The disaggregated technology production function: A new model of university and corporate research

Moreover, in assessing the resulting applied technology's impact on economic growth, both the general and partial equilibrium literatures enter the technology variable into a production function with the common “production” assets (physical capital and labor). Such models obscure an important distinction between technology and these production assets-namely, the fact that technology is primarily a “demand-shifting” asset. As such, its role is correctly specified only when combined with the other major demand-shifting asset, marketing. Allocations to these two assets vary across competing firms implying a spatial model of competition, while still providing traceability to the exogenous sources of public good technology elements, such as universities.