.5.3;5.5.3 Welding Simulation;171
10.1.5.3.1;5.5.3.1 Case: Applied Composites AB (ACAB);172
10.1.6;5.6 Automobile Safety Systems as a Swedish Export Product;173
10.1.6.1;5.6.1 Case 17: The Swedish Automotive Safety Industry and Autoliv;174
10.1.7;5.7 Maximizing Functional Flexibility and Minimum Life Cycle Maintenance and Service Costs (Case 18);176
10.1.7.1;5.7.1 Product Design and Functional Flexibility;177
10.1.7.2;5.7.2 Maintenance-Free Products;177
10.1.7.3;5.7.3 Real Options Pricing of Flexibility;179
10.1.7.4;5.7.4 Lifetime Product Support;179
10.1.7.5;5.7.5 Product Life Management;180
10.1.8;5.8 Additional Product and Technology Areas the Origin of Which Can Be Traced to JAS 39 Gripen;180
10.1.8.1;5.8.1 Space Research and Exploration (Case 19);181
10.1.8.2;5.8.2 Virtual and Secure Online Design: Encryption/Security (Case 20);181
10.1.8.3;5.8.3 Civil Security (Case 21);182
10.1.8.4;5.8.4 Unmanned Aircraft and Future Air Transport (Case 22);183
10.1.9;5.9 The Development of a Specialist Consulting and Subcontracting Industry: Competence Bloc Formation;184
10.1.9.1;5.9.1 Advanced Subcontractors as a National Competitive Advantage;184
10.1.9.2;5.9.2 Engineering Consulting Bridges the Gap Between Technology Creation and Technology Adoption;186
10.1.9.2.1;5.9.2.1 Case 23: Engineering Consultancy (Combitech AB);186
10.1.9.3;5.9.3 Industrial Competence Bloc Formation in Linköping(Case 24);187
10.1.9.4;5.9.4 The Subcontracting Contract;189
10.1.9.5;5.9.5 Risk Sharing Among Contractors;190
10.1.10;5.10 What Did Not Happen;191
10.1.10.1;5.10.1 Spillover Opportunities Missed (Case 25);191
10.1.10.1.1;5.10.1.1 Example 1: Landing Gear;192
10.1.10.1.2;5.10.1.2 Example 2: Rescue System;192
10.1.10.1.3;5.10.1.3 Example 3: Environment Control System;193
10.1.10.1.4;5.10.1.4 Example 4: The Auxiliary Power Unit;193
10.1.10.2;5.10.2 The Large Part of Gripen Spillovers Has Been Captured by the Large Partners in the IG JAS Industry Group;194
10.1.11;5.11 Notes;195
11;Chapter 6;197
11.1;Saab in South Africa: Technology Transfer to an Industrializing Economy;197
11.1.1;6.1 The South African Opportunity;199
11.1.2;6.2 The Downsizing of the South African Arms Industry;202
11.1.2.1;6.2.1 Armscor;202
11.1.2.2;6.2.2 Denel;203
11.1.2.3;6.2.3 Saab Denel Aerostructures;203
11.1.3;6.3 The Nature of the Product and of Spillovers7;204
11.1.4;6.4 Gripen in South Africa: Facts;206
11.1.4.1;6.4.1 The Gripen Purchase: Technical Background;207
11.1.4.2;6.4.2 Volvo Aero Corporation in South Africa;208
11.1.4.3;6.4.3 The Organization of Technology Transfers;209
11.1.4.4;6.4.4 Subcontracting in South Africa;211
11.1.5;6.5 South African Receiver Industry;212
11.1.5.1;6.5.1 A Dual Economy Isolated from Industrial Neighbors;213
11.1.5.2;6.5.2 Participating in Global Production and Marketing Networks;214
11.1.5.3;6.5.3 Management Competence;215
11.1.5.4;6.5.4 Attractive Technologies;217
11.1.6;6.6 New Firm Formation;218
11.1.7;6.7 Competence Blocs, Lack of Commercial Attitudes, and Venture Capital Insufficiency;219
11.1.7.1;6.7.1 Case 26: TMI Dynamatics;220
11.1.8;6.8 Labor Quality Supply;221
11.1.8.1;6.8.1 Case 27: The Saab Industrial School project in South Africa;223
11.1.9;6.9 Political Uncertainty High;224
11.1.10;6.10 Conclusions;225
11.1.11;6.11 Notes;226
12;Chapter 7;228
12.1;The European Policy Perspective;228
12.1.1;7.1 The Future Dependence of Western Industrial Economies on their Engineering Industries;229
12.1.2;7.2 The European Concerns;231
12.1.3;7.3 Facilitation Rather Than Directed Procurement Becomes Important;232
12.1.4;7.4 Dassault Aviation, France;233
12.1.5;7.5 What Should Europe Do?;233
12.1.6;7.6 Notes;235
13;Chapter 8;236
13.1;Private and Social Spillover Benefits from Advanced Procurement: Defining and Estimating the Spillover Multiplier;236
