nep-ino New Economics Papers
on Innovation
Issue of 2005‒10‒15
nine papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Hungarian Innovation Policy: What's the Best Way Forward? By Philip Hemmings
  2. Making Design Rules: A Multi-Domain Perspective By Andrea Prencipe; Stefano Brusoni
  4. Towards a taxonomy of innovation systems By Manuel Mira Godinho; Sandro F. Mendonça; Tiago Santos Pereira
  5. International Licensing and the Strengthening of Intellectual Property Rights in Developing Countries By Douglas C. Lippoldt; Walter Park
  6. "Technology Adoption, Learning by Doing, and Productivity: A Study of Steel Refining Furnaces" By Tsuyoshi Nakamura; Hiroshi Ohashi
  8. Licences internationales et renforcement des droits de propriété intellectuelle dans les pays en développement By Douglas C. Lippoldt; Walter Park
  9. Simulating the prospects of technological catching up By José Castro Caldas; Manuel Mira Godinho; Ricardo Pais Mamede

  1. By: Philip Hemmings
    Abstract: The Hungarian government has recently been focusing on innovation policy as part of a wider campaign to improve the business environment. This paper first underscores the importance of a good general business climate in encouraging both formal and informal R&D activity as well as ensuring Hungary benefits from the international diffusion of innovation. In examining specific innovation policies, the new National Innovation System is described and an assessment is made of the National Innovation Fund and the Innovation Contribution used to fund it. Assessment of changes in R&D tax allowances and in the strategy for giving out grants for research is also made. The paper also looks at regulatory reform to improve industry-science links, including the government’s recent legislative changes that make it easier for universities to set up spin-off companies. The final section considers what further reforms are needed to help tertiary and compulsory education become more conducive to innovation and to encourage the deepening of human capital in general. <P>La politique d'innovation en Hongrie Le gouvernement hongrois a récemment mis l'accent sur la politique d'innovation dans le cadre plus vaste d'une campagne destinée à améliorer l'environnement des entreprises. Cet document souligne à quel point il est important que le climat général des affaires soit bon pour encourager les activités formelles de recherche-développement (R-D) et les types plus informels d'innovation, et pour que la Hongrie puisse tirer parti de la diffusion internationale de l'innovation. Dans le cadre de l'examen des dispositifs spécifiques de promotion de l'innovation, nous décrivons le nouveau Système national d'innovation et nous évaluons le Fonds national pour l'innovation, ainsi que la Contribution à l'innovation utilisée pour le financer. Nous examinons également l'évolution des mécanismes de crédits d'impôt et de la stratégie d'attribution des subventions de recherche. Cet document aborde ensuite les mesures de réforme de la réglementation axées sur le resserrement des liens entre entreprises et milieux scientifiques, notamment les dispositions législatives adoptées récemment qui facilitent la création par les universités d'entreprises issues de la recherche. Dans la dernière partie, nous nous demandons quelles sont les réformes complémentaires nécessaires pour que l'enseignement supérieur et l'enseignement obligatoire favorisent davantage l'innovation et le renforcement du capital humain en général.
    Keywords: Hungary, Hongrie, research and development, recherche-développement, innovation policy, education policy, politique innovation, politique enseignement
    JEL: I20 O30 P20
    Date: 2005–09–28
  2. By: Andrea Prencipe (SPRU, University of Sussex); Stefano Brusoni (Bocconi University (CESPRI and CRORA) and Silvio Tronchetti Provera Foundation)
    Abstract: This study analyzes the processes whereby organizations develop radical innovations in response to environmental transformations. It explores the changes in organizational structures, practices and business strategies entailed by the implementation of such innovations. From the literature on modularity, we borrow the idea that the evolutionary dynamics of artifacts and organizations are linked by design rules, i.e. a set of principles that allocate functions to components, identify the operating principle of each component and determine the interfaces among modules. Through an in-depth case study of radical innovation in tire manufacturing, we study the joint dynamics of technical and organizational change during the transition from old to new design rules. We argue that technical change and organization adaptation are linked, but that such relationship is mediated and rendered open-ended by the evolution of the underlying bodies of knowledge.
