TRANSFERRING TECHNICAL KNOWLEDGE AND INNOVATING IN EUROPE, c.1200-c.1800

 

STEPHAN R. EPSTEIN

BACKGROUND

• The ‘Great Divergence’ (Pomeranz 2000)

• The ‘Industrial Enlightenment’ (Mokyr 2002)

• The 1st Industrial Revolution as a technological revolution

FIVE STYLIZED FACTS

1. The institutional context of technological innovation in 18th c. Europe was not significantly different from that in 13th c. Europe.

2. Europe c.1200 was a technological backwater by comparison with China, India. By 1800, Europe had forged ahead. Catching up was the result of small-scale, cumulative innovation.

3. The main source of human capital formation was the craft guild. European guilds were non-ascriptive: entry and exit were cheap.

4. The knowledge of premodern technicians was experiential and largely tacit technological diffusion and progress through recombination required high levels of labour mobility.

5. Technological progress in Europe withstood local shocks better than in China, because skilled technicians could migrate.

HUMAN CAPITAL FORMATION

• EIC: Craft guilds emerged during the 11th/12th c.s for welfare, training etc. purposes

Overcome training externalities by banning poaching and monitoring master / apprentice relations

Share ‘collective knowledge’, including ‘collective invention’

Survive to the late 18th / 19th c.s as main (though not sole) institution for skills transfer

Figure 1. Established craft guilds, Italy and Netherlands 1100-1800

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Figure 2. Skill differentials in the European building industry, 1300-1799 (by city)

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Vienna

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EIC: ABILITY TO CODIFY AND EXPERIMENT

• Extensive codification via drawing, product design, 3D modelling, numbers

• Codification as means for technical heuristics

• Pressure for codification arises endogenously from circulation of technicians with different practices

• Experimentation for product and process innovation from 15th c.

TRANSFERRING KNOWLEDGE ACROSS SPACE

• 3 kinds of transfer: by text, by patent, by migrating individuals

Transfer by text and patent of little use before 1800

Two kinds of physical transfer: temporary and permanent

Temporary transfer via journeyman tramping (allocation mechanism) from 14th c. (EIC)

Some evidence of labor market integration in the Gothic era (pre 1550)

Figure 3. Integration of the skilled builders' market 1400-1799

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TRANSFERRING KNOWLEDGE ACROSS SPACE cont.

• Permanent transfer caused by local shocks (push) and competing mercantilist states (pull)

• Guild opposition to incoming innovators based on nature of innovation (L/K saving) and internal guild structure (large vs. small artisans)

• Evidence that transfer system works successfully from shifting technological frontier from SE (c.1200-1500) to NW (1600-1800)

TRANSFERRING KNOWLEDGE ACROSS SPACE cont.

• Two main impediments to technological transfer were information and transport costs, and lack of technical complementarities

• Transfer costs fall over time (cf. urbanization, transport, market integration)

CONCLUSIONS

1. Craft guilds generate human capital, but have weak control over entry and esp. exit (distinctively European)

2. High ecological variation in demand (not distinctively European)

3. Competing sources of court-based demand (not source of dynamic disequilibrium; distinctively European?)

4. Persistent military competition (source of dynamic disequilibrium; distinctively European)

5. ‘Cardwell’s Law’ (long-run diminishing returns due to rent-seeking etc.) is evaded through migration (distinctively European?)