nep-ino New Economics Papers
on Innovation
Issue of 2006‒02‒12
fifteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Breaking the Fence: Can Patent Rights Deter Biomedical Innovation in “Technology Followers”? By Gehl Sampath, Padmashree
  2. Research Joint Ventures, Licensing, and Industrial Policy By Cuihong Fan; Elmar Wolfstetter
  3. Networks and Innovation : A Survey of Empirical Literature. By Müge Ozman
  4. Organizational Downsizing and Innovation By Richtnér, Anders; Åhlström, Pär
  5. The Market for Patents in Europe By Alfonso Gambardella; Paola Giuri; Alessandra Luzzi
  6. IPRs, Technological Development, and Economic Development By Dolfsma, W.
  7. Networks and heterogeneous performance of cluster firms By Elisa Giuliani
  8. Modeling Commercial Processes and Customer Behaviors to Estimate By Daniel Krob; Alain Bloch; Ada F.S. Ng
  9. Innovationspolitik aus systemtheoretischer Sicht – Ein zyklisches Modell der politischen Steuerung technologischer Innovation By Buchinger, Eva
  10. Crossing borders; when science meets industry. By Eric Canton; Debby Lanser; Joëlle Noailly; Marieke Rensman; Jeroen van de Ven
  11. Knowledge networks and innovative performance in an industrial district. The case of a footwear district in the South of Italy By Ron A. Boschma; Anne L.W. ter Wal
  12. Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry By Guido Buenstorf
  13. The Linkages Between Open Services Markets and Technology Transfer By OECD
  14. An evolutionary perspective on Internet adoption by retailers in the Netherlands By Ron A. Boschma; Jesse W.J. Weltevreden
  15. Scarcity of science and engineering students in the Netherlands. By Joëlle Noailly; Daniël Waagmeester; Bas Jacobs; Marieke Rensman; Dinand Webbink

  1. By: Gehl Sampath, Padmashree (United Nations University, Institute for New Technologies)
    Abstract: The impact of patent protection on biomedical innovation has been a controversial issue. Although a “medical anti-commons” has been predicted due to a proliferation of patents on upstream technologies, evidence to test these concerns is only now emerging. However, most industrial surveys that shed light on this issue are mainly from developed countries, making it very difficult to predict the impact of patenting on biomedical innovation in developing and least developed countries. This paper develops a framework of analysis for the impact of patent rights on biomedical innovation in “technology follower” developing countries. Based on the framework developed in the paper, empirical data collected in an industry-level survey of the Indian pharmaceutical industry between November 2004 and January 2005 is used to analyze the impact of patent rights as recognized under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) on biomedical innovation in technology followers.
    Keywords: intellectual property rights, IPR, patents, biotechnology, pharmaceutical industry, biomedicine, developing countries, India
    Date: 2005
  2. By: Cuihong Fan (Shanghai University of Finance and Economics, School of Economics, Guoding Road 777, 200433 Shanghai, China.; Elmar Wolfstetter (Humboldt University at Berlin, Dept. of Economics, Institute of Economic Theory I, Spandauer Str. 1, D–10178 Berlin, Germany.
    Abstract: This paper reconsiders the explanation of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to license their innovations and to pool their R&D investments. We show that in equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the export oligopoly game. Nevertheless, national governments are driven to subsidize their own national firms in order to increase their strength in the joint venture bargaining game. Therefore, our analysis suggests an alternative explanation of the observed proliferation of R&D subsidies.
    Keywords: patent licensing, industrial organization, R&D subsidies, research joint ventures, innovation policy
    JEL: L13 O34
    Date: 2005–10
  3. By: Müge Ozman
    Abstract: Networks are now understood to be an important mechanism to change economic and social outcomes through non-market means, and one of these outcomes is the contribution of networks to innovation and technological change in general. This survey covers the recent literature on networks as far as they have implications for knowledge transfer among actors, innovation and technological change. We present a recent survey of empirical research, covering inter-firm and intra-firm networks, since these are accepted to have the most important impact on knowledge dissemination and innovation. One important conclusion that can be derived from the survey is that, although there exists a tremendous increase in network research, it is still difficult in most cases to draw robust conclusions and generalizable results. Therefore, one of the aims of this survey is to highlight those areas in which some consensus has been achieved in the literature, and others which need more attention and research in the future.
