nep-ino New Economics Papers
on Innovation
Issue of 2004‒12‒20
sixteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Improving UccNet-compliant B2B Supply-chain Applications Using a Context Interchange Framework By Tu, Steven; Madnick, Stuart; Wu, Luis
  2. Measuring the Impact of Information Technology on Value and Productivity using a Process-Based Approach: The case for RFID Technologies By Subirana, Brian; Eckes, Chad; Herman, George; Sarma, Sanjay; Barrett, Michael
  3. Knowledge Management in Knowledge Intensive Service Networks: A Strategic Management Perspective By Günther Blaich; Heiner Evanschitzky; Peter Kenning; Dieter Ahlert
  4. Assessing the Relative Performance of U.K. University Technology Transfer Offices: Parametric and Non-Parametric Evidence By Wendy Chapple; Andy Lockett; Donald S. Siegel; Mike Wright
  5. Innovation as Evolution By Deni Khanafiah; Hokky Situngkir
  6. Information Technology as an Engine of Broad-Based Growth in India By Nirvikar Singh
  7. Domestic vs. International Spillovers: Evidence from Swedish Firm Level Data By Poldahl, Andreas
  8. Regional Integration And North-South Technology Diffusion: The Case of Nafta By Maurice Schiff; Yanling Wang
  9. Exploring the patent explosion By Bronwyn Hall
  10. Vertical Integration and Technology: Theory and Evidence By Daron Acemoglu; Philippe Aghion; Rachel Griffith; Fabrizio Zilibotti
  11. Simulating knowledge dynamics in innovation networks (SKIN) By Petra Ahrweiler; Andreas Pyka; Nigel Gilbert
  12. Skill-Biased Technological Change: Is there Hope for the Unskilled? By Matthias Weiss
  13. Institutions and Technological Innovation During the Early Economic Growth: Evidence from the Great Inventors of the United States, 1790-1930 By B. Zorina Khan; Kenneth L. Sokoloff
  14. Employment Effects of Skill Biased Technological Change when Benefits are Linked to Per-Capita Income By Matthias Weiss
  15. Incentives for knowledge production with many producers By Bronwyn Hall
  16. The Canada-Atlantic Canada Manufacturing Productivity Gap: A Detailed Analysis By Andrew Sharpe

  1. By: Tu, Steven; Madnick, Stuart; Wu, Luis
    Abstract: UccNet is a globally centralized B2B electronic data platform for storing trading product item information and hosted by the non-profit international standardization institute EAN-UCC. It is an emerging B2B data communication standard for the retail industry with significant potential impact. Many US retailers are requesting their international suppliers for compulsory subscription by the year-end of either 2004 or 2005 and many major IT software providers and consulting firms specialized in supply chain management are preparing packaged services/solutions for this imminent demand. In light of the increasing importance of UccNet on both the technology and application sides, this paper attempts to advance the following argument: Though UccNet establishes an architectural framework to resolve the many-to-many connectivity issue and data synchronization issue through a centralized product database and a uniform numbering system (i.e., Global Trade Item Numbering), there are context discrepancy issues remaining to be addressed. We show with a real case study that context discrepancy is inherent in the international trading applications where UccNet is intended to be used. Naturally, international trading partners tend to define and describe product item information differently. That difference, either due to the culture or the geographical location, is not considered in the original design of UccNet. As an example, the attribute "width" contained in the database schema of UccNet would be filled by a China-based supplier in 'meter' and yet be interpreted as 'feet' by the US retail buyer. We show how the Context Interchange Framework, operating under the rationale of local autonomy and speaking to the resolution of context mediation issue, can be nicely incorporated into the existing UccNet framework to constitute theoretically a more complete technical solution and practically a more useful B2B supply chain business solution.
