This 2008 paper reviews a major research project conducted within the European Union's PILOT (Policy and Innovation in Low Tech) framework. It gives an overview of the structure, content, and results of the PILOT project, and its implications for Australia. The EU study found:
- Low and Medium Technology industries persist in the growth and trade structures of the advanced countries. There is no significant evidence of structural change towards high-tech manufacturing, and Low and Medium sectors contribute roughly the same to growth as high-tech sectors.
- Low and Medium Technology sectors innovate consistently, but do not do so on the basis of R&D results. That is, innovation is driven by incremental product change, not by application or commercialisation of R&D.
- There are strong linkages between Low and Medium Technology industries and high-tech activities, with the Low and Medium Technology sectors often shaping technology developments in high-tech. Adoption of products by Low and Medium Technology sectors appears to be a critical determinant of whether or not high‑tech sectors succeed.
- Low and Medium Technologyfirms and industries exist as complex social organisations, embedded in networks. This ‘embeddedness’ gives them a major competitive advantage as it is often difficult to imitate the social organisations that create the products. This is a key reason for their survival and growth.
- There is a general policy neglect of Low and Medium Technology industries.