    Date: 2006
  4. By: Richtnér, Anders (Dept. of Business Administration, Stockholm School of Economics); Åhlström, Pär (Chalmers University of Technology)
    Abstract: Companies implementing a downsizing strategy aiming at increasing cost efficiency and operational effectiveness may face the fact that their innovative ability is hampered. In this paper, we develop a model of the mechanisms through which organizational downsizing affects innovation. We use existing theory to develop propositions regarding the details of how and why organizational downsizing affects innovation. Our model contains three components: a) the organization’s stock of knowledge, b) the individual’s creativity, and c) the knowledge creation process. These are three components which previous research on innovation management has suggested strongly affects innovation. Downsizing is also likely to affect all three components in various ways. Overall, we can expect downsizing to have a negative effect on innovation, but there are aspects of the knowledge creation process which may be positively affected by downsizing.
    Keywords: Innovation; Knowledge; Knowledge creation; Organizational downsizing
    Date: 2006–01–13
  5. By: Alfonso Gambardella; Paola Giuri; Alessandra Luzzi
    Abstract: By using the PatVal-EU dataset we find that the most important determinant of patent licensing is firm size. Patent breadth, value, protection, and other factors suggested by the literature also have an impact, but not as important. In addition, most of these factors affect the willingness to license, but not whether a license actually takes place. We discuss why this suggests that there are transaction costs in the markets for technology. The issue is important because many potential licenses are not licensed suggesting that the markets for technology can be larger, with implied economic benefits.
    Keywords: Licensing, Patent scope, Complementary assets, Firm size, Markets for technology
    Date: 2006–02–09
  6. By: Dolfsma, W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In the year 2000 some $142 billion in royalties were paid internationally by users of a specific piece of knowledge that were protected under Intellectual Property Right law (IPR) to those parties that owned these rights. Under current circumstances where knowledge & innovation play an increasingly significant role in the economy (Foray & Lundvall 1996, Cowan, David and Foray 2000, Cooke 2002, Dolfsma & Soete 2006, Dolfsma 2005). IPRs have become increasingly prominent in debates and are almost unanimously deemed to favor economic development by policymakers, and certainly by policymakers in developed countries. While it has been acknowledged that some parties may benefit more from a system of IPRs than others, in relative terms a Pareto improvement is the expected outcome (Langford 1997). This has not always been the case. In addition, the academic (economic) community is almost unanimous about the system of IPR overshooting its goals. This has been the motivation to include IPRs in the WTO negotiations. The TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) has resulted in 1994 from these negotiations. Especially during the 1990s the number of patents granted has grown tremendously despite the fact that many a scholar still supports Machlup?s (1958, p.28) conclusion that: ?it would be irresponsible, on the basis of our present knowledge of its consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.? From other corners, where specific effects of IPRs are considered, a different and less circumspect sound may be heard. Examples of this are attempts to make available HIV/AIDS drugs at a reduced price compared to what the pharmaceutical companies that have the patents on these drugs demand. I will focus on patents. Empirical and theoretical findings bearing on the question of IPRs? effect on technological development, and thus prospect for economic development, are reviewed. Static and dynamic effects are distinguished. Areas where static effects may be expected include transfer of knowledge, balance of payment effects, effects for large as opposed to small firms, and effect on the ?extent of the market?. Areas for dynamic effects include technological development and technological preemption. The list may not be exhaustive, and effects are interlocking: they may be mutually reinforcing or they may conflict. I will mostly focus on ?dynamic? effects.