    Keywords: B2B, Retail Supply-Chain, UccNet, Data Connectivity and Synchronization, Context Interchange, Data Semantics,
    Date: 2004–12–10
  2. By: Subirana, Brian; Eckes, Chad; Herman, George; Sarma, Sanjay; Barrett, Michael
    Abstract: There has been a lot of research addressing the relationship between Information Technology (IT) investments and productivity. Most of the work has been based on firm-level metrics such as total IT investment. We present what we believe is one of the first attempts to create a systematic methodology to assess the impact of IT in business process performance metrics. Our approach builds on the MIT Process Handbook as a basis to both guide the analysis and capture the resulting knowledge for future use. We will present preliminary results on how to use such methodology to analyze the impact of a given IT technology, namely RFID (radio frequency identification devices), in performance metrics of a consumer packaged goods company. We are interested in looking at how IT may impact performance metrics such as productivity, cost and value. We believe our methodology can help CPG companies prioritize their investments. We show results on how the specialization features of the MIT Process Handbook can incorporate performance metrics to help assess such investments in RFID.
    Keywords: IT investments, IT productivity, Information Technology, MIT Process Handbook,
    Date: 2004–12–10
  3. By: Günther Blaich (University of Münster); Heiner Evanschitzky (University of Münster); Peter Kenning (University of Münster); Dieter Ahlert (University of Münster)
    Abstract: Knowledge is the key to gaining and sustaining competitive advantage. Driven by a change in consumer needs towards “comprehensive service solutions”, more and more services are offered through networks. By so doing, individual firms can concentrate on their distinctive competencies and by combining these with those of partner firms such a network is able to offer complex, knowledge-intensive services at high quality and at reasonable prices. It is clear that the success of such knowledge intensive service networks depends strongly on the effective and efficient combination and use of the distinctive competencies of the network partners. That ability to combine and use distinctive competencies represents the core competency of the network as a whole. Understanding knowledge as a key resource for those distinctive competencies the combination problem can be seen as a knowledge management problem. The main contribution of this paper is to analyze knowledge management in service networks. We use a strategic management approach instead of a more technology-oriented approach since we believe that managerial problems still remain after technological problems have been solved. Therefore the question arises how to guarantee an effective and efficient combination and utilization of the distributed knowledge in knowledge-intensive service networks. The objective of this paper is to analyze the problems concerning the management of knowledge in service networks. It outlines possible solutions for these knowledge management problems in order to provide sustaining competitive advantage for the network as a whole.
    Keywords: knowledge management, networks, knowledge-intensive services
    JEL: A
    Date: 2004–12–17
  4. By: Wendy Chapple (Nottingham University Business School, University of Nottingham, Jubilee Campus, Nottingham NG8 1BB, UK.); Andy Lockett (Nottingham University Business School, University of Nottingham, Jubilee Campus, Nottingham NG8 1BB, UK.); Donald S. Siegel (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Mike Wright (Nottingham University Business School, University of Nottingham, Jubilee Campus, Nottingham NG8 1BB, UK.)
    Abstract: We present evidence on the relative efficiency of U.K. university technology transfer offices (TTOs) using data envelopment analysis (DEA) and stochastic frontier estimation (SFE). We find that U.K. TTOs exhibit low levels of absolute efficiency. Universities located in regions with higher levels of R&D and GDP appear to be more efficient in technology transfer, implying that there may be regional spillovers in technology transfer. Our results suggest that TTOs may need to be reconfigured into smaller units, since there may be scope for the development of regionally-based, sector focused TTOs. Consistent with qualitative evidence from U.S. TTOs (e.g., Siegel et al. (2003a, b, c)), we find that there may be a need to enhance the skills and capabilities of U.K. TTO managers and licensing professionals.