    Keywords: organizational change, innovation, technological change, modularity, tire manufacturing
    JEL: O33 L20 L62
    Date: 2005–10–10
  3. By: Sigurdson, Jon (European Institute of Japanese Studies)
    Abstract: This report provides insights on the expansive development in Shanghai of human resources in higher education and the creation of a huge web of incubators, university science parks, district industrial parks, and various specialized development zones. With a total population of some 17 million and a GDP per capita of around US$3,000 the city planners expects that 2.5 per cent of its GDP will in 2005 be used for research and development. FDI in high technology and returning scientists in microelectronics illustrate the ambitions of Shanghai to become a knowledge city. More than 140 foreign-controlled R&D laboratories have already been established in Shanghai. Their number and sizes will increase and also involve more basic research as the IPR regime improves. Shanghai will emerge as innovative knowledge region on the world stage that before 2020 will be competing with other global knowledge regions such as the Oxford-London-Cambridge triangle by attracting talent and creating new knowledge. This report highlights a rapid and continued expansion of higher education in Shanghai that now has 59 colleges and universities with a total enrolment in 2004 of 600,000 students. The City has 10 universities which are included in the national list of Top-100 Universities which have been selected by the Ministry of Education to receive special treatment and extra resources. Three of a dozen Chinese universities with expectation to become recognized as world-famous research universities are located in Shanghai – Fudan University, Tongji University and Shanghai Jiaotong University. Fudan University Science Park and the School of Microelectronics at Fudan University provide examples of the changing character of the university system in Shanghai Linked to the development of human resources is a web of technological infrastructure of which Zhangjiang High-Technology Development Zone provides an illustration of ongoing efforts to integrate industrial production, research and university education. Shanghai is attracting overseas entrepreneurs in its advancing semiconductor industry, exemplified by SMIC with one of its bases in Zhangjiang High-Technology Development Zone, Shanghai is also attracting returning scientists to expand its IC knowledge base as exemplified by the School of Microelectronics at Fudan University, which has 600 graduate students.
    Keywords: Human factors; Universities; Fudan University; Regional innovation System (RIS) Semiconductors; High Technology Parks; Overview of Science and Technology
    JEL: I18 O31 O32 R58
    Date: 2005–10–06
  4. By: Manuel Mira Godinho; Sandro F. Mendonça; Tiago Santos Pereira
    Abstract: The concept of National Innovation System (NIS) has been recently applied in the context of developing nations even tough it was originally developed in relation to the more developed economies (Japan, Scandinavian countries, US etc.). This raises the methodological problem of knowing whether what was learnt in the study of more advanced NISs is relevant for all sorts of economies regardless the maturity of their actual innovation systems. With this question in mind an exploratory exercise is implemented. First a technique for mapping different NIS is put forward and next based on such mapping a taxonomy of NISs is proposed. The technique although simple in the steps it requires shows analytical potential. The cartography it generates allows one to compare directly different countries, by visualizing in bi-dimensional space the graphic pattern of the relevant dimensions of their respective NISs. This technique is applied to 69 countries (87.4% of the world population) and a set of 29 indicators is used to examine these NISs along eight major dimensions. With the resulting data, and with the help of cluster analysis, a taxonomy of innovation systems is proposed. That taxonomy which contains 6 major types of NISs indicates that what differentiates most the individual systems is their performance in three critical dimensions: innovation, diffusion and basic and applied knowledge. Country size and the natural resources endowment of the economies also emerge as important contingency factors underlying the overall dynamics of different NISs.
    Keywords: innovation; national innovation systems; economic development.
  5. By: Douglas C. Lippoldt; Walter Park
    Abstract: This study presents an empirical analysis of the extent to which stronger intellectual property rights promote international technology transfer through licensing activities. The analysis focuses on licensing activities of U.S. multinationals as well as on international licensing alliances between firms in developing and developed nations. Both aggregate level data and firm level data are examined. The study provides general support for the proposition that the strengthening of intellectual property rights - as measured by selected indicators - has had a net positive effect on technology transfer via licensing during the 1990s. The general implication of this study for developing economies is that IPR reform should be one part of a general strategy for promoting economic development in combination with other complementary policy reforms. In particular, patent rights and effective enforcement can be instrumental in enabling firms in developing nations to access and exploit technologies and know-how through licensing agreements with parties in developed nations. Overall, the analysis presented here indicates that where developing countries have moved to address weaknesses in these areas in recent years, they have tended to experience enhanced access to technology through licensing.
    Keywords: economic development, intellectual property rights, licensing
    Date: 2004–12–21
  6. By: Tsuyoshi Nakamura (Department of Economics, Tokyo Keizai University); Hiroshi Ohashi (Faculty of Economics, University of Tokyo)
    Abstract: Models of vintage-capital learning by doing predict an initial fall in productivity after the introduction of new technology. This paper examines the impact of new technology on plant-level productivity in the Japanese steel industry in the 1950s and 1960s. The introduction of the basic oxygen furnace was the greatest breakthrough in the steel re.ning process in the last century. We estimate production function, taking account of the di.erences in technology between the re.ning furnaces owned by a plant. Estimation results indicate that a more productive plant was likely to adopt the new technology, and that the adoption would be timed to occur right after the peak of the productivity level achieved with the old technology. We have found that the adoption of the new technology primarily accounted not only for the industry's productivity slowdown in the early 1960s, but also for the industry's remarkable growth in the post-war period. These results are robust to endogeneity in the choice of input and technology.
