nep-ino New Economics Papers
on Innovation
Issue of 2006‒06‒03
seventeen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. The Influence of Geographic Clusters and Knowledge Spillovers on the Product Innovation Activities of New Ventures By Brett Anitra Gilbert; Mika Tatum Kusar
  2. Technological and Social Costs and Benefits of Patent Systems By Murat Yildizoglu; Thomas Vallée
  3. Rethinking the Dutch Innovation Agenda: Management and Organization Matter Most By Volberda, H.W.; Bosch, F.A.J. van den
  4. Technological Characteristics and R&D Alliance Form: Evidence from the U.S. Biotechnology Industry By Xia Wang
  5. Company R&D and University R&D - How Are They Related? By Charlie Karlsson; Martin Andersson
  6. How Rapidly Does Science Leak Out? By James D. Adams; J. Roger Clemmons; Paula E. Stephan
  7. Choosing Intellectual Protection: Imitation, Patent Strength and Licensing By David Encaoua; Yassine Lefouili
  8. International Firm Activities and Innovation: Evidence from Knowledge Production Functions for German Firms By Joachim Wagner
  9. Review of Workplace Skills, Technology Adoption and Firm Productivity: A Review By Sid Durbin
  10. Mergers and Innovation: The Case of the Pharmaceutical Industry By Ornaghi, Carmine
  11. Case Studies of Successful Companies in the Services Sector and Lessons for Public Policy By Deniz Eröcal
  12. An Empirical Analysis of the Propensity of Academics to Engage in Informal University Technology Transfer By Albert N. Link; Donald S. Siegel; Barry Bozeman
  13. Are Patents used to Suppress Useful Technology? By Howells, John
  14. The Impact of the Dutch Biopharmaceutical Industry on Regional Economic Development in the Randstad By Michael Sable
  15. Computer Investment, Computer Networks and Productivity By Sang Nguyen; B.K. Atrostic
  16. Improving National and Homeland Security through a proposed Laboratory for Information Globalization and Harmonization Technologies (LIGHT) By Choucri, Nazli; Madnick, Stuart; Siegel, Michael; Wang, Richard
  17. ICT loves agglomeration The urban impacts of ICT in the Netherlands By Otto Raspe; Frank Van Oort

  1. By: Brett Anitra Gilbert; Mika Tatum Kusar
    Abstract: Geographic clusters have an impressive track record for producing innovative firms. In this research, we examine whether a geographic cluster location and the knowledge spillovers new ventures assimilate influence both their explorative and exploitative innovation activities. We hypothesize a stronger relationship of industry clustering on exploitative innovations but a stronger relationship of knowledge spillovers on explorative innovations. We expect the interaction will result in more exploitative innovations than explorative innovations. The data support most hypotheses.
    Date: 2006–05
  2. By: Murat Yildizoglu; Thomas Vallée
    Abstract: "If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic 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." Machlup (1958) - cited by Hall (2002) <p>The demand for a stronger patenting system has become in the recent period a major source of tension between the U.S. government and the E.U. The US demand is generally motivated by the conventional economic wisdom affirming that a strong patenting system yields convenient incentives for the private investment in Research and Development (R&D) and hence, for technical progress in Society. This rather mechanistic approach of technological dynamics and of the role of the patenting is mainly based on the neoclassical theory of technical progress that strongly focuses on the agents' incentives rather than on the dynamics of the existent technological systems. Other appreciations of the existing patenting systems have nevertheless continued to be quite critical (see Machlup (1958) and Penrose (1951)). These appreciations are generally based on approaches where the nature of the actual technologies plays a central role. Moreover, the first part of the opinion emitted by Machlup in the above excerpt becomes very urgent since the question of establishing a strong patenting system is actually scrutinized for some industries in Europe (like the software industry) and in some countries (like Russia and China). We should hence consider the social costs of the patenting system, as well as its advantages, in order to guide such decisions. More specifically, it is time to seriously consider and check the old and new criticism of this system. The shortcomings of the standard wisdom have more recently been pointed out by Merges & Nelson (1990) and Mazzoleni & Nelson (1998). We propose to reassess the theoretical social value of patenting through a model founded on the approach adopted by these more empirical and conceptual studies. <p>We develop a simulation model based on the Nelson & Winter (1982), part V. This basic model is completed by a patent system that allows the protection of the innovations. We therefore use this model for evaluating the efficiency of this system under different technological conditions emphasized by Merges & Nelson (1990) and as a function of different dimensions of patents (mainly their length and their breadth). An econometric study of the results from Monte Carlo simulations is used to evaluate the determinants of the Social costs and benefits of patents. These social effects are mainly characterized at two levels: at the level of the efficiency of the technical progress in the industry, and at the level of the social surplus. <p>The neoclassical approaches conclude to a positive effect on both dimensions. Evolutionary approaches point at the contingency of these results with respect to the technological particularities of the industries. For example, Merges & Nelson (1990) distinguishes four classes of technologies in which the role of patents can be strongly contrasted: discrete inventions, cumulative technologies, chemical technologies and sciencebased technologies. We propose to include the specificities of these classes in our analysis, through different calibrations of the technology space of our industry dynamics model. The results of the simulations will then allow us to check the effectiveness of the patenting system in different configurations and with different characteristics measuring its strength. <p>References <p>Hall, B. (2002), "Current issues and trends in the economics of patents", Lecture to the ESSID Summer School in Industrial Dynamics <p>Hall, B. & Ham Ziedonis, R. M. (2001), The effects of strengthening patent rights on firms engaged in cumulative innovation: Insights from the semiconductor industry, in G. Libecap, ed., "Entrepreneurial Inputs and Outcomes: New Studies of Entrepreneurship in the United States", Vol. 13 of Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, Elsevier Science, Amsterdam. <p>Jaffe, A. B. (2000), "The u.s. patent system in transition: Policy innovation and the innovation process", Research Policy 29, 531–557. Machlup, F. (1958), "An economic review of the patent system", Study No. 15 of Commission on Judiciary, Sub comm. on Patents, Trademarks, and Copyrights, 85th Congress, 2d Session. <p>Mazzoleni, R. & Nelson, R. R. (1998), "The benefits and costs of strong patent protection: A contribution to the current debate", Research Policy 27, 273–284. <p>Merges, R. & Nelson, R. R. (1990), "On the complex economics of patent scope", Columbia Law Review 90, 839–916. <p>Nelson, R. R. & Winter, S. (1982), An Evolutionary Theory of Economic Change, The Belknap Press of Harvard University, London. <p>Penrose, E. (1951), The Economics of the International Patent System, John Hopkins University Press, Baltimore