    JEL: D23 L31 O31 O32
    Date: 2004–12
  5. By: Deni Khanafiah (Bandung Fe Institute); Hokky Situngkir (Bandung Fe Institute)
    Abstract: Cellular phone is one of the most developing technological artifacts today. The evolution occurs through random innovation. Our effort is trying to view the evolution of this artifact from memetics. By constructing a phylomemetic tree based on cellular phone memes to infer or estimate the evolutionary history and relationship among cellular phone. We adopt several methods, which are commonly used in constructing phylogenetic tree, they are UPGMA algorithm and Parsimony Maximum algorithm to construct cellphone phylomemetic tree. Therefore we compare with the innovation tree, which is based on serial number and their appearance time. From phylomemetic tree, we then analyze the process of a cellular phone innovation through looking out on the cellular phone type lies in the same cluster. The comparison of the simulation tree result shows a generally different branching pattern, giving a presumption that innovation in cellular phone is not really relating with their serial number, but occurs merely because of random mutation of allomeme design and competes with its technological development.
    Keywords: artifact, innovation, evolution, memetics, phylomemetic tree, cellular phone.
    JEL: L
    Date: 2004–12–17
  6. By: Nirvikar Singh (University of California, Santa Cruz)
    Abstract: In this paper, we survey some of the developments in India’s IT sector, and prospects for broad-based growth led by this sector. We examine the IT sector, discussing the role of software versus hardware, the growth pattern of the software industry and software exports, and the potential problems in IT labor supply to support future growth. We focus on a current bottleneck for the IT sector, namely the telecommunications infrastructure. Issues considered include the basic driver of technological convergence across voice and data communications, problems with current infrastructure, innovations that have the potential to dramatically alter the economics of access to telecoms, and the evolving structure of the telecoms industry. We also examine the policy environment more closely, arguing that government policy is better focused on removing labor market distortions and infrastructure constraints, rather than providing output or export subsidies to the software industry. We discuss the appropriateness of specific policy goals such as universal access, as well as issues of implementation of more general objectives of broader telecoms access. Finally, we map out the possibilities for broad-based IT-led growth, including increasing value-added, using better telecom links to capture more benefits domestically through offshore development for industrial country firms, greater spillovers to the local economy, broadening the IT industry with production of telecom access devices, improving the functioning of the economy through a more extensive and denser communications network, and improving governance.
    Keywords: information technology, software, complementarities, telecommunications
    JEL: M21 L63 O12 O3
    Date: 2004–12–10
  7. By: Poldahl, Andreas (ESI)
    Abstract: This paper investigates the association between total factor productivity growth and the R&D expenditures of Swedish manufacturing firms in the presence of domestic- and international R&D spillovers. The paper assumes that the principal channel of transmission of new technology is through I/O relations. Econometric evidence suggests that international as well as domestic inter-industry R&D spillovers are important determinants of firms’ productivity growth in the long run. The R&D spillovers generated within the industry and following I/O links seem to be of minor importance in explaining productivity growth. It seems likely that within-industry productivity spillovers follow other channels than I/O flows, such as horizontal spillovers through copying of new products and processes, or labour turnover. The use of a convergence parameter is one way to check for such within-industry technology flows. Our results indicate that a catch-up process exists by which the non-frontier firms in the Swedish manufacturing sector absorb knowledge spillovers from the leading firms in the industry. Finally, a firm’s own R&D efforts are found to be more or less positively correlated with the TFP growth, maybe the contribution from R&D efforts in some sense are underestimated.
    Keywords: TFP growth; R&D expenditures; Convergence; R&D spillovers
    JEL: O31 O33
    Date: 2004–12–17
  8. By: Maurice Schiff; Yanling Wang
    Abstract: The literature on regional integration agreements (RIAs) is vast and deals with political, economic and political economy issues. The literature on the economics of RIAs deals mostly with static effects, and concludes that these effects are in general ambiguous. So far, there has been no empirical analysis of the dynamic effects of RIAs based on their impact on technology diffusion from partner and non-partner countries. This paper is a first attempt in this direction. It examines the impact of NAFTA on total factor productivity (TFP) in Mexico through its impact on trade-related technology transfers from OECD countries. Trade-related technology diffusion is estimated with the use of a measure of trade-related foreign R&D. Foreign R&D is constructed based on industry-specific R&D in the OECD, OECD-Mexico trade patterns, and input-output relations in Mexico. We separate the OECD into two parts, Mexico’s NAFTA partners (US + Canada) and the rest of the OECD. We find, first, that Mexico’s trade with its NAFTA partners has a large and significant impact on Mexico’s TFP while trade with the rest of the OECD does not. This is likely to be due to the fact that Mexico not only benefits from the R&D content of the trade with its Northern neighbors but also benefits from direct contact and close exchanges of information, especially for sub-contracting firms which are more closely integrated in the US and Canada production networks than with the production networks of the more distant countries of the rest of the OECD. Second, we simulate the impact of NAFTA and find that it has led to a permanent increase in TFP in Mexico’s manufacturing sector of between 5.5%and 7.5% and to some convergence to the economies of the US and Canada.
