nep-ino New Economics Papers
on Innovation
Issue of 2006‒07‒02
nine papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Rough Road to Market: Institutional Barriers to Innovations in Africa By Oyelaran-Oyeyinka, Banji; Gehl Sampath, Padmashree
  2. Information and intellectual property: The global challenges By Aiyer Ghosh, Rishab; Soete, Luc
  3. Towards Patent Pools in Biotechnology? By Patrick Gaulé
  4. Empirical studies of innovation in the knowledge driven economy By Hall, Bronwyn; Mairesse, Jacques
  5. Innovativity: A comparison across seven European countries By Mohnen, Pierre; Mairesse, Jacques; Dagenais, Marcel
  6. Using stakeholder dialogue as a source for new ideas. A dynamic capability underlying sustainable innovation By Ayuso, Silvia; Rodriguez, Miguel A.; Ricart, Joan E.
  7. An Option-Based View of Imperfect Patent Protection By Philipp N. Baecker
  8. How Businesses Use Information Technology: Insights for Measuring Technology and Productivity By Sang Nguyen; B.K. Atrostic
  9. Which Workers Gain Upon Adopting a Computer? By Cindy Zoghi; Sabrina Wulff Pabilonia

  1. By: Oyelaran-Oyeyinka, Banji (UNU-MERIT); Gehl Sampath, Padmashree (UNU-MERIT)
    Abstract: Translating R&D and inventive efforts into a market product is characterized by significant financial skills, and the ability to overcome technical and instititonal barriers. Research into and translation of new technologies such as biotechnology products to the market requires even greater resources. This paper aims to understand the key factors that foster or hinder the complex process of translating R&D efforts into innovative products. Different pathways exist in developed countries such as firm-level efforts, the use of IPs, the spin-off of new firms that develop new products, or a mixture of these. Developing countries differ substantially in the kinds of instruments they use because of their considerably weaker institutional environment and for this reason our framework takes a systemic and institutional perspective. The paper comtributes to this issue by examining systemic institutional barriers to commercializing biotechnology in a develping context within a systems of innovation framework.
    Keywords: research and development, biotechnology, commercialization, innovation, Africa, learning, institution building
    JEL: O32 L65 O34 O17
    Date: 2006
  2. By: Aiyer Ghosh, Rishab (UNU-MERIT); Soete, Luc (UNU-MERIT)
    Abstract: The paper analyses the contribution of 'golden papers' - seminal works whose ideas remain as fresh and relevant today as when they were first published decades ago - and which continue to dominate academic discourse among successive generations of scholars. The authors analyse why two works written within an industrial development context: The simple economics of basic scientific research, by Richard Nelson (1959) and Kenneth Arrows Economic Welfare and the Allocation of Resources for Invention (1962), are so relevant in today’s knowledge-driven economic paradigm. Focusing on the papers’ application to current global policy debates on information/knowledge and intellectual property, they argue that while the context has changed the essential nature of innovation - driven by widespread access to the ability to replicate and improve - remains the same. Hence a focus on endogenous innovation policy is as relevant today as it was 50 years ago.
    Keywords: knowledge economy, science and technology, innovation, intellectual property rights, institutional change
    JEL: O31 O34 O32 O17
    Date: 2006
  3. By: Patrick Gaulé (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: We analyze the extent to which patent pools (agreements where patent holders agree to license their intellectual property as a package) could be used as an institution to facilitate technology transactions in biotechnology. Patent pools have been used with success in the consumer electronics and other sectors but they are untested in biotechnology despite their transaction cost reducing potential. We suggest two explanations for the fact that patent pools have not been used in this industry. The first is that the current antitrust requirements are difficult to meet in biotechnology. The second is the availability of simpler alternatives that will often be more profitable to patent holders: aggregation of rights by one party and cross-licensing.