    Keywords: Patent system, social welfare, public policy, intellectual property rights, industrial dynamics
    JEL: O31 O34 O38
    Date: 2004–08–11
  3. By: Volberda, H.W.; Bosch, F.A.J. van den (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In this essay, we challenge the present dominant emphasis in the Dutch Innovation Debate on the creation of technological innovations, the focus on a few core technologies, and the allocation of more financial resources. We argue that managerial capabilities and organizing principles for innovation should have a higher priority on the Dutch Innovation Agenda. Managerial capabilities for innovation deal with cognitive elements such as the capacity to absorb knowledge, create entrepreneurial mindsets, and facilitate managerial experimentation and higher-order learning abilities. These capacities can only be developed by distinctive managerial roles that enhance hierarchy, teaming and shared norms. Utilizing these unique managerial capabilities requires novel organizing principles, such as managing internal rates of change, nurturing self-organization and balancing high levels of exploration and exploitation. These managerial capabilities and organizing principles of innovation create new sources of productivity growth and competitive advantage. The dramatic fall back of the Netherlands in the league of innovative and high productivity countries of the World Economic Forum-Report can be mainly attributed to the present lack in the Netherlands of these key managerial and organizational enablers of innovation and productivity growth. We provide various levers for building unique managerial capabilities and novel organizing principles of innovation. Moreover, we describe the necessary roles that different actors have to play in this innovation arena. In particular, we focus on the often neglected but important role of strategic regulations that speed up innovation and productivity growth. They are the least expensive way to boost innovation in organizations in both the Dutch private and public sector. Finally, we discuss the implications for the Dutch Innovation Agenda. It should start with setting a challenging ambition, namely the return of The Netherlands within the WEF- league of the top-ten most innovative and productive countries of the world. Considering the under-utilization of available knowledge stemming from technological innovations, managerial and organizational determinants of innovation should receive first priority. These determinants have a high strategic relevance and should receive more public recognition. We suggest to organize an annual innovation ranking of the most outstanding Dutch firms, to develop an innovation audit that measures firms? non-technological innovation capacity, and to create an overall innovation policy for fast diffusion of new managerial capabilities and adequate organizing principles throughout the Dutch private and public sector. In conclusion, we add five new items to the Dutch Innovation Agenda: 1. Prioritize administrative innovations Investments in management and organization determinants of absorption of knowledge and its successful application (administrative innovation) should have a higher priority than investments in technological innovations. 2. Build new managerial capabilities and develop novel organizing principles For these administrative innovations to succeed, firms have to build managerial capabilities (broad knowledge-base, absorptive capacity, managerial experimentation, higher-order learning) and various management roles (hierarchy, teaming, shared norms) to increase the assimilation of external knowledge and the utilization for innovation. Moreover, they have to develop novel organizing principles that increase internal rates of change, nurture self-organization and synchronize high levels of exploration and exploitation. 3. Set levers of innovation by creating selection environments that favor innovation and by redefining the roles of key actors Management has to create a proper organizational context to foster entrepreneurship and innovation (internal selection environment). Governmental agencies have to focus on innovation and productivity enabling strategic regulations (external selection environment). Moreover, research institutes, business schools, and consulting firms should not only focus on technological knowledge, but also on managerial and organizational knowledge for innovation. In the end, private small and large firms and public institutions have to recognize that they all must contribute to the national goal of increasing innovation and productivity growth. 4. Create a new challenging national ambition: return of the Netherlands within the top-10 The Netherlands has to return to the top-ten most innovative and productive countries in the world as reflected in international rankings such as the World Economic Forum?s Global Competitiveness Index. 5. Proliferate an awareness and passion for innovation: Create public awareness and recognition of the societal relevance of outstanding managerial capabilities and organizing principles to innovation and productivity growth: o Initiate a Dutch innovation ranking in terms of management and organization; o Develop proper assessment tools for innovations in management and organization; o Enhance reporting on the progress on managerial and organizational innovation as part of modern corporate governance and as part of outstanding annual reports. These issues may contribute to rethinking the fundamental sources of innovation, productivity growth and sustainable competitive advantage of the Dutch economy.
