nep-ino New Economics Papers
on Innovation
Issue of 2007‒06‒18
seventeen papers chosen by
Koen Frenken
Utrecht University

  1. Intellectual Property Rights and Crop-Improving R&D under Adaptive Destruction By Oleg Yerokhin; GianCarlo Moschini
  2. The Foundations of the Economics of Innovation By Antonelli Cristiano
  3. Breadth and Depth of Main Technology Fields: An empirical investigation using patent data By Muge Ozman
  4. The Conceptual Framework for Business Process Innovation: Towards a Research Program on Global Supply Chain Intelligence By Møller, Charles
  5. The effects of technology-as-knowledge on the economic performance of developing countries: An econometric analysis using annual publications data for Botswana, Namibia, and South Africa, 1976-2004 By Amavilah, Voxi Heinrich
  6. Should Finland Introduce an R&D Tax Credit? Reflections Based on Norwegian R&D Tax Policy By Jarle Møen
  7. Techonology Based Strategic Alliances: A Turkish Perspective By Akkaya, Cenk
  8. The Effects of Stronger Intellectual Property Rights on Technology Transfer: Evidence from Japanese Firm-level Data By Ryuhei Wakasugi; Banri Ito
  9. What Happened to the Knowledge Economy? ICT, Intangible Investment and Britain’s Productivity Record Revisited By Mauro Giorgio Marrano; Jonathan Haskel; Gavin Wallis
  10. When and why does it pay to be green? By Stefan Ambec; Paul Lanoie
  11. DRMs, Innovation and Creation By BOMSEL, Olivier; GEFFROY, Anne-Gaëlle
  12. Information, Technology and Information Worker Productivity: Task Level Evidence By Sinan Aral; Erik Brynjolfsson; Marshall Van Alstyne
  13. Beyond a better mousetrap: a cultural analysis of the adoption of ethanol in Brazil By Nardon, L.; Aten, K.
  14. Entrepreneurship and Institutions By Henrekson, Magnus
  15. Innovation, Investment and Regulation: What are the Options for Regulation in the Near Future? By FLACHER, David; JENNEQUIN, Hugues; LORENZI, Jean-Hervé
  16. Traditional paradigms for new services? : The Commission Proposal for a 'Audiovisual Media Services Directive' By SCHEUER, Alexander
  17. Three scenarios for TV in 2015 By MEYER, Laurence

  1. By: Oleg Yerokhin; GianCarlo Moschini (Center for Agricultural and Rural Development (CARD))
    Abstract: This paper studies how the strength of intellectual property rights (IPRs) affects investments in biological innovations when the value of an innovation is stochastically reduced to zero because of the evolution of pest resistance. We frame the problem as a research and development (R&D) investment game in a duopoly model of sequential innovation. We characterize the incentives to invest in R&D under two competing IPR regimes, which differ in their treatment of the follow-on innovations that become necessary because of pest adaptation. Depending on the magnitude of the R&D cost, ex ante firms might prefer an intellectual property regime with or without a "research exemption" provision. The study of the welfare function that also accounts for benefit spillovers to consumers—which is possible analytically under some parametric conditions, and numerically otherwise—shows that the ranking of the two IPR regimes depends critically on the extent of the R&D cost.
    Keywords: biological resistance, intellectual property rights, Markov perfect equilibrium, patents, research exemption, R&D, sequential innovation. JEL Classification: L00, O31, O34, Q28
    Date: 2007–06
  2. By: Antonelli Cristiano (University of Turin)
    Date: 2007–02
  3. By: Muge Ozman (Science and Technology Policies Research Centre)
    Abstract: Recently work on technological change has emphasized the importance and implications of different knowledge bases among industries in terms of innovative potential. In some industries, products and processes have become more complex, as well as there appears to be increased convergence in some market segments. Although increasing attention has been given to features of knowledge bases, there have been limited empirical research on how to measure them. In this paper a method is proposed to measure empirically the breadth and depth dimensions of main technology fields, sectors and firms in the economy. For this purpose, we measure the knowledge bases of 30 main technology fields by using the concepts of breadth and depth. Breadth corresponds to the range of different subjects that a technology field draws upon. Depth refers to the extent to which a certain field is exploited in detail. We position the main technology fields in the breadth and depth space by utilizing the EPO (European Patent Office) database between 1978-2000. We also present the evolution of breadth and depth through time, as well as the breadth and depth dimensions of 40 largest firms in biotechnology and telecommunications. Our results reveal that the both technology fields and firms are largely scattered in the breadth and depth space. Biotechnology stands out to have the highest breadth and depth.
    Keywords: Patents, Breadth and depth, technology fields, knowledge base.
