nep-ino New Economics Papers
on Innovation
Issue of 2005‒01‒09
five papers chosen by
Koen Frenken
Universiteit Utrecht

  1. The Persistence of Regional New Business Formation-Activity over Time - Assessing the Potential of Policy Promotion Programs By Michael Fritsch; Pamela Mueller
  2. Venture Capital Investment and Labor Market Performance: New Empirical Evidence for OECD Countries By Belke, Ansgar; Schaal, Andreas
  3. Do Government Policies that Promote Competition Encourage or Discourage New Product and Process Development in Low and Middle-Income Countries? By George Clarke
  4. Micro and nanotechnology commercialization: balance between exploration and exploitation By WHC Knol
  5. Nanotechnology and business opportunities: scenarios as awareness instrument By WHC Knol

  1. By: Michael Fritsch; Pamela Mueller
    Abstract: We investigate regional differences in the level and the development of regional new business formation activity. There is a pronounced variance of start-up rates across the regions. The level of regional new firm formation is rather path-dependent so that changes are relatively small. The main factors determining the level of regional start-ups are innovation and entrepreneurship. These factors also seem to be responsible for changes in the level of regional new business formation. In addition, unemployment plays a role. Steering innovation and creating an entrepreneurial atmosphere could be an appropriate starting point for policy measures that try to promote start-ups. Our empirical evidence strongly suggests that such measures may have significant effect only in the long run.
    Keywords: New businesses, entrepreneurship, growth regimes, time lags
    JEL: M13 O1 O18 R11
    Date: 2005–01
  2. By: Belke, Ansgar (University of Hohenheim and IZA Bonn); Schaal, Andreas (University of Hohenheim)
    Abstract: Anglo-Saxon countries have been successful in the 1990s concerning labor market performance compared to the former role models Germany and Japan. This reversal in relative economic performance might be related to idiosyncracies in financial markets with bank-based financial markets as in Germany and Japan being possibly inferior to stockmarket based financial markets in turbulent times and when approaching the economic frontier. A cleavage is related to venture capital markets which are flourishing on Anglo- Saxon but not on German type financial markets. Venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also nowadays for employment growth.
    Keywords: labor markets, venture capital, unemployment, new economy, panel data analysis
    JEL: E22 E24 E44 G24 G32
    Date: 2004–12
  3. By: George Clarke (World Bank)
    Abstract: Previous work has shown that firms in low and middle-income countries in Eastern Europe and Central Asia that feel greater pressure to innovate from their competitors are more likely to introduce new products and services than firms that do not feel pressure (Carlin and others 2001; World Bank 2004). However, competition also appears to affect innovation in other ways. In particular, firms in these countries that face greater price competition appear to be less likely to innovate than other firms (Carlin and others 2001). Clarke assesses how competition and trade policy affect these different aspects of competition and, consequently, assesses their net impact on innovation. He finds that reducing tariffs and enacting and enforcing competition laws modestly increases both the pressure that firms feel regarding innovation and the level of price competition in the domestic economy. The net impact that lower tariffs have on new product and process development appears to be negative but small—for the most part the opposing effects cancel out. In contrast, stricter competition laws and better enforcement of those laws appear to increase the likelihood of new product and process development, especially when competition is treated as endogenous to innovation. This paper—a product of the Growth and Investment Team, Development Research Group—is part of a larger effort in the group to understand the determinants of competition.
    Keywords: Industry; International Economics; Private Sector Development
    Date: 2005–01–03
  4. By: WHC Knol (Qeam)
    Abstract: Innovative materials, components, and systems based on micro and nanotechnologies are recognized as promising growth innovators. The coming years the commercialization of micro and nanotechnology will be extended, but in order to commercialize micro and nanotechnology successfully, besides exploration a parallel focus should be aimed at exploitation. This paper presents in a brief and non-exhaustive manor a theoretical introduction and two company introductions related to exploitation and exploration focus embedded in the innovation development process to commercialize customer-oriented applications. A balanced approach between exploration and exploitation within organizations business, technological, and scientific domain could sharpen micro and nanotechnology companies into sustainable competitive market-driven enterprises.
    JEL: O P
    Date: 2005–01–03
  5. By: WHC Knol (Qeam)
    Abstract: For a few years now, nanotechnology has been recognised as a promising new growth innovator. This leads to a shift from the exploration of nanotechnology knowledge towards a phase of exploitation. The coming years this commercialisation of nanotechnology will be extended. Nanotechnology is a disruptive technology phenomenon, which leads to more difficulties in overseeing business opportunities. Additionally, the fact that high-tech small firms, especially those dealing with nanotechnology, are highly interested in developments in science and technology, begs the question how to stimulate the awareness for (new) business opportunities in nanotechnology within these firms. A promising strategy to stimulate learning and awareness of business opportunities in nanotechnology is the use of scenarios. These projections focused on uncertainty stretch the mental model of entrepreneurs and/or managers and have the ability to activate learning processes. This paper presents the (theoretical) fundaments of scenario usage in relation to the recognition of business opportunities in nanotechnology.
    JEL: O P
    Date: 2005–01–03

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