    Keywords: strategy innovation;dynamic capabilities;organizing pinciples;srategic rgulation;mANAGEMENT;knowledge transfer;mindsets;exploration;exploitation;
    Date: 2004–01–27
  4. By: Xia Wang (University of Connecticut)
    Abstract: This study seeks to advance and test the knowledge-based theory of the firm as it applies to explaining the governance structure of R&D alliances. Unlike transaction-cost economics, the knowledge-based theory attempts to explain organizational form not primarily in terms of incentive misalignment but in terms of the creation, acquisition, and coordination of productive capabilities. To study the role played by firm-specific technological competencies, I consider three technological characteristics of an alliance: technological similarity, technological relatedness, and technological diversity. With a sample of 111 biotech-biotech R&D alliances, I find that technological relatedness and diversity increase the probability that allying firms would select the higher integration mode. Technological similarity, though, bears a non-monotonic relationship with organizational choice. Overall, the results support the knowledge-based argument that the idiosyncrasy in technological traits influences which type of alliance forms would be selected by allying firms.
    Keywords: technology, governance, alliance, R&D
    JEL: L22 O32 L65
    Date: 2005–08
  5. By: Charlie Karlsson; Martin Andersson
    Abstract: At the same time as we can observe strong tendencies of a globalisation of R&D, we also can observe a strong spatial clustering of R&D and related innovative activities. The standard explanation in the literature of the clustering of innovative activities is that such clusters offer external knowledge economies to innovative companies, since they are dependent upon knowledge flows and that knowledge flows are spatially bounded. Obviously, location is crucial in understanding knowledge flows and knowledge production, since knowledge sources have been found to be geographically concentrated. There are two major performers of R&D: industry and universities. It seems rather straight-forward to assume that industrial R&D might be attracted to locate near research universities doing R&D in fields relevant to industry. Already as far back as in the 1960s a number of case studies confirmed the important roles played by Stanford University and MIT for commercial innovation and entrepreneurship. During the years a large number of formal studies have presented evidences of a positive impact of university R&D on firm performance. The question is, does it also work the other way around? Does industrial R&D function as an attractor for university R&D? We may actually think of several reasons why university R&D may grow close to industry R&D. First of all political decision-makers may decide to start or expand university R&D at locations where industry already is doing R&D. Secondly, we can imagine that industry doing R&D in a region might use part of their R&D funds to finance university R&D. Thirdly, universities in regions with industrial R&D might find it easier to attract R&D funds from national and international sources due to co-operation with industry. Obviously, not all types of university R&D attract industrial R&D. There are reasons to believe that, in particular, university R&D in natural, technical and medical sciences attracts industrial R&D but that there are also strong reasons to believe that there are variations between different sectors of industry regarding how dependent their R&D is to be located close to university R&D. The above implies that there are behavioural relationships between industrial R&D and university R&D and vice versa. However, the litrature contains few studies dealing with this problem. Most studies have concentrated on the one-directional effect from university R&D to industrial R&D and the outputs of industrial R&D in most cases measured in terms of the number of patents and neglected the possible mutual interaction. However, if there is a mutual interaction between university and industry R&D, and if there are knowledge externalities involved, then we can develop a dynamic explanation to the clustering of innovative activities based on positive feedback loops. This would imply strong tendencies to path dependency and that policy initiatives to transfer non-innovative regions to innovative regions would have small chances to succeed. The fact that knowledge flows seem to be spatially bounded implies that proximity matters. Most contributions analysing spatial knowledge flows have used very crude measures of proximity. However, there are some authors that have argued that proximity could be measured using accessibility measures. Accessibility measures can be used to model interaction opportunities at different spatial scales: local, intra-regional and inter-regional. The purpose of this paper is to analyse the locational relationship between industry R&D and university R&D in Sweden using a simultaneous equation approach and to analyse existing differences between different science areas and different industry sectors.