13.1.1;8.1 How to Capture Spillover Rents Privately and for Society;236
13.1.1.1;8.1.1 Innovative Pricing;236
13.1.1.2;8.1.2 On the Principles and Practices of Offset Trade Requirements;238
13.1.2;8.2 Estimating the Spillover Multiplier;239
13.1.2.1;8.2.1 Beware of Calculation Biases Based on Oversimplification;239
13.1.2.2;8.2.2 Defining the Spillover Multiplier of the JAS 39 Gripen Development Investment;241
13.1.2.3;8.2.3 Estimating (Approximating) the Spillover Multiplier from the Microlevel and Up;242
13.1.2.3.1;8.2.3.1 Procedure;242
13.1.2.3.1.1;Size of R&D Investment;242
13.1.2.3.1.2;Magnitude of Social Value Creation (Identifying Spillover-Receiving Firms);242
13.1.2.3.1.3;Opportunity Costs;242
13.1.2.3.2;8.2.3.2 Comments;243
13.1.3;8.3 How to Turn Potential Rates of Return into Actual Rates of Return;247
13.1.3.1;8.3.1 The Policy Issue;247
13.1.3.2;8.3.2 The Art of Rent Seeking;247
13.1.3.3;8.3.3 The Art of Innovation Policy;248
13.1.4;8.4 Incentive Contracts;249
13.1.5;8.5 Notes;251
14;Chapter 9;254
14.1;Advanced Purchasing as Industrial Policy: On the Advanced Firm as a Technical University;254
14.1.1;9.1 Public Goods as Infrastructure;254
14.1.1.1;9.1.1 Market or Public Failure to Satisfy a Private Demand?;255
14.1.1.2;9.1.2 R&D Investment as Infrastructure: The Underinvestment Proposition;256
14.1.1.3;9.1.3 Technology Policy;256
14.1.1.4;9.1.4 Public Procurement as Industrial Policy: The Role of the Competent Customer;257
14.1.1.5;9.1.5 Are There Any Other Advanced Public Procurement Objects?;259
14.1.2;9.2 The Public Purchasing Contract: A New Demand Policy;260
14.1.3;9.3 Aircraft Industry Already Today Uses the Technologies of Future Engineering Industry;261
14.1.3.1;9.3.1 The Large Firms Dominate as Spillover Receivers;261
14.1.3.2;9.3.2 The Opportunity Cost May Be Negative;263
14.1.3.3;9.3.3 Marketing the Cloud: Saab as an Agent of Democracy;264
14.1.4;9.4 The Advanced Firm as a Technical University;265
14.1.5;9.5 Notes;266
15;Technical Supplements;267
15.1;S1 The IG JAS Investment;267
15.1.1;S1.1 The Procurement of the JAS 39 Gripen Aircraft with Swing-Role Capabilities;267
15.1.2;S1.2 Swedish Military Aircraft Procurement History;269
15.1.3;S1.3 The JAS 39 Gripen Concept;270
15.1.4;S1.4 The Industry Group JAS;271
15.1.5;S1.5 Weapons and Communications System;271
15.1.6;S1.6 The New IG JAS Procurement Method;272
15.1.7;S1.7 Subsystems Categories Outsourced to Non-Saab Subcontractors;274
15.1.8;S1.8 The JAS 39 Gripen Procurement Sequence;275
15.1.9;S1.9 The JAS 39 Gripen Investment Budget;276
15.2;S2 Estimating the JAS 39 Gripen Macroeconomic Spillover Multiplier: Going from Micro to Macro;277
15.2.1;S2.1 The Different Estimation Methods;277
15.2.2;S2.2 Method 1: Identifying and Aggregating Over the 45 Spillover-Receiving Firms;282
15.2.2.1;S2.2.1 Calculation Method;283
15.2.2.2;S2.2.2 Identifying the Origin of Spillovers;284
15.2.2.3;S2.2.3 On the Net Value Calculation Aggregated from Cases;288
15.2.3;S2.3 Method 2 (Indirect): Econometrically Determined Social and Private Rates of Return;289
15.2.4;S2.4 Method 3: Micro-to-Macro Simulation;291
15.2.5;S2.5 The Value of JAS 39 Gripen Spillovers: Analysis, Evaluation, and Discussion;292
15.2.6;S2.6 Summing Up;298
15.3;S3 A Future Research Agenda: The Advanced Firm as a Technical University;299
15.3.1;S3.1 The Double Customer Role of Government;300
15.3.2;S3.2 The European Dimension;301
15.3.3;S3.3 Suggested Continuation of the Project;302
15.3.4;S3.4 The Spillover Multiplier;302
15.3.5;S3.5 The Future Role of the Old Engineering Industry in the New Economy;303
15.3.6;S3.6 Overcoming the Underinvestment;304
15.3.7;S3.7 Advanced Firms and Technical Universities Competing for Public Resources;304
15.3.8;S3.8 The Optimal Public Procurement Area;305
16;Glossary;308
17;Bibliography;314
18;Index;326