    Date: 2005–09
  7. By: Tuomas Takalo (Bank of Finland); Tanja Tanayama (VTT Research); Otto Toivanen (HECER)
    Abstract: We develop a new method to estimate the returns to R&D, their distribution, and their determinants. We model a continuous optimal treatment with outcome heterogeneity, where the treatment outcome depends on the applicant’s investment. The model takes into account application costs, and isolates the effects of the treatment on the public agency running the treatment program. Under the assumption of a welfare-maximizing agency, we identify general equilibrium treatment effects and social returns to R&D. The model yields a restriction on the application equation that helps identify the parameters of the cost-of- application function. The proposed estimation strategy is applied to project level data from the granting process of R&D subsidies. We find that larger firms have higher marginal profitability of R&D. Rates of return on R&D are high and their distribution skew. Agency specific returns are non-monotonic in private returns. Project level spillovers are linear in R&D. The median increase from subsidies in the agency’s utility not appropriated by the applicant is 16 000€. Application costs increase with the profitability shock and ignoring application costs severely biases the estimated rates of return upwards.
    Keywords: applications, effort, investment, rate of return, R&D, R&D return distribution selection, subsidies, treatment program, treatment effects, welfare
    JEL: L
    Date: 2005–10–10
  8. By: Douglas C. Lippoldt; Walter Park
    Abstract: Le présent document étudie de manière empirique l’influence que peut exercer une meilleure protection des droits de propriété intellectuelle (DPI) sur le transfert international de technologie par l’intermédiaire de la concession de licences. L’analyse est centrée sur les activités des multinationales des États-Unis en matière de licences ainsi que sur les alliances internationales entre pays développés et en développement dans ce domaine. Elle utilise à la fois des données agrégées et des données au niveau des entreprises. L’étude fournit des éléments généraux d’appui à l’idée que le renforcement des droits de propriété intellectuelle – mesuré par des indicateurs choisis – a eu un effet net positif sur le transfert de technologies au moyen de licences pendant les années 90. Elle montre que, pour les économies en développement, la réforme des DPI doit faire partie d’une stratégie générale de promotion du développement économique, en association avec d’autres réformes complémentaires. En particulier, les droits de brevet et l’efficacité de leur mise en œuvre sont déterminants pour permettre aux entreprises des pays en développement d’accéder aux technologies et au savoir-faire et de les exploiter dans le cadre d’accords de concession de licence avec des parties des pays développés. Dans l’ensemble, cette analyse indique que les pays en développement qui ont cherché à remédier aux faiblesses rencontrées dans ces domaines ces dernières années ont généralement amélioré leur accès aux technologies au moyen des licences.
    Keywords: développement économique, droit de propriété intellectuelle, licence
    Date: 2005–03–25
  9. By: José Castro Caldas; Manuel Mira Godinho; Ricardo Pais Mamede
    Abstract: Local increasing returns associated with static and dynamic scale effects, knowledge spillovers, polarisation effects and the distance that separates different regions are among the most important driving forces behind the dynamics of economic and technological convergence. This paper puts forward a computational simulation model that seeks to integrate these factors. The modelling exercise was designed to achieve a better understanding of the relationship between the aspects underlying the specific trajectories of regional technological accumulation and the aggregate convergence/divergence patterns stemming from these trajectories. Analysis of the simulation’s results allows us to draw several conclusions. Firstly, it is shown that the opportunities for interaction and the resulting knowledge spillovers are a necessary but not sufficient condition for convergence. Moreover, up to a certain point, an increase in the opportunities for interaction between regions may lead to further divergence. Secondly, when spatial friction in the interactions is either relatively low or high, regions which could be “losers” for a given initial distribution of technological capabilities may become “winners” for another one (“history matters”). Conversely, for intermediate levels of spatial friction leading to central polarisation, history is largely irrelevant – irrespective of the initial space distribution of technological capability and sequence of chance events, a polarised centre-periphery pattern emerges. Finally, when spatial distance imposes high friction on interactions between regions, and when they do not have to be very similar in their levels of technological capabilities in order to learn from each other, regions in the core of “continental masses” benefit in terms of increased technological capability (“space matters”).

This nep-ino issue is ©2005 by Koen Frenken. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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