This paper seeks to build on theory, to develop new methods for understanding the nature and basis of sectoral and national competitive advantage, and to do so with a temporal perspective. Neo-Schumpeterian and evolutionary economics perspectives are in large part built around the concepts of barriers to entry and core competences. Unless these are established, individual firms, networks of firms and countries will be unable to generate sustained income growth. There is no one measure which adequately reflects these barriers to entry, and much of the research has been concerned to generate proxies, each of which is in itself partial, but which together provide for a comprehensive picture. During the late 1970s, preliminary work was done on the unit price of UK trade as an indicator of relative technological competence. However, this approach has largely been neglected since then, receiving only sporadic attention in the US literature, and at high levels of product aggregation. This paper utilises this approach to try and reflect the dynamic process of shifting competitive advantage in the global economy. Its distinctive feature is the level of detail - six-digit trade classifications - and its breadth of coverage, being applied to seven sets of sectoral classifications involving more than 12,000 product groups. The data-set relates to EU imports of manufactures between 1988 and 2001.
Kaplinsky, R.; Paulino, A.S. Innovation and competitiveness: trends in unit prices in global trade. (2004) 22 pp.