    Date: 2007–06
  4. By: Møller, Charles (Department of Management Science and Logistics, Aarhus School of Business)
    Abstract: This paper proposes a research program on Business Process Innovation: Towards Global Supply Chain Intelligence. Few words are more ubiquitous in business or society today than "innovation". This reflects that businesses are striving for ways to survive and thrive in an increasingly complex and connected world (IBM 2006). <p> Most industrial supply chains today are globally scattered and nearly all organizations rely on their Enterprise Information Systems (ES) for integration and coordination of their activities. In this context innovation inevitably is driven by advanced information technology. <p> Organizations today are required not only to operate effective business processes but they also need to accommodate to changing business conditions at an increasing rate. Consequently the ability to develop and implement new processes driven by the Enterprise Information Systems is a central competence in most industries, and furthermore it is a critical practice for a global enterprise. <p> The next practice in Global Supply Chain Management is Business Process Innovation. Business Process Innovation is the transformation of a global supply chain driven by a new advanced Enterprise Information Systems technology. This technology holds the potential to "close the control loop", but until now few organizations have managed to unleash the full potential of global supply chain intelligence. Thus, there is an emerging need for managing the transformation and for new approaches that will lead to robust global supply chains. <p> This paper presents a conceptual framework for Business Process Innovation. A research proposal based on five interrelated topics is derived from the framework. The research program is intended to establish and to develop the conceptual framework for business process innovation and to apply this framework in a global supply chain context. These topics are presented in the following sections, but first the background for the program is discussed.
    Keywords: No keywords;
    Date: 2006–07–24
  5. By: Amavilah, Voxi Heinrich
    Abstract: Extant literature indicates that technology, and by implication its underlying knowledge base, determines long-run economic performance. Absent from the literature with respect to developing countries are quantitative assessments of the nexus between technology as knowledge and economic performance. This paper imposes a simple production function on annual pooled observations on Botswana, Namibia, and South Africa over the 1976-2004 period to estimate the marginal impacts of technology as knowledge on economic performance. It finds that capital (k), openness to trade (τ), and even the share of government expenditure of GDP (G) among other factors, influence economic performance. However, the economic performance of countries like Botswana, Namibia, and South Africa depends largely on technology, technological change, and the basic knowledge that forms the foundation for both. For instance, measured as a homogenous “manna from heaven”, technology is the strongest determinant of real per capita income of the three nations. The strength of technology as a determinant of performance depends on the knowledge underpinnings of technology measured as the number of publications (Q, q). Both Q and q are strongly correlated with the countries’ performance. This suggests that the “social capability” and “technological congruence” of these countries are improving, and that developing countries like Botswana, Namibia, and South Africa gain from increased investment in knowledge-building activities including publishing. Obviously there is room for strengthening results, but this analysis has succeeded in producing a testable hypothesis.
    Keywords: knowledge; technology; economic performance
    JEL: D80 O55 C51 O41 D83 C22 O47 O33 C33 I29
    Date: 2007–06–10
  6. By: Jarle Møen
    Abstract: Subsidies to commercial R&D can be given as R&D tax credits or through direct grants. Tax incentives have become an increasingly popular policy tool over the last decades. In this note I discuss the pros and cons of the two forms of subsidies in light of Norway’s experience with R&D policy. I review an ongoing evaluation of the Norwegian R&D tax credit introduced in 2002 and reflect on whether it is desirable for Finland to introduce a similar scheme. I suggest that this is not desirable. If Finland introduces an R&D tax credit, I argue that it should be limited to small and medium sized companies. PITÄISIKÖ SUOMEN OTTAA KÄYTTÖÖN T&K :N VEROKANNUSTIMET? POHDINTAA NORJAN TEKNOLOGIAPOLITIIKASTA SAATUIHIN KOKEMUKSIIN PERUSTUEN
    JEL: H25 O38
    Date: 2007–06–12
  7. By: Akkaya, Cenk
    Abstract: Strategic alliances can be as simple as two companies sharing their technological and/or marketing resources. In this context, strategic alliances help firms in an entrepreneurial way by allowing them to reorganize their value chain activities more effectively. Business alliances can assist organizations to acquire the means to compete within an ever complex and changing environment and it provide firms with market knowledge, open up access to know-how and technology. This study focuses on the technology related alliances from 2002 to 2005 in Turkey.
