nep-ino New Economics Papers
on Innovation
Issue of 2007‒11‒03
ten papers chosen by
Koen Frenken
Utrecht University

  1. Non-technological and Technological Innovation: Strange Bedfellows? By Schmidt, Tobias; Rammer, Christian
  2. Investments in Modernization, Innovation and Gains in Productivity: Evidence from Firms in the Global Paper Industry By Ghosal, Vivek; Nair-Reichert, Usha
  3. Star Scientists, Innovation and Regional and National Immigration By Lynne G. Zucker; Michael R. Darby
  4. Do Technology Diffusion Theories Explain the OSS Business Model Adoption Patterns ? By Heli Koski
  5. Innovation, cities, and new work By Jeffrey Lin
  6. Economic Growth and Patent Policy: Quantifying the Effects of Patent Length on R&D and Consumption By Chu, Angus C.
  7. Patents only live twice: a patent survival analysis in Europe By Nicolas van Zeebroeck
  8. Older Workers and the Adoption of New Technologies By Meyer, Jenny
  9. Empirical Analysis of Career Transitions of Sciences and Engineering Doctorates in the US By Natalia Mishagina
  10. “Europe of Knowledge”: Search for a New Pact By Å. Gornitzka, P. Maassen, J. P. Olsen,; B. Stensaker

  1. By: Schmidt, Tobias; Rammer, Christian
    Abstract: Non-technological innovation is an important element of firms’ innovation activities that both supplement and complement technological innovation, i.e. the introduction of new products and new processes. We analyse the spread of nontechnological innovation in firms, their relation to technological innovation, and their effects to firm performance and success with product and process innovation, using data from the German Community Innovation Survey conducted in 2005 (German CIS 4). Non-technological innovation is defined as the introduction of new organisational methods or the introduction of new marketing methods. We find that the determinants of a firm’s propensity to introduce technological and non-technological innovations are very similar and that both types are closely related. There are only small effects of non-technological innovation on a firm’ profit margin, which contrasts the strong effects to be found from technological innovation. However, non-technological innovation spurs success with product and process innovation terms of sales with market novelties and cost reductions from new processes.
    Keywords: organisational innovation, marketing innovation, effects of innovation, CIS 4
    JEL: L25 O30 O31
    Date: 2007
  2. By: Ghosal, Vivek; Nair-Reichert, Usha
    Abstract: This paper examines the impact of investments in modernization and innovation on productivity in a sample of firms in the global pulp and paper industry. This industry is important because it has traditionally accounted for significant amounts of employment and capital investment in North America and Europe. In contrast to much of the existing literature which focuses on the impact of R&D and patents on firms’ performance and productivity, we examine data on actual investment transactions in four main areas of operations: (i) mechanical, (ii) chemicals, (iii) monitoring devices and (iv) information technology. We find that firms which made decisions to implement a greater number of investment transactions in modernization achieved higher productivity, and these estimated quantitative effects are greater than the impact of standard innovation variables such as patents and R&D. Investment transactions in the information technology and digital monitoring devices imparted a particularly noticeable boost to productivity. These results are obtained after controlling for other firm-specific variables such as capital-intensity and mergers and acquisitions. Two broad messages emerge from our study. First, firms’ decisions to undertake investments in modernization and various forms of incremental innovations appear to be critical for achieving gains in productivity. While these may typically generate small gains on a year-to-year basis, they can compound to form meaningful differences in performance, productivity and competitive position across firms in the longer-run. Second, for some of the traditional industries like pulp and paper, R&D and patents seem to be particularly poor indicators of innovation and, more generally, how firms go about achieving gains in productivity. While this paper focuses on the pulp and paper industry, our broad framework and methodology is general and can be applied to understanding firms’ strategies related to enhancing performance and productivity in a variety of industries.
    Keywords: Pulp and paper industry; investment; modernization; innovation; productivity; organizational behavior.
