Liuc Papers n. 31, Serie Economia e Impresa 7, giugno 1996 1 TECHNOLOGICAL CHANGE AND INTERNATIONAL COMPETITIVENESS: THE CASE OF SWITZERLAND Stefano Breschi, Rodolfo Helg Introduction In this paper we present the preliminary results of a research project on the relationship between trade and technological performance with a special focus on Switzerland. The paper is divided into three major parts. In the first part, after a brief description of the datasets used in the paper, we present an overview of the scientific and technological activity of Switzerland in comparison with the major industrialized countries. In the second part, we characterize some aspects of the relationship between international performance and technological specialization of countries. First, a broad analysis of the sectoral profile of Switzerland’s technological and trade specialization will be carried out. Then, a preliminary empirical analysis of the relationship between the two variables will be presented. In both cases, the analysis will deal with the whole aggregate of manufacturing sectors and with a subsample of high-tech sectors. In the third part of the paper, we will deal with the sectoral and the spatial organization of innovative activities for the case of Switzerland. A final sec- tion will provide concluding remarks. The data In this paper, patent data have been used to measure the innovative capabilities and performance of Switzerland compared with that of other major OECD countries. The data refer to patent applications at the European Patent Office (EPO) of all OECD countries for the period 1980-93. The limitations of patent data are well known. Not all innovations are patented by firms. Different technologies are differently patentable and firms may have different propensities to patent their innovations. The economic value of single patents is highly different and it cannot be assessed unless specific analyses of patent renewals or patent citations are done. However, patents represent a very homogeneous measure of technological novelty across countries and are available for long time series. They also provide detailed data at the firm and technological class levels. For our purposes, they provide therefore a reasonably good measure of innovative activities at the country level.