    Keywords: Strategic Alliances; Techology Based Alliances; Compatitive Power
    JEL: O32 O3
    Date: 2007
  8. By: Ryuhei Wakasugi (Institute of Economic Research, Kyoto University); Banri Ito (Research Institute of Economy, Trade and Industry)
    Abstract: It is noteworthy that intra-firm technology transfer has grown rapidly in recent years as a major part of international technology transfer. This paper presents empirical analysis of the effect of stronger Intellectual Property Rights (IPRs) on technology transfer from parent firm to its subsidiaries in foreign country. The results of empirical test, based on the firm-level panel data of Japanese MNCsf foreign subsidiaries, present that the stronger protection of IPRs has a positive effect on the promotion of intra-firm technology transfer after controlling market specific factors in the host countries as well as parent-subsidiary firm specific factors. They are consistent with our theoretical prediction and also the results of the previous studies based on US firm-level data.
    Keywords: Intellectual Property Rights, Technology Transfer, Multinational Firms, FDI
    JEL: C23 F20 F23 O30 O3
    Date: 2007–05
  9. By: Mauro Giorgio Marrano (Queen Mary, University of London and CeRiBA); Jonathan Haskel (Queen Mary, University of London, AIM, CeRiBA, CEPR and IZA); Gavin Wallis (University College London)
    Abstract: A major puzzle is that despite the apparent importance of innovation around the “knowledge economy”, UK macro performance appears unaffected: investment rates are flat, and productivity has slowed down. We investigate whether measurement issues might account for the puzzle. The standard National Accounts treatment of most spending on “knowledge” or “intangible” assets is as intermediate consumption. Thus they do not count as either GDP or investment. We ask how treating such spending as investment affects some key macro variables, namely, market sector gross value added (MGVA), business investment, capital and labour shares, growth in labour and total factor productivity, and capital deepening. We find (a) MGVA was understated by about 6% in 1970 and 13% in 2004 (b) instead of the nominal business investment/MGVA ratio falling since 1970 it is has been rising (c) instead of the labour compensation/MGVA ratio being flat since 1970 it has been falling (d) growth in labour productivity and capital deepening has been understated and growth in total factor productivity overstated (e) total factor productivity growth has not slowed since 1990 but has been accelerating.
    Keywords: Intangible assets, Productivity, R&D, Training, Organisational capital, Investment
    JEL: O47 E22 E01
    Date: 2007–06
  10. By: Stefan Ambec; Paul Lanoie (IEA, HEC Montréal)
    Keywords: Environmental policy; innovation; Porter hypothesis; environmental regulation; pollution; capital market; green products.
    JEL: D21 D23 G22
    Date: 2007–05
  11. By: BOMSEL, Olivier; GEFFROY, Anne-Gaëlle
    Abstract: DRMs are intellectual property institutions. They transpose the empirical principle of copyright, which implicitly recognizes that specific ownership rules should be attached to non scientific creation, into the digital era. The legal protection of DRMs, a private means of enforcing content excludability, participates in the "privatization" of copyright protection. This, in turn, means that a proprietary software — governed by intellectual property rights, reinforced by public law — becomes the key to the vertical relations shaped by exclusive copyright. DRMs consequently represent a major stake in the competition to capture network effects in the content distribution vertical chain
    Keywords: copyright; distribution; DRMs; network effects
    JEL: D43 D62 L96 K21
    Date: 2006–06
  12. By: Sinan Aral; Erik Brynjolfsson; Marshall Van Alstyne
    Abstract: In an effort to reveal the fine-grained relationships between IT use, patterns of information flows, and individual information-worker productivity, we study task level practices at a midsize executive recruiting firm. We analyze both project-level and individual-level performance using: (1) detailed accounting data on revenues, compensation, project completion rates, and team membership for over 1300 projects spanning 5 years, (2) direct observation of over 125,000 email messages over a period of 10 months by individual workers, and (3) data on a matched set of the same workers' self-reported IT skills, IT use and information sharing. These detailed data permit us to econometrically evaluate a multistage model of production and interaction activities at the firm, and to analyze the relationships among key technologies, work practices, and output. We find that (a) IT use is positively correlated with non-linear drivers of productivity; (b) the structure and size of workers' communication networks are highly correlated with performance; (c) an inverted-U shaped relationship exists between multitasking and productivity such that, beyond an optimum, more multitasking is associated with declining project completion rates and revenue generation; and (d) asynchronous information seeking such as email and database use promotes multitasking while synchronous information seeking over the phone shows a negative correlation. Overall, these data show statistically significant relationships among technology use, social networks, completed projects, and revenues for project-based information workers. Results are consistent with simple models of queuing and multitasking and these methods can be replicated in other settings, suggesting new frontiers for IT value and social network research.