    Date: 2005–08
  6. By: James D. Adams (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); J. Roger Clemmons (Institute for Child Health Policy, College of Medicine of the University of Florida); Paula E. Stephan (Georgia State University)
    Abstract: In science as well as technology, the diffusion of new ideas influences innovation and productive efficiency. With this as motivation we use citations to scientific papers to measure the diffusion of science through the U.S. economy. To indicate the speed of diffusion we rely primarily on the modal or most frequent lag. Using this measure we find that diffusion between universities as well as between firms and universities takes an average of three years. The lag on science diffusion between firms is 3.3 years, compared with 4.8 years in technology for the same companies using the same methodology. Industrial science diffuses fifty per cent more rapidly than technology, and academic science diffuses still faster. Thus the priority publication system in science appears to distribute information more rapidly than the patent system, although other interpretations are possible. We also find that the speed of science diffusion in the same field varies by a factor of two across industries. The industry variation turns out to be driven by frictional publication lags and firm size in R&D and science. Friction increases the lag, but firm size in R&D and science decrease it. Industries having a lot of R&D or science and composed of fields with little friction exhibit rapid diffusion. Industries where the reverse is true exhibit slow diffusion.
    JEL: L3 O3
    Date: 2006–05
  7. By: David Encaoua; Yassine Lefouili
    Abstract: This paper investigates the choice of an intellectual protection regime for a process innovation. We set up a multi-stage model in which choosing between patent and trade secrecy is affected by three parameters: the patent strength defined as the probability that the right is upheld by the court, the cost of imitating a patented innovation relative to the cost of imitating a secret innovation, and the innovation size defined as the extent of the cost reduction. The choice of the protection regime is the result of two effects: the damage effect evaluated under the unjust enrichment doctrine and the effect of market competition that occurs under the shadow of infringement. We find that large innovations are likely to be kept secret whereas small innovations are always patented. Furthermore, medium innovations are patented only when patent strength is sufficiently high. Finally, we investigate a class of licensing agreements used to settle patent disputes between patent holders and their competitors.
    Keywords: patent, trade secrecy, imitation, licensing
    JEL: D45 L10 O32 O34
    Date: 2006
  8. By: Joachim Wagner
    Abstract: Using a knowledge production framework and a rich set of plant level data this study demonstrates that in Germany firms that are active on international markets as exporters or foreign direct investors do generate more new knowledge than firms which sell on the national market only. These differences are not only due to a larger firm size, or different industries, or the use of more researchers in these firms, but due to the fact these globally engaged firms learn more from external sources, too. The importance of these knowledge sources varies with the type of innovation. These results, which are broadly in line with the findings of a recent study using UK firm level data, can help to explain the strong positive correlation between productivity and international activities of firms. Firms that are active on markets beyond the national borders generate higher levels of new knowledge that feed into higher productivity.
    Keywords: Exports, foreign direct investment, knowledge production function, Germany
    JEL: F14 F23 O31
    Date: 2006–05
  9. By: Sid Durbin (New Zealand Treasury)
    Abstract: The way that skills contribute to productivity improvements in firms is still something of a "black box". There is general agreement that human capital (broadly defined) is important for growth. Less is known about the ways in which skills and knowledge contribute to a firm’s pursuit of efficiency in production, the process of innovation and technology adoption, and to the take-up of market opportunities. This paper reviews literature on the types of skills utilised by firms, the mechanisms by which skills contribute to firm productivity, and how skills are acquired. It identifies potential policy implications relating to work based skills training.
    Keywords: technological change, human capital; labour productivity; multifactor productivity; firm productivity; workplace productivity; skills
    JEL: D21 D24 J24 L19 O30
    Date: 2004–09
  10. By: Ornaghi, Carmine
    Abstract: This paper takes a new look at the effects of mergers on innovation by analysing the relationship between ex-ante technological (and product) relatedness of acquirers and targets and post-merger performances. The analysis is conducted using data on consolidations in the pharmaceutical industry for the period 1988-2004. Empirical results show that merger deals are more likely to be signed between firms with related technologies and drug portfolio. I .find that merged companies have on average, worst performances than the group of non-merging firms and that, contrary to what may be the common wisdom, higher levels of technological relatedness are associated with poorer performances. Finally, consolidations between large pharmaceutical companies seem to have a detrimental impact on the incentives of competitors to undertake research in those therapeutic areas where both acquirer and target are active players.
