Quality Index of Economic Activities
| High | Low | |
|---|---|---|
| Knowledge | New | Old |
| Learning Curves | Steep | Flat |
| Grow | High | Low |
| Tech Change | Rapit | Slow |
| R & D | Intensive | Pasive |
| Learning | By Doing | Not Needed (Little) |
| Information | Imperfect | Perfect |
| Investments | Large Chunks | Small (Divisible) |
| Competition | Imperfect (Dynamic) | Perfect |
| Wages | High | Low |
| Economy of Scale | Yes (Increasing Returns) | No (Decreasing Returns) |
| Entry / Exit Barriers | High-Low | Low-High |
| Marketing | Branded | Commodity |
| Synergies - Linkages | High | Small |
| Innovation | High (Product Innovation) | Low (Proces Innovation / if any) |
| Economic Model | Schumpeterian Economics | Classical Economics |
| Capital | Intensive | Non-Intensive |
| Automative paint | Baseballs |
| Characteristics of good (Schumpeterian) economic activities | Characteristics of ‘bad’ (Malthusian) economic activities |
|---|---|
| Increasing Returns | Diminishing Returns |
| Large division of labor (large synergies, linkages, clusters) | Little division of labor (monoculture) |
| Dynamic imperfect competition | Perfect competition |
| Technical change tends to increase wages (Fordist wage regime) | Technical change tends to lower prices to customers abroad |
| Stable Prices | Large price fluctuations |
| Generally skilled labor | Generally unskilled labor |
| Creates a middle class | Creates ‘feudal’ class structure |
Commodities
- Animal & Animal Products
- Vegetable Products
- Foodstuffs
- Mineral Products
Low-tech manufactures:
- Plastics / Rubbers
- Raw Hides, Skins, Leather, & Furs
- Wood & Wood Products
- Textiles
- Footwear / Headgear
- Stone / Glass
- Metals
- Miscellaneous
Medium-high-tech manufactures
- Machinery / Electrical
- Transportation
- Chemicals
References
- Reinert, Erik S. How rich countries got rich... and why poor countries stay poor. Hachette UK, 2019.