nep-ino New Economics Papers
on Innovation
Issue of 2006‒03‒05
eleven papers chosen by
Koen Frenken
Universiteit Utrecht

  1. The Structure and Evolution of Industrial Clusters: Transactions, Technology and Knowledge Spillovers By Simona Iammarino; Philip McCann
  2. Persistence of Innovation in Dutch Manufacturing: Is it Spurious? By Raymond Wladimir; Mohnen Pierre; Palm Franz; Schim van der Loeff Sybrand
  3. Patent Citations, the Value of Innovations and Path-Dependency By Bulat Sanditov
  4. The 'sponge' organisation: A creativity-based reflection on the innovative and sustainable firm By Rodriguez, Miguel A.; Ponti, Franc; Ayuso, Silvia
  5. The impact of corporate governance practices on R&D intensities of firms: An econometric study on French largest companies By Stéphane Lhuillery
  6. Labour Mobility of Academic Inventors. Career Decision and Knowledge Transfer By Gustavo A. Crespi; Aldo Geuna; Lionel J. J. Nesta
  7. Biotechnology Alliances in the European Pharmaceutical Industry: Past, Present and Future By Jacqueline Senker
  8. Mainstreaming New Renewable Energy Technologies By Karsten Neuhoff; Rick Sellers
  9. Environmental Innovation, War of Attrition and Investment Grants By Cesare Dosi; Michele Moretto
  10. The limits of modularity in innovation and production By Leonardo Bargigli
  11. The Legal Issues Surrounding Free and Open Source Software: Challenges and Solutions for the Government of Québec By Pierre-Paul Lemyre; Richard Willemant

  1. By: Simona Iammarino (SPRU, University of Sussex); Philip McCann (University of Reading)
    Abstract: In this paper we investigate the relationship between location patterns, innovation processes and industrial clusters. In order to do this we extend a transactions costs-based classification of industrial clusters into a knowledge-based taxonomy of clusters, along the lines suggested by a critical revision of the main assumptions underlying most of the existing literature on spatially defined clusters. Our arguments show that the transactions costs approach and the innovation and technological change framework are broadly consistent, and that real insights into the microfoundations, nature, and evolution of clusters can be provided by these classification systems.
    Keywords: industrial clusters, firm location, innovation processes, cluster classification
    JEL: O31 O33 R3 D8
    Date: 2006–02–27
  2. By: Raymond Wladimir; Mohnen Pierre; Palm Franz; Schim van der Loeff Sybrand (METEOR)
    Abstract: This paper studies the persistence of innovation and the dynamics of innovation output in Dutch manufacturing using firm data from three waves of the Community Innovation Surveys (CIS), pertaining to the periods 1994-1996, 1996-1998, and 1998-2000. We estimate by maximum likelihood a dynamic panel data type 2 tobit model accounting for individual effects and handling the initial conditions problem. We find that there is no evidence of true persistence in achieving technological product or process innovations, while past shares of innovative sales condition, albeit to a small extent, current shares of innovative sales.
    Keywords: Economics ;
    Date: 2006
  3. By: Bulat Sanditov (CESPRI and MERIT, Bocconi University, Milano,Italy and Universiteit Maastricht.)
    Abstract: This paper examines how the framework of path-dependency and technological trajectories can be applied to explain the observed distribution of patent values as it is revealed in the distribution of patent citations. A very simple model of based on generalized Polya urn processes is proposed to describe evolution of patent values. It is shown that the model fits empirical distribution of patent citations (USPTO and EPO data) surprisingly well.
    Keywords: Size of Innovation, Patent Citations, Path-Dependency in Technical Change
    JEL: O31 O33
    Date: 2005–11
  4. By: Rodriguez, Miguel A. (IESE Business School); Ponti, Franc (EADA); Ayuso, Silvia (IESE Business School)
    Abstract: Nowadays, many companies striving for sustainability have developed new and effective communication channels with their stakeholders and, at the same time, successful innovation strategies. However, stakeholder engagement and innovation tend to be managed as parallel rather than interconnected activities within companies, and any link between them seems to be informal and tacit. The aim of this paper is to gain a deeper understanding of how companies' relationship with the environment can be harnessed for sustainable innovation. Given the scant experience of companies linking stakeholder dialogue and sustainable innovation, we decided to adopt an original and innovative research method based on gathering a group of managers from different companies and stimulating their imagination using creativity techniques. In this paper, we first describe the creative research method we used to explore how businesses can integrate stakeholder insights into the process of organisational innovation. Then we present the result of our research experiment: the model of the "sponge" organisation. Based on the experience and intuitively stimulated ideas of the project participants, we propose a definition -a list of values and principles, and important "hard" and "soft" attributes- of the ideal enterprise, i.e., one that uses its relationship with the environment as an essential innovation factor. Finally, we discuss the implications of this business concept and compare it with existing management literature.