  11. By: Deniz Eröcal
    Abstract: The success of individual firms can illustrate lessons learned from economy-wide research on how public policy and private company policy affect the development of the services sector. This review of some 14 case studies of large international services firms shows that three factors are common to their success: (1) Many successful services companies examined owe their existence and success to the opening up of markets; (2) The opening up of markets enabled new entrants to take another step towards success, namely innovation. Such innovation — either in terms of processes or products — helps firms to differentiate themselves from other, often more traditional, firms. The strong focus on innovation is often associated with an important role of venture or risk capital. In many cases, successful services firms were also pioneers in introducing information and communication technology (ICT) and developing other key technology applications; and (3) A motivating work organisation. Firm case studies also highlight the importance of factors internal to a firm, notably the organisation of work, entrepreneurial management, the motivation of workers, and the company culture. These factors differ considerably across firms, but may include the decentralisation of responsibilities and flat hierarchies, compensation according to performance or compensation aimed at achieving worker loyalty (e.g. through profit sharing or stock options). Public policies related to innovation, ICT or work organisation, are important for company success in many cases, but almost always in a context of open and contestable markets. <P>Etudes de cas d'entreprises à succès dans le secteur des services et enseignements pour les pouvoirs publics La réussite de certaines entreprises peut servir à illustrer les enseignements tirés d’une étude macroéconomique sur les effets que les politiques menées par les pouvoirs publics et les entreprises peuvent avoir sur le développement du secteur des services. Cette synthèse de quelque 14 études de cas portant sur de grandes entreprises internationales de services fait ressortir trois facteurs communs de réussite : (1) bon nombre des entreprises de services examinées doivent leur existence et leur succès à l’ouverture des marchés ; (2) celle-ci a permis à de nouveaux entrants de miser sur un autre atout pour réussir, à savoir l’innovation. Cette innovation – de procédés ou de produits – aide ces entreprises à se différencier des autres, souvent plus classiques dans leur fonctionnement. La place importante faite à l’innovation est souvent associée au rôle du capital-risque. Beaucoup d’entreprises de services florissantes ont été parmi les premières à adopter les technologies de l’information et de la communication (TIC) et à mettre au point d’autres applications décisives de la technologie ; (3) une organisation du travail motivante. Les études de cas sur les entreprises mettent également en évidence l’importance de facteurs internes, notamment l’organisation du travail, l’esprit d’entreprise, la motivation du personnel et la culture d’entreprise. Ces facteurs varient considérablement selon les entreprises, mais ils peuvent aussi faire intervenir la décentralisation des responsabilités, la réduction des niveaux hiérarchiques, un système de rémunération au rendement ou axé sur la fidélisation du personnel (par exemple, par un régime d’intéressement ou de stockoptions). Les politiques publiques concernant l’innovation, les TIC ou l’organisation du travail sont souvent importantes pour la réussite des entreprises, mais c’est presque toujours dans le cadre de marchés ouverts et contestables.
    Date: 2005–06–15
  12. By: Albert N. Link (Department of Economics, University of North Carolina at Greensboro, NC, USA); Donald S. Siegel (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Barry Bozeman (Department of Public Administration and Policy, University of Georgia, Athens, GA 30602, USA)
    Abstract: Formal university technology transfer mechanisms, through licensing agreements, research joint ventures, and university-based startups, have attracted considerable attention in the academic literature. Surprisingly, there has been little systematic empirical analysis of the propensity of academics to engage in informal technology transfer. This paper presents empirical evidence on the determinants of three types of informal technology transfer by faculty members: knowledge transfer, joint publications with industry scientists, and consulting. We find that male and tenured faculty members are more likely to engage in all three forms of informal technology transfer. We also find that academics who allocate a relatively higher percentage of their time to grants-related research are more likely to engage in informal commercial knowledge transfer.