    Keywords: patent pools, licensing, intellectual property management, biotechnology
    JEL: O32 O34 K11 K21
    Date: 2006–04
  4. By: Hall, Bronwyn (UNU-MERIT); Mairesse, Jacques (UNU-MERIT)
    Abstract: This introduction to a special issue of EINT surveys a collection of ten papers that study various aspects of innovation and knowledge management and their impact on performance at the firm level for a number of countries. These studies have been conducted using data drawn from innovation surveys combined with data from a number of other sources. The issue illustrates the value of these surveys in improving our understanding of innovation in firms and raises a number of questions for future work in this area.
    Keywords: innovation, knowledge management, knowledge economy, firm performance
    JEL: O32 O33 D8 L25
    Date: 2006
  5. By: Mohnen, Pierre (UNU-MERIT); Mairesse, Jacques (UNU-MERIT); Dagenais, Marcel (University of Montreal)
    Abstract: This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of innovativity comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large.
    Keywords: Innovation, Research and development, comparison, self-selection, Europe
    JEL: C35 L60
    Date: 2006
  6. By: Ayuso, Silvia (IESE Business School); Rodriguez, Miguel A. (IESE Business School); Ricart, Joan E. (IESE Business School)
    Abstract: This paper attempts to gain a deeper understanding of the firm's ability for integrating stakeholder insights into the process of organisational innovation within the context of sustainable development. Given the early stage of empirical research on the topic, we used an exploratory case study method of two Spanish companies that have successfully learned from stakeholder dialogue and have generated innovations that are both beneficial for the company and for sustainable development in general. The evidence from the two case studies suggests the existence of two simple capabilities - stakeholder dialogue and stakeholder knowledge integration - for generating innovations in accordance with stakeholder needs. Whereas stakeholder dialogue leverages organisational resources that promote two-way communication, transparency and appropriate feedback to stakeholders, stakeholder knowledge integration relies on non-hierarchical structures, flexibility and openness to change. The paper sheds some light on the under-researched issue of linking stakeholder dialogue and sustainable innovation, and contributes to opening the 'black box' of dynamic capabilities and advancing in the understanding of this fundamental organisational concept.
    Keywords: sustainable development; stakeholders; innovation; capabilities;
    Date: 2006–05–29
  7. By: Philipp N. Baecker (Department of Finance and Accounting, EUROPEAN BUSINESS SCHOOL (ebs), International University Schloß Reichartshausen)
    Abstract: Given a noticeable degradation of patent quality, patenting has come to resemble the purchase of a lottery ticket. Rising cost of engaging in litigation over intellectual property (IP) assets substantially diminishes their value as an incentive to invest in research (Lanjouw and Schankerman, 2001). The author proposes an option-based view (OBV) of imperfect patent protection as a formal strategic model of so-called probabilistic patents (Lemley and Shapiro, 2005), which may serve as a starting point for further investigations into the impact of patent risk on firm values and research incentives. More specifically, the real option approach is employed to demonstrate how, due to increased litigation activity in red oceans, rising profit rates may lead to falling patent values, calling for a careful tradeoff between reliable patent protection in mature markets and seemingly attractive business opportunities in industries such as pharmaceutical biotechnology.
    Keywords: capital budgeting, intellectual property, litigation, real options
    JEL: G31 O31 C73
    Date: 2006–06–23
  8. By: Sang Nguyen; B.K. Atrostic
    Abstract: Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use – computers linked into networks – is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
    Keywords: Information Technology, E-business Processes, Productivity
    Date: 2006–06
  9. By: Cindy Zoghi (U.S. Bureau of Labor Statistics); Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics)
    Abstract: Using the Canadian Workplace and Employee Survey and controlling for individual and establishment fixed effects, we find that within a year of adopting a computer, the average worker earns a 3.6 percent higher wage than a similar worker who did not adopt a computer. Returns are even larger for managers and professionals, highly educated workers, and those with significant prior computer experience. Employees who use computer applications that require high cognitive skills earn the highest returns.
    Keywords: Computer Use, Technology, Computer Applications
    JEL: J31 O30
    Date: 2006–06

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