    Keywords: Intellectual Property Rights;IPRs;Technological Development;Economic Dynamics;
    Date: 2006–01–26
  7. By: Elisa Giuliani
    Abstract: This paper explores the relationship existing among the heterogeneous nature of firms in industrial clusters, their structural position in knowledge networks and their performance. Following the rising interest for spatially agglomerated industrial firms and their learning and innovative potential the paper shows empirically that the performance of firms in clusters is related with firm-level knowledge endowments and their position in the knowledge network using firm-level data on three wine clusters.
    Keywords: knowledge networks, clusters, firm performance, evolutionary economics, wine sector
    Date: 2006–01
  8. By: Daniel Krob (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X); Alain Bloch (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X); Ada F.S. Ng (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X)
    Abstract: We propose a formal model for estimating the diffusion rate of a new product on a coherent market. Our approach is based on a discrete probabilistic modeling of customer behaviors and of commercial processes.
    Keywords: Diffusion of innovation, diffusion rate, marketing, customer behavior, product diffusion
    Date: 2006–02–05
  9. By: Buchinger, Eva
    Abstract: Innovationspolitik will mit wissenschaftlichem und technischem Fortschritt und dessen Umsetzung in die ökonomische Realität Wohlfahrtseffekte bewirken. Um das zu erreichen, müssen ganz unterschiedliche Politikadressaten mobilisiert und gelenkt werden, deren Autonomie aber Fremdsteuerungsabsichten entgegensteht. Auf Basis der Theorie sozialer Systeme (N. Luhmann) und ihrer auf Autopoiesis bezogenen Konzepte „Umweltoffenheit“, „Steuerungsmedien“ und „Resonanz“ wird ein zyklisches Modell politischer Steuerung technologischer Innovation entwickelt, das sowohl der Autonomie der Steuerungsadressaten als auch der Steuerungsabsicht der Steuerungssubjekte Rechnung trägt. Anhand der Modellbetrachtung wird deutlich, dass die kritische Variable dabei das interaktive Steuerungslernen ist. Die praktische Relevanz des zyklischen Modells politischer Steuerung technologischer Innovation wird anhand der Einordnung innovationspolitischer Überlegungen der OECD und der Europäischen Kommission demonstriert.
    Keywords: Systemtheorie, technologische Innovation, politische Steuerung, Autopoiesis, Politikzyklus
    Date: 2005–02–07
  10. By: Eric Canton; Debby Lanser; Joëlle Noailly; Marieke Rensman; Jeroen van de Ven
    Abstract: Economic growth is ultimately driven by advances in productivity. In turn, productivity growth is driven by R&D and by utilisation of the public knowledge pool. This public knowledge pool is generated by universities and public research institutions. Underutilisation by firms of results from public research can deter economic growth, and the question then emerges how to bring science to the market. In this report we explore whether in Europe public knowledge is underutilised by firms, and investigate the quantitative importance of various knowledge transmission channels (such as publications, informal contacts, consulting). Next we study characteristics of universities and firms that may prevent an effective knowledge transfer. Finally we look at a number of policy initiatives designed to foster science-to-industry knowledge spillovers in the Netherlands and a selection of other countries.
    Keywords: science-to-industry knowledge spillovers; incentives; policy initiatives
    JEL: I28 O31 O38
    Date: 2005–10
  11. By: Ron A. Boschma; Anne L.W. ter Wal
    Abstract: The traditional district literature tends to assume that: (1) the competitiveness of firms depends on external sources of knowledge; (2) all firms in a district benefit from knowledge externalities; (3) relying on external knowledge relationships necessarily means these are confined to the district area. Our case study of the Barletta footwear district in the South of Italy suggests otherwise. Based on social network analysis, we demonstrate that the local knowledge network is quite weak and unevenly distributed among the local firms. A strong local network position of a firm tended to increase their innovative performance, and so did their connectivity to extra-local firms. So, it mattered being connected either locally or non-locally: being co-located was surely not enough. Having a high absorptive capacity seemed to raise only indirectly, through non-local relationships, the innovative performance of firms.