    Date: 2004–12
  9. By: Bronwyn Hall
    Abstract: This paper looks more closely at the sources of patent growth in the United States since 1984. It confirms that the increase is largely due to US patenters, with an earlier surge in Asia, and some increase in Europe. Growth has taken place in all technologies, but not in all industries, being concentrated in the electrical, electronics, computing, and scientific instruments industries. It then examines whether these patents are valued by the market. We know from survey evidence that patents in these industries are not usually considered important for appropriability, but are sometimes considered necessary to secure financing for entering the industry. I compare the market value of patents held by entrant firms to those held by incumbents (controlling for R&D). Using data on publicly traded firms 1980-1989, I find that in industries based on electrical and mechanical technologies the market value of entrantsÕ patents is positive in the post-1984 period (after the patenting surge), but not before, when patents were relatively unimportant in these industries. Also, the value of patent rights in complex product industries (where each product relies on many patents held by a number of other firms) is much higher for entrants than incumbents in the post-1984 period. For discrete product industries (where each product relies on only a few patents, and where the importance of patents for appropriability has traditionally been higher), there is no difference between incumbents and entrants.
    Keywords: patents, market value, information technology, appropriability
    JEL: O34 L10 G24
    Date: 2004–09
  10. By: Daron Acemoglu; Philippe Aghion; Rachel Griffith; Fabrizio Zilibotti
    Abstract: This paper investigates the determinants of vertical integration using data from the UK manufacturing sector. We find that the relationship between a downstream (producer) industry and an upstream (supplier) industry is more likely to be vertically integrated when the producing industry is more technology intensive and the supplying industry is less technology intensive. Moreover, both of these effects are stronger when the supplying industry accounts for a large fraction of the producer's costs. These results are generally robust and hold with alternative measures of technology intensity, with alternative estimation strategies, and with or without controlling for a number of firm and industry-level characteristics. They are consistent with the incomplete contract theories of the firm that emphasize both the potential costs and benefits of vertical integration in terms of investment incentives.
    JEL: L22 L23 L24 L60
    Date: 2004–12
  11. By: Petra Ahrweiler (Research Center Media and Politics, Institute for Political Science, University of Hamburg, Germany); Andreas Pyka (University of Augsburg, Department of Economics); Nigel Gilbert (School of Human Sciences, University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom)
    Abstract: An agent-based simulation model representing a theory of the dynamic processes involved in innovation in modern knowledge-based industries is described. The agent-based approach allows the representation of heterogeneous agents that have individual and varying stocks of knowledge. The simulation is able to model uncertainty, historical change, effect of failure on the agent population, and agent learning from experience, from individual research and from partners and collaborators. The interactions between the agents occur on two levels: through a market with firms supplying and consuming goods for a price, and through the exchange of knowledge. A brief description of the implementation of the model and its user interface is given.
    Keywords: innovation networks, agent-based modelling
    JEL: O31 O32 L22
    Date: 2004–12
  12. By: Matthias Weiss (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: This paper challenges the common view that skill-biased technological change boosts wage inequality. In a multi-sector economy, relative wages depend not only on relative productivities but also on relative goods prices. If ther are complementarities between goods that do not benefit greatly from technological innovations and other goods whose production costs fall in the course of technical progress, the relative price of these "low-tech" goods rises. If the production of these "low-tech" goods is intensive in the use of unskilled labor, unskilled workers benefit from this increase in the relative goods price. This paper presents a simple two-sector, two-factor model of perpetual exogenous skill-biased technological change. The model is able to explain the increase in wage inequality in the 1980s and the subsequent stabilization of the wage structure in the 1990s.