    JEL: M13 D24 L31 O31 O32
    Date: 2006–05
  13. By: Howells, John (Department of Organisation and Management, Aarhus School of Business)
    Abstract: This article examines the evidence behind claims that innovation is <p> hindered or blocked (termed technology suppression) by <p> corporations’ use of patents. In other words, are there ways in <p> which the exploitation of the exclusive development right of the <p> patent can be shown to retard the process of innovation, other than <p> in the trivial sense of excluding third parties from the right to <p> develop the technology covered by the patent? There are many <p> references to this possibility in the management, economic and <p> legal literatures, but two papers stand out for grounding their claims <p> of corporate suppression of innovation in the historical record <p> (Dunford 1987; Merges and Nelson 1990). Historical writing is the appropriate form of evidence bearing on how companies have made <p> use of their patents, but this paper shows that in Dunford and <p> Merges and Nelson’s writing the historical evidence has been <p> misinterpreted as providing evidence of technology suppression. <p> What it really reveals are a variety of practical problems in the <p> administration of the patents system as a system of development <p> prospects. <p> In the first sections of this paper the ground is prepared by a brief <p> review of the nature of property rights and the changing view of the <p> function of the patent system in the literature. This argues that the <p> development prospect function of patents must be considered a <p> feature of significant patent development. Then follows a detailed <p> reexamination of the claims for technology suppression in the <p> commonly cited historical cases. These are organised to cover the <p> major ‘development scenarios’ involving: ‘pioneer’, or platform <p> technology patents; multiple, necessary, but independently held <p> patents (eg. radio); the hundreds of minor patents in the so-called <p> ‘patent thicket’.2 <p> The empirical reanalysis confirms that most claims of deliberate <p> corporate technology suppression are the product of a misinterpretation <p> of the evidence. The interpretation that patents have <p> been used to retard technology development is found to have been <p> promoted by a number of features of the literature; <p> 1) the widespread belief, especially amongst economic analysts, <p> that a patent is a form of economic monopoly <p> 2) basic features of property law most pertinent to the function of <p> patents have been forgotten within the contemporary legal <p> literature <p> 3) some of the historical accounts themselves are confused in their <p> use of the term ‘competition’ and in their understanding of <p> patents as property <p> 4) the longstanding, hostile US anti-trust treatment of patents, itself <p> a product of the assumption that patents are conducive to the <p> formation of economic monopoly. Merges and Nelson argue that the cases of radio, the Selden <p> patent, Edison’s carbon filament patent and the Wright brothers’ <p> warped wing patent illustrate the general problem that awarded <p> patent scope tends to be excessively broad. In contradiction to their <p> position, it is shown here that these cases illustrate a range of <p> idiosyncratic problems in the administration of the patent system <p> that generated unusually severe conflicts between awarded scope <p> and technology development. The general problem is not an <p> excessive award of ‘broad scope’, but the ability of Patent Offices <p> and courts to maintain the patent institution as an effective system <p> of development prospects. In particular problem cases, one must <p> consider the reasons why the patent failed to act as a proper <p> development prospect and devise a tailored policy solution with the <p> object of retaining the development prospect function as much as <p> possible. <p> This revision therefore reinforces an understanding of the patent <p> system as a system of property rights that in principle, and usually <p> in practice, is an effective social device to aid the exploration and <p> exploitation of novel technical ideas (inventions).
    Keywords: No keywords;
    Date: 2005–11–01
  14. By: Michael Sable
    Abstract: The nature of economic development in advanced and developing economies alike has changed dramatically during the last generation as high-technology/knowledge-intensive industries have had a profound impact upon the way that people work and live. As The Economist has noted: “America gets more than half its economic growth from industries that barely existed a decade ago—such is the power of innovation, especially in the information and biotechnology industries.” The first phase of this revolution stemmed from the dramatic impact of information technologies such as the personal computer, software, the Internet, and now wireless communications. During the 1990s, an unprecedented stock market boom in the United States was driven by investment in these technologies. India, a country as poverty-stricken as any, has become an economic power because of its ability to effectively participate in the global information technology value chain. However, at present, the most important and the fastest growing segment of this emergent knowledge economy is biotechnology. While scientific knowledge as a whole has been doubling every ten years, it has been doubling every five years in the field of biology. The result has been a technological renaissance in biotechnology-related fields ranging from bioinformatics to biopharmaceuticals. This biotechnology-driven renaissance is reflected in the dramatic race to map the human genome and in the many new drugs that are influencing mankind’s quality of life. The astounding rate of growth in this industry and a general desire to partake of its lucrative economic bounty has led national and regional governments to focus on the development of biotechnology clusters as a catalyst for regional economic development. Indeed, a survey of 77 local and 36 state economic development agencies in the U.S. reported that 83% have listed biotechnology as one of their top two targets for industrial development. For example, St. Louis, Missouri has sought to become a player in the field of agricultural biotechnology by creating a biotech cluster in the heart of its long-neglected inner-city. Outside the United States, Singapore has launched Biopolis, an 18.5 hectare, $300 million science park