Embodied knowledge and sectoral linkages: An input-output approach to the interaction of high- and low-tech industries

This paper considers the measurement of the direct and indirect flows of knowledge between different technology-intensive industries in France, Germany, Norway, Sweden, and the United States. Using the OECD Input-Output database and the ANBERD database, we show that product-embodied knowledge accounts for about half of total technology use, on average, but with a substantial variation between industries. We then develop a general two-sector linkage measure that allows us to examine the interaction between predominantly technology producing industries (generally high-tech) and predominantly technology using industries (generally low-tech). This study shows that the medium-high and medium-low tech industries, identified as specialized-supplier and scale-intensive industries, including knowledge-intensive business services (KIBS), are essential for the production, diffusion and use of technology, and hence for economic growth.