    JEL: D2 D8 J44 L8 M0 O30
    Date: 2007–06
  13. By: Nardon, L.; Aten, K.
    Abstract: Complex technologies develop within technological systems, which include, in addition to discrete technologies, organizations such as manufacturing firms and investment banks; scientific elements, such as teaching and research programs; and legislative elements, such as regulations. The tangible aspects of such technologies do not alone determine their end configuration or success; rather, social and cultural practices, expectations, and relationships influence the development of technologies just as technologies influence these factors. We argue that culture provides actors with logic principles with which to construct action, influencing the trajectory of the technological system development, in a reinforcing system of path dependency. We analyze the case of ethanol adoption in Brazil and find that Brazil’s adoption of an ethanol-fueled transportation system derives from a pattern of adaptation in response to salient issues. We argue that a unique characteristic of Brazilian culture, the Brazilian Jeitinho - a logic of action of adaptation - influenced the development of the Brazil’s ethanol-fueled transportation system.
    Date: 2007–06–15
  14. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: In this paper entrepreneurs are defined as agents who bring about economic change by combining their own effort with other factors of production in search of economic rents. The institutional setup is argued to determine both the supply and direction of entrepreneurial activity. Four key institutions are explored more closely: property rights protection, savings policies, taxation and the regulation of labor markets. Institutions have far-reaching effects on entrepreneurship, and they largely determine whether or not entrepreneurial activity will be socially productive. Due to the responsiveness of entrepreneurship to the institutional setup it is maintained that in-depth analyses of specific institutions are required in order to further our understanding of the determinants of entrepreneurial behavior and the economic effects of entrepreneurship. The paper also demonstrates that it is problematic to use self-employment as an empirical proxy for productive entrepreneurship.
    Keywords: Entrepreneurship; Industrial policy; Innovation; Institutions; Labor security; Property rights; Regulation; Self-employment; Tax policy
    JEL: H32 L25 L50 M13 O31 P14
    Date: 2007–06–04
  15. By: FLACHER, David; JENNEQUIN, Hugues; LORENZI, Jean-Hervé
    Abstract: This paper addresses the question of what options are available to regulate the sector in the near future. In order to answer this question, the paper focuses on the problem of investment and innovation in an ex ante regulated sector. Relying on existing literature, we argue that ex ante regulation could represent a danger for the long-term development of the sector by delaying or cancelling investment projects, especially (but not only) concerning the construction of new infrastructures. We also argue that ex ante regulation is distorting investment itself: incremental investment is privileged as opposed to radical investment. In this context, we identify three possible options for regulation in the near future: 1) continuing ex ante regulation, 2) substituting ex post regulation for ex ante regulation and 3) implementing an industrial policy for macro-strategic reasons. After describing a few major mutations in the sector that must be taken into account by regulators and presenting the major dilemmas that the latter are facing, we propose two possible solutions inspired by foreign policy. The first solution consists of offering investors regulation holidays, with regular reviews to deem whether these holidays should be prolonged or not. The second solution consists of implementing an industrial policy that could take the form of a contract negotiated between the regulator and operators. This would guarantee the absence of ex ante regulation if the conditions of the contract (in terms of regional planning, price, quality of service, types of investment…) are met.
    Keywords: regulation; innovation; investment and industrial policy.
    JEL: L50 L52 L41 L51 D43 K23 L96 L43
    Date: 2006–12
  16. By: SCHEUER, Alexander
    Abstract: For over 10 years the European Community has strived to develop suitable and proportionate answers to the phenomenon of convergence in its audiovisual regulatory policy. This article outlines the regulatory process at an EU level since the early 1980s as far as media, telecommunications and Information Society services are concerned, and analyses some of the most relevant policy papers specifically related to the adoption of the EC legal framework for the media in the digital age, before focusing on the preparatory phase leading up to the adoption of the Commission proposal for a Directive on "Audiovisual Media Services", issued in December 2005. In addition, the core of this proposal for a revised "Television without Frontiers" Directive, i.e. the extension of its scope to cover new media services provided in a non-linear manner and the introduction of a graduated regime of regulation with a lighter-touch approach in view of such services, is presented along with the main lines of debate among stakeholders.
    Keywords: Convergence; digital television; new audiovisual media services; EU media regulatory policy; revision of TWF Directive; electronic communications; broadcasting
    JEL: L82 L51 K23 L41 L96 D82
    Date: 2006–06
  17. By: MEYER, Laurence
    Abstract: By offering three visions of the future of television through 2015, this article aims to highlight some of the socio-economic changes that the television sector may experience in the long term. It highlights the structuring impact that PVR could have on the sector, as well as the upheavals that may arise from a new paradigm of internet TV. It also highlights the options now open to TV channel operators wishing to set up a mobile TV service and the threats facing mobile telecommunications operators in the development of this market as a result.
    Keywords: television; forecast; media usages
    JEL: L82 L96
    Date: 2006–06

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