    Keywords: sustainable development; stakeholders; environment; innovation; creativity;
    Date: 2006–01–24
  5. By: Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: Surveyed empirical studies on the influence of corporate governance on innovation tend to focus on specific dimensions of shareholders or boards. Their findings are mixed and inconclusive. We thus present a very recent number of papers that depart from board or shareholders’ characteristics, to focus on governance practices. Our empirical contribution uses a set of ratings given by experts and focuses on corporate governance practices with a sample of 6623 firms belonging to 110 large French groups. The relation between governance practices and R&D intensity, implementing different indexes and methods in order to improve the robustness of our results, is investigated in cross-section. We find that firms with governance practices that are shaped in order to defend shareholders’ rights are more R&D intensive. The highest the shareholder is taken into consideration by managers, the highest the R&D intensity will be. A second result suggests more surprisingly that the effect is non linear: whether the firms take care of their shareholders seriously or moderately has no differentiated impact on R&D expenditure. However, firms with fewer democratic practices are more likely to be less R&D intensive. This paper also investigates so called deficiencies in shareholder protection in Continental European systems compared to Anglo-Saxon systems. A significant difference in R&D intensity is found between French group listed only in France and French groups listed in New-York or London. The last result suggests that the impact of national systems of corporate governance on R&D and innovation may be strong; reinforcing the impact on R&D of the different applied governance practices. Further investigations show, however, that it is very difficult to identify what the best governance practices are, regarding the R&D expenditures. Provisions implemented at the board level are however found positively related to R&D intensity. Finally, our results also suggest that sample selection matters in this kind of empirical literature.
    Keywords: Corporate governance, R&D, innovation, provisions
    JEL: O31 O32 G31 G32
    Date: 2006–01
  6. By: Gustavo A. Crespi (SPRU, University of Sussex); Aldo Geuna (SPRU, University of Sussex); Lionel J. J. Nesta (Observatoire Francais des Conjonctures Economiques (OFCE))
    Abstract: This paper focuses on university inventors mobility in the EU countries. It is the first quantitative assessment of this phenomenon and is the basis for a set of econometric models that try to explain how different factors affect the mobility of academics and their choices: to stay, to move to the private sector, to move to a different public research organisation (including another university). Mobility away from academia is a significant phenomenon, at least for the sub-sample of university researchers that hold patents from the European Patent Office. Among other results, the econometric models provide some evidence that the more valuable the patent the higher the probability of a move to a company. We found that the younger researchers (with less experience and less seniority) are more likely to move, and tend to move soon after the application or the granting of a patent . Also, the more cumulative (or incremental) the knowledge, the higher the probability of moving to a company. Finally, in all models developed scientific and technological output and scientific quality seem not to have any impact (neither positive nor negative) on the mobility of academic inventors. These results are interpreted in the framework that combines aspects of career mobility and technology transfer.
    Keywords: university patenting, labour mobility, technology transfer, tacit knowledge, European universities
    JEL: O3 I28 J6
    Date: 2006–02–27
  7. By: Jacqueline Senker (SPRU, University of Sussex)
    Abstract: This paper reviews how research collaborations between dedicated biotechnology firms and multinational pharmaceutical companies have changed over the past 25 years. A discussion of the impact that developments in the biotechnology have had on the process of pharmaceutical R&D will set the context for reviewing the various theoretical approaches used to analyse and understand these alliances, identifying changes in the nature of alliances over time and indicating the future in store for dedicated biotechnology firms.
