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Preface B. Carlsson. 1. Introduction B. Carlsson. 2. On the Nature, Function and Composition of Technological Systems B. Carlsson, R. Stankiewicz. 3. The Nature and Importance of Economic Competence B. Carlsson, G. Eliason. 4. Mapping an Evolving Technology Cluster: The Composition and Structure of Factory Automation A. Granberg. 5. The Academic Infrastructure of Factory Automation A. Granberg. 6. The Role of the Science and Technology Infrastructure in the Development and Diffusion of Industrial Automation in Sweden R. Stankiewicz. 7. Sourcing of Advanced Manufacturing Technology: The Role of Customer-Supplier Interaction K. Tryggestad. 8. What Makes the Automation Industry Strategic? B. Carlsson, S. Jacobsson. 9. A Theoretical Framework for the Analysis of Supplier Industries E. Ehrnberg, S. Jacobsson. 10. Technology Discontinuities and Company Strategies - Machine Tools and Flexible Manufacturing Systems E. Ehrnberg, S. Jacobsson. 11. Diffusion and Industrial Dynamics in the Robot Industry K. Dahlin. 12. The Importance of Economic Competence in Economic Growth: A Micro-to-Macro Analysis B. Carlsson, E. Taymaz. 13. The Economic Impact of Factory Automation B. Carlsson, E. Taymaz, K. Tryggestad. 14. Factory Automation and Government Policy B. Carlsson, S. Jacobsson. 15. The Technological System for Factory Automation: An International Comparison B. Carlsson. Author Index. Subject Index.

Having studied the technological system for factory automation in Sweden in the preceding chapters, we will now try to summarize what we have learned and also discuss the role of government policy, both actual and potential.

Among the reasons for studying the technological system for factory automation were the strong position of Sweden in all of the technologies which make up factory automation and the pervasive nature of these technologies in terms of their diffusion among a broad set of industries. But while it is often assumed that there is a strongly positive impact of automation on economic performance, there is little conclusive empirical evidence. A recent search of articles on automation yielded the result that there was only a handful of articles on the subject in economics journals during the period 1985–91 (—the few that were found dealt mostly with diffusion and labor issues), while there have been numerous articles published in business, management, and engineering journals. The majority of these articles deal with the problem of quantifying the benefits of, and therefore justifying investment in, automation technology at the level of the firm.

It is often asserted that the machine tool industry, and more broadly, the automation industry,1 is a strategic industry (see Rosenberg 1963, for a historical analysis of the U.S. machine tool industry and Jones 1983, for the present U.K. machine tool industry). More specifically, it is argued that an advanced local automation industry can be conducive to a rapid diffusion of new technology in the engineering industry and, by implication, a positive development of the competitive strength of the engineering industry. Thus, as Jones points out, …the structure and competitiveness of the machine tool industry is very directly related to that of the engineering sector as a whole. Despite the growing degree of intra-industry trade and international specialization, there is still a strong link between a healthy domestic machine tool industry and a competitive engineering industry … countries which are An earlier version of this chapter was published in Economics of Innovation and New Technology, 1 (4), 1991, pp. 257-269.With automation industry we mean the industry which supplies automatic production equipment to the engineering industry. Of course, there exists an industry which supplies such equipment to the process industry as well.dependent on importing the most advanced machine tools experience a certain delay in the diffusion of the latest machining technology (Jones 1983, p. 1).

Having analyzed the technological system supporting factory automation in Sweden in the preceding chapters, we turn now to a summary of our findings and an international comparison. Several dimensions of the technological system have been identified which are particularly important in factory automation. Our continued research on other technological systems will undoubtedly yield further insight as to whether the same factors are at work in other systems as well. The dimensions we have identified may be grouped under three broad headings, namely (1) the competence of various agents within the system, particularly buyers and suppliers, (2) the clustering of resources in the form of networks and/or development blocs which hold the whole system together, and (3) the institutional infrastructure, particularly in the areas of education, finance, and the role of government.

Throughout the twentieth century there has been a general movement towards larger minimal optimum plant size. Sands (1961) found that average physical output per plant increased between 1904 and 1947 by about 3 percent per annum. Blair (1972) found the share of industry sales originating in the eight largest plants declined from 1947 to 1958 thereby concluding that this seeming reversal of past trends was attributable to fundamental changes in the direction of technological advances away from centralizing innovations and towards decentralizing technologies.1 Shepherd (1982) found a substantial increase in the scope of competition within the four-digit Standard Industrial Classification (SIC) industries between 1958 and 1980 confirming the trend identified by Blair. Also, Carlsson (1989a) showed that both firm and plant size decreased between 1972 and 1982 in manufacturing as a whole and especially in metalworking industries in several industrial countries. He hypothesized that the emergence of new computer-based technology has improved the quality and productivity of small and medium scale production relative to standardized mass-production techniques which dominated previously. According to Piore and Sable (1984) the emergence of this new technology represents, in fact, an “industrial divide” where firms and society are confronted with a choice of technological modes.2

In 1975, the United States was the world’s largest producer of machine tools, the second largest exporter, and had the lowest degree of dependence on imports of all major machine tool producing countries. By 1987, the U.S. had slipped into fourth place as producer of machine tools (behind Japan, F.R.G., and the USSR), into sixth place in exports (behind Switzerland, G.D.R., and Italy), and relied on imports for more than half of its supply of machine tools.

What are the causes of industrial development and economic growth? What are the linkages between these processes and their micro foundations? What is the framework within which we can best answer these questions and understand the ongoing transformation and restructuring of world industry? These are the basic questions which motivated the conference upon which this volume is based.

As the steel industry in Western Europe faces the 80’s, it is trying to recover from its most difficult decade since the Second World War. Crude steel production in the European Common Market (EEC 9) was barely larger in 1979 than in 1970. Non-European competitors threatened European steel producers in all their markets, both at home and abroad. Capacity utilization in the steel industry in the EEC in 1977 was only around 60%.

The results from the experimental testing of a latent heat storage unit containing calcium chloride hexahydrate are presented. Thermal performance data are evaluated from the experimental results by the aid of a quasi-stationary heat transport model and the procedure employed seems well suited both for the rating and for the optimization of latent heat storage units.