Abstract

In a fragmented and interdependent global production system, firms specialize in a limited set of differentiated outputs and restrict the perimeter of the technologies used. Operating on a narrow technological basis makes it difficult for firms to react and adapt to a supply crisis. The efficiency achieved through the division of labor in many cases represents a constraint of rigidity to change. Industrial policy measures aimed at widening the range of internalized knowledge and technologies (technological reserves) would help companies acquire the necessary flexibility to respond to recurrent supply and demand gaps and at the same time increase the range of technologies in use and encourage product innovation.