    Keywords: biotechnology, dedicated biotechnology firms, pharmaceuticals sector, post-genome era, research alliances
    JEL: O33 I10 D85
    Date: 2006–02–27
  8. By: Karsten Neuhoff; Rick Sellers
    Abstract: This paper outlines the benefits, obstacles and options for governments to support international markets for technology development. International markets for new energy technologies offer greater scope, thereby increasing the incentives and opportunities for technology improvements. As the market is supported by more independent governments, the confidence of technology developers and producers that future markets for their products will exist is increasing, thus enabling capital access and inducing R&D investment and exploration of improved production processes. The bigger markets also allow for international competition, thus allowing for the application of the best available technology. The government challenge to induce sufficient RD&D remains and with international markets the benefits and costs of national governments free-riding on international effort needs to be addressed. Finally, we discuss how international co-operation can be used to evolve the energy system in such a way that it can integrate new technologies at minimum cost.
    Keywords: Energy technology, Research and development, Deployment
    JEL: Q42 L94 D92
    Date: 2006–03
  9. By: Cesare Dosi; Michele Moretto
    Abstract: The paper analyses the timing of spontaneous environmental innovation when second-mover advantages, arising from the expectation of declining investment costs, increase the option value of waiting created by investment irreversibility and uncertainty about private payoffs. We then focus on the design of public subsidies aimed at bridging the gap between the spontaneous time of technological change and the socially desirable one. Under network externalities and incomplete information about firms' switching costs, auc- tioning investment grants appears to be a cost-effective way of accelerating pollution abatement, in that it allows targeting grants instead of subsidizing the entire industry indiscriminately
  10. By: Leonardo Bargigli (Department of Economc Sciences, Florence University, Italy)
    Abstract: Modularity has gained recently a growing attention in the management literature as a key to explain the contemporary trends of industrial dynamics, according to which external «market-based» economies have become predominant over internal «bureaucracy-based» economies. Nowadays global supply-networks play a key role for a large share of material and immaterial inputs in many sectors, and the diffusion of modular architectures for products, in connection with flexible production systems, is often indicated by the literature as the main driver for this change. In order to analyze better this connection, in this paper a model is presented which tries to focus on the factors that influence the competitive performance of internal versus outsourced production when the two options are subject to a trade-off with respect to the kind of innovation strategies they can use. In particular through a set of exploratory agent-based simulations we verify two hypotheses. The first one is the existence of a trade-off between decentralized search and complexity, as suggested by a recent strand of literature which has modeled innovation as a discovery process on complex fitness landscapes. The second one is a comparative advantage of centralized search, which occurs, for all levels of complexity, when the returns of innovation are lower. When the conditions just described occur in a competitive context, the limits of modularity become apparent.
    Keywords: Modular design, Product innovation, Networks
    JEL: L22 L15 C63
    Date: 2005–09
  11. By: Pierre-Paul Lemyre; Richard Willemant
    Abstract: The Government of Québec is slowly but surely turning its attention to the issue of free and open source software in response to the interest shown by Québec’s software industry and the attention paid to the phenomenon by governments around the world. This openness is easy to understand given an environment in which online service provision to citizens must be enhanced while minimizing expenditures on technology, curtailing service providers’ control over the administration, and promoting the development of the information society in Québec. Nonetheless, as we see in the news, adoption of this new attitude toward to software development is not always immune to legal challenges. Consequently, the manner in which Québec law interacts with free and open source software, as well as the associated risks, assume a particular significance.<P> The analysis we present here reveals that the law, as it currently stands in Québec, appears adequate to effectively address the various legal issues inherent in the use of free and open source software. First of all, no legal rule seems to be incompatible with the validity of free and open source licences, despite that fact that few of them were designed with the Québec legal system in mind. Moreover, both federal copyright rules and Québec regulations affecting contractual liability allow the authors and users of free and open source software to effectively preserve the freedom of computer code, which is typically the purpose of free and open source licences.<P>Nonetheless, it remains the case that some legal risks are associated with free and open source software. These risks may arise from the formalism requirements included in the Copyright Act, prior violations of intellectual property rights by third parties, or simply from the broader contractual protection afforded to licensors. Consequently, integrating free and open source software into the technology strategy of the Government of Québec requires setting up some initiatives to allow these risks to be mitigated as much as possible and to enable the management of those risks that cannot be completely eliminated. <P>
    Date: 2006–02–01

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