devoted exclusively to biomedical research and development; while neighboring Malaysia is doing the same with its BioValley Initiative. Thus, this keen focus on biotechnology is increasingly reshaping the physical environment of cities—both poor and rich—as they seek to become players in a lucrative industry of the future. Recently, continental Europe has also made a bid to become a dynamic player in the biotechnology industry as evidenced by the BioPartner Initiative of the Netherlands. How is this industry affecting the urban milieu? What is the impact of a particular high-technology industry—biotechnology--on regional economic development? Why have some areas been more successful than others in cultivating and developing biotechnology clusters? This paper will examine the evolution of the Dutch biopharmaceutical industry and its impact on regional economic development (real estate and labor markets) in the Randstad. Hypothesis: This dissertation is an examination of the consequences vis a vis regional economic development of biopharmaceutical clusters in the Randstad region of the Netherlands. These clusters are at different stages of evolution in respect to more advanced areas such as the United States and the UK; and are affected by a distinct policy environment. The clusters to be analyzed are situated in the polynuclear area of the Netherlands’ Randstad. The historical dynamics of the biotechnology industry as well as the specific costs and benefits that it imposes upon the labor and real estate markets in this area will be assessed. The central hypotheses of this study is that the unique characteristics of the biotechnology industry is leading to gentrification (real estate impact); and that the biotechnology industry promotes bifurcation in the urban labor market as it enhances job growth amongst the highly skilled but is not a significant source of employment for the low and semi-skilled. The aforementioned gentrification hypothesis is built upon the anchor tenant hypothesis posited by Prof. Maryann Feldman in “The Locational Dynamics of the U.S. Biotech Industry: Knowledge Externalities and the Anchor Hypothesis.” Therein Dr. Feldman argues that an anchor tenant’s brand recognition creates an externality for smaller stores who realize greater sales volume than they would in other locations. The value of this externality is reflected in higher rents the average tenant pays in comparison to the rent paid by the anchor tenant. This form of price discrimination reflects a willingness of the average tenants to pay a premium for location near the anchor tenant. Universities, hospitals and other components of the biotechnology cluster have the capacity to play the role of the anchor tenant, which is having a dramatic impact on the real estate and labor markets in the areas around biotech clusters.
    Date: 2005–08
  15. By: Sang Nguyen; B.K. Atrostic
    Abstract: Researchers in a large empirical literature find significant relationships between computers and labor productivity, but the estimated size of that relationship varies considerably. In this paper, we estimate the relationships among computers, computer networks, and plant-level productivity in U.S. manufacturing. Using new data on computer investment, we develop a sample with the best proxies for computer and total capital that the data allow us to construct. We find that computer networks and computer inputs have separate, positive, and significant relationships with U.S. manufacturing plant-level productivity. Keywords: computer input; information technology; labor productivity
    Keywords: computer input; information technology; labor productivity
    Date: 2005–01
  16. By: Choucri, Nazli; Madnick, Stuart; Siegel, Michael; Wang, Richard
    Abstract: A recent National Research Council study found that: "Although there are many private and public databases that contain information potentially relevant to counter terrorism programs, they lack the necessary context definitions (i.e., metadata) and access tools to enable interoperation with other databases and the extraction of meaningful and timely information" [NRC02, p.304, emphasis added] That sentence succinctly describes the objectives of this project. Improved access and use of information are essential to better identify and anticipate threats, protect against and respond to threats, and enhance national and homeland security (NHS), as well as other national priority areas, such as Economic Prosperity and a Vibrant Civil Society (ECS) and Advances in Science and Engineering (ASE). This project focuses on the creation and contributions of a Laboratory for Information Globalization and Harmonization Technologies (LIGHT) with two interrelated goals: (1) Theory and Technologies: To research, design, develop, test, and implement theory and technologies for improving the reliability, quality, and responsiveness of automated mechanisms for reasoning and resolving semantic differences that hinder the rapid and effective integration (int) of systems and data (dmc) across multiple autonomous sources, and the use of that information by public and private agencies involved in national and homeland security and the other national priority areas involving complex and interdependent social systems (soc). This work builds on our research on the COntext INterchange (COIN) project, which focused on the integration of diverse distributed heterogeneous information sources using ontologies, databases, context mediation algorithms, and wrapper technologies to overcome information representational conflicts. The COIN approach makes it substantially easier and more transparent for individual receivers (e.g., applications, users) to access and exploit distributed sources. Receivers specify their desired context to reduce ambiguities in the interpretation of information coming from heterogeneous sources. This approach significantly reduces the overhead involved in the integration of multiple sources, improves data quality, increases the speed of integration, and simplifies maintenance in an environment of changing source and receiver context - which will lead to an effective and novel distributed information grid infrastructure. This research also builds on our Global System for Sustainable Development (GSSD), an Internet platform for information generation, provision, and integration of multiple domains, regions, languages, and epistemologies relevant to international relations and national security. (2) National Priority Studies: To