Governance, Growth and Global Leadership by Espen Moe

Author:Espen Moe [Moe, Espen]
Language: eng
Format: epub
Tags: History, General
ISBN: 9781317125808
Google: 7OsGDAAAQBAJ
Publisher: Routledge
Published: 2016-04-22T01:27:54+00:00

Conclusions

The chemical industry, dyestuffs in particular, was the world’s first truly science-based industry. For the first time, success was intrinsically connected with the ability to systematically pursue scientific research, and to apply the subsequent results of this research. The methods of the first Industrial Revolution, of tinkering and experimenting by skillful, practical men without much formal training, did no longer suffice. Hence, human capital was crucial. Britain found itself seriously short of skilled chemists. Brilliant individuals still came up with the odd breakthrough, but by the 1880s, the industry had progressed to a level of sophistication that required more than just individual brilliance. From the 1880s, Germany very clearly benefited both from its superior higher education system and from the fact that the links between the education system and the chemical industry was far stronger than in Britain. The development of industrial research laboratories, pioneered by German firms, and supported by the government, is but one example of the much closer links between knowledge and industry, growing out of the needs of this era.

However, prior to the 1880s, there had been a surplus of chemists in the German chemical industry, to such an extent that the early prowess of British chemicals owed much to a surplus of German chemists traveling across the Channel to find employment elsewhere. Hence, while knowledge was undoubtedly important, during the early years demand problems were as great as supply problems. The industry had to mature before it could make good use of scientific expertise. Hence, the contribution of higher education to the early phase of the German chemical industry may well have been scant, even if from the 1880s, it consolidated and extended the advantage that Germany had already. Thus, the most developed market economy with the largest domestic market of the day—Britain—was able to absorb more chemists than Germany. That the British chemical industry to a large part depended on German experts is a clear indication that even in this early phase, human capital was key.

Two other areas of state intervention were patent systems and tariffs. Within patents, the German success was somewhat fortuitous. Normally, a patenting system should be an advantage, and this should have benefited Britain. However, the chemical industry brought new demands to the patenting systems. Hence, Germany, without a patent law did not suffer the institutional constraints provided by an obsolete system. During the early years of the chemical industry, Britain saw endless patent litigation, as the system could not cope. Was a patent simply to be given to the synthetic production of the color red? During this period, German firms could copy and imitate, not themselves constrained by similar laws. When in 1877 a German patent law finally arrived, it took account of the special needs of the chemical industry by including a distinction between product and process patents. Instead of excessively broad patents, like in Britain, only process patents were allowed, giving the industry a strong incentive for large-scale research in different production methods. The patent law thus

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