Abstract

The twin globalization of both product and capital markets and the rapid entry of newly industrializing countries has undermined the viability of the specialization of advanced countries traditionally based on capital intensive manufacturing industries. Advanced countries have been facing, since the last decades of the XX century, a radical transformation of their economic system with the twin decline of the manufacturing industry and the growth of the knowledge intensive business services. Their new specialization is now based upon the generation and systematic use of technological knowledge as both an input and an output. Technological knowledge is a highly rooted production factor, fully embedded in the institutional and economic structure of advanced countries. As such it has low levels of mobility that provide a sustainable competitive advantage. The transition from an industrial to a knowledge economy is a painful process that takes time. A time span that is longer, the larger is the ratio between the rate of exit of firms from the manufacturing industry and their rate of growth and entry into the new knowledge intensive business services. Dedicated policies to support the creation and growth of a knowledge economy are strictly necessary to make the transition shorter. In this context the selective direction of public research activities, including the academic ones, towards the generation of scientific and technological knowledge with a direct scope of application to economic activities is all the more necessary in a country, like Italy, where the role of public research activities is prominent.