experiment with and test the developed theory and technologies on practical problems of data integration in national priority areas. Particular focus will be on national and homeland security, including data sources about conflict and war, modes of instability and threat, international and regional demographic, economic, and military statistics, money flows, and contextualizing terrorism defense and response. Although LIGHT will leverage the results of our successful prior research projects, this will be the first research effort to simultaneously and effectively address ontological and temporal information conflicts as well as dramatically enhance information quality. Addressing problems of national priorities in such rapidly changing complex environments requires extraction of observations from disparate sources, using different interpretations, at different points in times, for different purposes, with different biases, and for a wide range of different uses and users. This research will focus on integrating information both over individual domains and across multiple domains. Another innovation is the concept and implementation of Collaborative Domain Spaces (CDS), within which applications in a common domain can share, analyze, modify, and develop information. Applications also can span multiple domains via Linked CDSs. The PIs have considerable experience with these research areas and the organization and management of such large scale international and diverse research projects. The PIs come from three different Schools at MIT: Management, Engineering, and Humanities, Arts & Social Sciences. The faculty and graduate students come from about a dozen nationalities and diverse ethnic, racial, and religious backgrounds. The currently identified external collaborators come from over 20 different organizations and many different countries, industrial as well as developing. Specific efforts are proposed to engage even more women, underrepresented minorities, and persons with disabilities. The anticipated results apply to any complex domain that relies on heterogeneous distributed data to address and resolve compelling problems. This initiative is supported by international collaborators from (a) scientific and research institutions, (b) business and industry, and (c) national and international agencies. Research products include: a System for Harmonized Information Processing (SHIP), a software platform, and diverse applications in research and education which are anticipated to significantly impact the way complex organizations, and society in general, understand and manage critical challenges in NHS, ECS, and ASE.
    Keywords: Homeland Security, Information Globalization and Harmonization Technologies,
    Date: 2004–11–30
  17. By: Otto Raspe; Frank Van Oort
    Abstract: Information and Communication Technology (ICT) has had an undeniable impact on our society. Some people argue that technology has projected us onto a new wave of social and cultural change. Nevertheless, despite the growth of technology and the social significance of its applications, we have only a poor grasp of its actual impact on the use of physical space. The key question addressed in this paper is therefore: how will ICT influence the spatial-economic patterns of business activities in the Netherlands? In offering answers to this question, the paper develops a conceptual framework that distinguishes two roles of ICT in spatial-economic development: that of a ‘motor’, enhancing productivity and encourages the development of economic sectors, and that of an ‘enabler’ (of e-work, e-commerce and e-business), which may lead households and firms to adopt a different attitude to space requirements. The paper is based on a thorough survey of the current literature on the subject, the results of a recent survey of ICT’s impact on society, and original empirical research into specific factors such as ICT companies’ location preferences and the willingness of knowledge workers to commute. The paper presents an assessment of the usefulness of these concepts in terms of the Dutch situation, both today and in the future. We conclude that Information and Communication Technology has not yet had a marked visible impact on the use of space. To the contrary, despite predictions neither Dutch companies (particularly those in the ICT sector) nor knowledge workers display any unusual degree of mobility at the local or regional s 2perfect substitute for ‘traditional’ behavioural patterns. Nevertheless, there are clear indications that the ‘spatial order’ of the Netherlands is likely to change. Although it is likely that ICT will consolidate underlying spatial patterns, on the regional aggregate changes are occurring within those patterns. While (inner) cities have traditionally been the breeding ground for new ICT companies, this function has now largely been taken over by the outlying city regions, in which multiple clusters of economic activity are emerging: a process of ‘splintering urbanism’. However, despite this regionalized pattern of deconcentration, the traditional city centres continue to fulfil a number of essential functions. These centres remain the meeting places, and the shopping and entertainment centres for businesses and households (the ‘Consumer City’). In the processes of deconcentration and multimodality, ICT should be seen to play an important facilitating and strengthening role. cale. ICT does not function as a 2perfect substitute for ‘traditional’ behavioural patterns. Nevertheless, there are clear indications that the ‘spatial order’ of the Netherlands is likely to change. Although it is likely that ICT will consolidate underlying spatial patterns, on the regional aggregate changes are occurring within those patterns. While (inner) cities have traditionally been the breeding ground for new ICT companies, this function has now largely been taken over by the outlying city regions, in which multiple clusters of economic activity are emerging: a process of ‘splintering urbanism’. However, despite this regionalized pattern of deconcentration, the traditional city centres continue to fulfil a number of essential functions. These centres remain the meeting places, and the shopping and entertainment centres for businesses and households (the ‘Consumer City’). In the processes of deconcentration and multimodality, ICT should be seen to play an important facilitating and strengthening role.
    Date: 2004–08

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