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Sustainable Growth and Employment Creation in the Technological Integration of the EU Economy (SETI), Final Report

Project ID: HPSE-CT-2001-00057


The SETI project focused on the impact of the globalisation of technology, the development and diffusion of Information and Communication Technologies (ICT) and the rise of business services on national patterns of specialisation and economic growth in Europe. Particular emphasis was given in the project to the rise of business services, its effect on economic growth and its links with the production and diffusion of ICTs, as well as to the interdependence between business services and the manufacturing sector. In this context, a simultaneous disequilibrium model was developed and tested in which economic growth depends on technology production and diffusion and business services, while technology and business services interact in a way that can create virtuous and/or vicious circles of growth.
The main findings that emerged from the project regarding the interaction between technology accumulation and diffusion, business services and economic growth were:
i) the strategic role played by innovation (and, in particular by human capital and ICT expenditures) in economic growth;
ii) the importance of business services (both domestically produced and imported) for economic growth;
iii) the two-way interaction between the rise of business services and technology accumulation;
iv) the link between the structure of the manufacturing sector and a country's capability to produce and import business services.
The estimation of the disequilibrium model also shows that output is positively correlated with the stock of technology, the stock of physical capital and labour, and domestic and imported services. Both domestic and imported services are positively correlated with output and technology accumulation.

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