Technology Dependence Taxonomy

Abstract

After proposing the model’s algorithm and analyzing a number of results for the technology index (TI) in different sectors and countries and along a full economic cycle, it is now possible to propose a specific taxonomy for the technology dependence of firms and sectors. This chapter starts by showing the current difficulties and possible misinterpretations of the OECD technology intensity factor currently in global use. Based on statistically analyzed data, it is here proposed a metric to be the basis of a new taxonomy for technology dependence. That metric is to be applied to the TI of the KTC model. It will use the same levels of low, medium low, medium high, and high technology dependence, according to the four quartiles the TI values distribution suggests. This new taxonomy will be equally significant in different countries, what does not happen with the OECD current system. This chapter follows Fernandes [1]. Besides the technology content of any GVA process, the KTC model allows to compute the technology content of an output product (as well as its knowledge and capital contents). This is explained and illustrated in the second part of this chapter.