    Date: 2004–03–30
  13. By: B. Zorina Khan; Kenneth L. Sokoloff
    Abstract: Employing a sample of renowned U.S. inventors that combines biographical detail with information on the patents they received over their careers, we highlight the impact of early U.S. patent institutions in providing broad access to economic opportunity and in encouraging trade in new technological knowledge. Through setting low fees and establishing administrative procedures for application, the United States deliberately created a patent system that allowed a much wider range, in socioeconomic class terms, of technologically creative individuals to obtain property rights to their inventions than did European patent institutions. Moreover, by requiring that applications be examined for novelty by technical experts, and by enforcing patent rights strictly, the U.S. system reduced uncertainty about the validity of patent rights, and in that way lowered the cost of transacting in them. Creating secure assets in new technological knowledge and facilitating access to markets in technology in this way both stimulated specialization at invention and further enhanced the opportunities available to technologically creative individuals who would otherwise have lacked the capital to directly extract returns from their efforts. Indeed, we show that until the late 19th century, the 'great inventors' of the U.S. generally had backgrounds that permitted them only limited formal schooling, and made extensive use of their abilities under the patent system to extract returns from trading their patent rights. The usefulness of the 19th century U.S. patent system to inventors with humble origins may have implications for the design of intellectual property institutions in contemporary developing countries.
    JEL: N10 N71 O31 O34
    Date: 2004–12
  14. By: Matthias Weiss (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: This paper studies the employment effects of technological change when benefits are endogenous. If the (i) level of welfare aid depends on the general income level in the economy and (ii) wages for unskilled workers cannot fall below the level of welfare aid, there is a link between the wage for unskilled labor and the productivity of skilled labor. An increase in the latter will lead to an increase in average income and hence the level of welfare aid. This in turn leads unions to ask for higher wages for unskilled workers. Technological change is shown to have employment effects (only) if it is skill-biased and if this link exists.
    Date: 2004–01–22
  15. By: Bronwyn Hall
    Abstract: In this paper, I briefly review the motivations for inventive behavior and describe two common incentive systems that harness and encourage such behavior. This review of well-trodden ground is performed only so that the implications of the rise of the networked knowledge economy for the effectiveness of these incentive systems can be noted. Some theoretical results on the operation and stability of the two incentive systems for the production of knowledge are presented with a discussion of how they might apply in the networked economy. The paper concludes with suggestions on open research questions.
    Keywords: patents, market value, information technology, appropriability
    JEL: O34 L86 L23
    Date: 2004–09
  16. By: Andrew Sharpe
    Abstract: The objectives of this report are to examine the characteristics of manufacturing in Atlantic Canada and to shed light on the factors behind the productivity gap between Atlantic Canada and Canada in the context of the manufacturing sector. A number of possible factors contributing to the Atlantic Canada-Canada manufacturing productivity gap are examined, including innovative activity, capital intensity, quality of human resources, economies of scale and the seasonality of production. Of these, innovation is found to be the most important. Since research and development activity has been historically much lower in Atlantic Canada relative to Canada, it is possible that the level of technology embedded in the capital stock in Atlantic Canada is much lower than in Canada. In the end four factors are identified as contributing the most to the Atlantic Canada-Canada manufacturing productivity gap, namely less innovative effort, particularly in high-tech industries; fewer economies of scale; lower educational attainment of the workforce; and greater seasonality of production.
    Keywords: Canada, Atlantic Canada, Manufacturing, Productivity, Productivity Growth, Living Standards, Income, Economies of Scale, Seasonality, Seasonal Production, Innovation, Research and Development, R&D, Capital Intensity, Human Capital, Educational Attainment
    JEL: L60 O47 O30 J21 J24 O57 J60 D24
    Date: 2003–12

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