    Keywords: evolutionary economics, new economic geography, social networks, innovative performance, Italy
    Date: 2006–01
  12. By: Guido Buenstorf
    Abstract: This paper studies 40 years of evolution in the German laser industry to test the generality of evolutionary patterns observed in the U.S. laser industry. Key characteristics found in the U.S. industry are also present in Germany. There is sustained entry into the industry, and neither a shakeout nor first-mover advantages of early entrants are observed. A survival analysis finds that, similar to the U.S. industry, laser firm spin-offs have been systematically more successful than academic startups. Differences in survival and determinants of the spin-off process are traced for alternative kinds of spin-offs, including firms started by serial entrepreneurs.
    Keywords: Industry life cycle, submarkets, entrepreneurship, spin-offs, integrating distributors
    JEL: L10 M13 O33
    Date: 2006–01
  13. By: OECD
    Abstract: Services are the main drivers of economic growth in OECD countries and they are becoming increasingly innovative. This study analyses the role of open services markets in the transfer and diffusion of technology from developed countries to developing countries. It first explores how trade in services increases exposure to foreign technologies. The four modes of supply of services, as defined in the General Agreement on Trade in Services (GATS), are closely interlinked with the main channel of technology diffusion identified in the economic literature. The report then investigates how open services markets can reduce the cost of technology transfer and help to build better absorptive capacities in five sectors (business services, telecommunications, financial services, higher education and training, and logistics services). The last part of the study highlights the productivity gains from services trade liberalisation and the technological spillovers inside the receiving economy. The report shows that emphasis should be placed on services in the debate on trade and growth and that services liberalisation in key sectors, which facilitate the exchange of knowledge between foreign and domestic companies, can have a significant impact on technology diffusion.
    Keywords: growth, productivity, services, linkages, trade liberalisation, technology transfer
    Date: 2006–01–27
  14. By: Ron A. Boschma; Jesse W.J. Weltevreden
    Abstract: The paper analyses from an evolutionary perspective how retailers respond and adapt to b2c e-commerce. As such, the paper explores the diversity of behavior of retailers with respect to the adoption of e-commerce. More in particular, it examines empirically the extent to which the adoption of Internet strategies is affected by firm-specific features (e.g., habits of the entrepreneur, routines of firms), network relationships, and geographical proximity. Logistic regression analyses of 643 independent retailers in the Netherlands suggest that geography matters, controlling for other factors. That is, the probability of having an Internet strategy increases significantly when (a) the more knowledge spillovers are locally available; (b) the more demanding local customers are; and (c), the less rivalry is present locally.
    Keywords: evolutionary economics, Internet strategies, retailers, city centres, the Netherlands
    JEL: A12 D21 L81 R00
    Date: 2006–01
  15. By: Joëlle Noailly; Daniël Waagmeester; Bas Jacobs; Marieke Rensman; Dinand Webbink
    Abstract: Scarcity of science and engineering (S&E) graduates could potentially call for government intervention, because of the role of S&E's in R&D, and because R&D in turn is characterised by positive spillovers. In this report, we investigate whether policies that stimulate enrolment in S&E-studies are effective at increasing R&D-activity. First, we analyse the situation on the Dutch labour market for S&E graduates. We do not find evidence for scarcity of S&E graduates. Rather, the labour market position vis-à-vis other graduates weakened. A possible explanation to reconcile this conclusion with a widely felt concern of S&E shortages among employers is increasing internationalisation of the S&E labour market. Concerning policy, we argue that expanding the stock of S&E graduates is not very effective for boosting R&D activity. More than half the number of S&E graduates do not end up working in R&D. De increasing internationalisation of the S&E labour market can diminish the attractiveness of S&E courses.
    Keywords: R&D; education policy; science and engineering labour market
    JEL: O38 J31 H52
    Date: 2005–07

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