Review of Industrial Organization 19: 121–123, 2001.
Sources of Industrial Leadership: Studies of Seven Industries, David C. Mowery
and Richard R. Nelson, editors. New York: Cambridge University Press, 1999, 401
pages, $59.95 (hardback), $22.95 (paperback).
This book offers a thorough examination of sources of industrial leadership through
the study of seven industries. Semiconductors, computers, computer software, ma-
chine tools, chemicals, pharmaceuticals (with molecular biology), and diagnostic
devices comprise the group. Although the mix of industries is diverse, all seven
industries share the common theme of having gained national leadership. The in-
clusion of such a broad range of industries makes this book a real contribution to
the literature on technological innovation.
In the introductory chapter, Mowery and Nelson deﬁne the meaning of indus-
trial leadership as those industries in which being ahead of ones’ competitors in
product or process technology gives an advantage in world markets. They are
not concerned with just technological innovation, but with industries that have
translated their technological innovations into commercial successes. Mowery and
Nelson also summarize the relevant issues of each industry study and explore four
broad groups of questions regarding industrial leadership. After reading the sub-
sequent seven industry chapters, one is left with multiple examples supporting or
refuting the theories proposed in the introduction. In order to give you an idea of
the way in which the industry chapters help to provide useful evidence for the study
of industrial leadership, I will mention one or two applications for each of the four
broad questions addressed.
First, Mowery and Nelson explore four possible critical factors behind indus-
trial leadership: resources, institutions, markets, and technology. In addressing this
question, Langlois and Stenmueller discuss the impact of the yen/dollar exchange
rate on semiconductors and state that “the most important long-term result of the
strong yen may have been the relative decline in Japanese consumer electronic
production” (p. 53). Additionally, Mazzoleni addresses the role of technology as a
critical factor behind industrial leadership in the machine tool industry. Speciﬁc-
ally, he concludes that in the case of the U.S. machine tool industry in the second
half of the nineteenth century and the current Japanese industry, the pattern of