    JEL: M10 D20 L60 L20
    Date: 2007–06
  3. By: Lynne G. Zucker; Michael R. Darby
    Abstract: We follow the careers 1981-2004 of 5401 star scientists listed in ISI HighlyCitedSM as most highly cited by their peers. Their number in a US region or a top-25 science and technology (S&T) country significantly increases the probability of firm entry in the S&T field in which they are working. Stars, rather than their disembodied discoveries, are key for high-tech entry. Stars become more concentrated over time, moving disproportionately from areas with few peers in their discipline to many -- except for a countercurrent of some foreign-born American stars returning home. High impact articles and university articles all tend to diffuse. America has 62 percent of the world's stars as residents, primarily because of its research universities which produce them. Migration plays a significant role in some developing countries.
    JEL: J61 L26 O14 O31
    Date: 2007–10
  4. By: Heli Koski
    Abstract: ABSTRACT : This paper addresses the question of the software companies’ timing of adoption of the open source software (OSS) business models comprising the supply of OSS products and/or services. The game-theoretic technology adoption models do not explain well the observed diffusion patterns of the OSS business model among the sample of 716 European software firms. Instead, it seems that the network effects influentially shape the diffusion path of the OSS supply strategies. Our study further contributes to the technology diffusion literature as our econometric model aims at separating, unlike the previous empirical studies on technology diffusion, the role that the replacement effect has in the diffusion patterns of new technologies. Our data detect a clear replacement effect hindering the incumbents’ investments in new technology. The expected price declines of the computer programs – and thus the expected declining license revenues from the proprietary software – accelerate less the incumbent firms’ timing of adoption of the OSS supply model than that of the entrants.
    Keywords: timing of technology adoption, diffusion, open source software, business models
    JEL: C41 D21 D23 L2 L86 O14
    Date: 2007–10–29
  5. By: Jeffrey Lin
    Abstract: Where does adaptation to innovation take place? The supply of educated workers and local industry structure matter for the subsequent location of new work–that is, new types of labor-market activities that closely follow innovation. Using census 2000 microdata, the author shows that regions with more college graduates and a more diverse industrial base in 1990 are more likely to attract these new activities. Across metropolitan areas, initial college share and industrial diversity account for 50% and 20%, respectively, of the variation in selection into new work unexplained by worker characteristics. He uses a novel measure of innovation output based on new activities identified in decennial revisions to the U.S. occupation classification system. New work follows innovation, but unlike patents, it also represents subsequent adaptations by production and labor to new technologies. Further, workers in new activities are more skilled, consistent with skill-biased technical change.
    Keywords: Human capital
    Date: 2007
  6. By: Chu, Angus C.
    Abstract: Is the patent length an effective policy instrument in stimulating R&D? This paper develops a generalized variety-expanding growth model and then calibrates the model to the aggregate data of the US economy to analyze the effects of extending the patent length. The numerical exercise suggests that at the empirical range of patent-value depreciation rates, extending the patent length beyond 20 years leads to only a very small increase in R&D despite R&D underinvestment in the market economy. On the other hand, shortening the patent length can lead to a significant reduction in R&D and consumption. This paper also makes use of the dynamic general-equilibrium framework to examine the fraction of total factor productivity (TFP) growth that is driven by R&D, and the calibration exercise suggests that about 35% to 45% of the long-run TFP growth in the US is driven by R&D. Finally, this paper identifies and analytically derives a dynamic distortion of the patent length on saving and investment in physical capital that has been neglected by previous studies, which consequently underestimate the distortionary effects of patent protection.
    Keywords: endogenous growth; intellectual property rights; patent length; R&D
    JEL: O34 O31
    Date: 2007–10
  7. By: Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: The length of patent rights is an issue of considerable importance in the design of patent systems, and its optimality has been intensively discussed in the literature. This dimension – taking the form of the number of years during which a given patent has been maintained – has been considered in the empirical literature as a direct indication of the private value of patents. But the lack of comprehensive data on both the renewal of patents and their characteristics has prevented so far any systematic analysis of the determinants of this duration. Relying on a comprehensive dataset including detailed information on all patent applications filed to the European Patent Office from 1980 to 2000 and on the renewal of those of them that were granted, this paper presents a survival time analysis of the determinants of patent length in Europe. The results are threefold: first, they clearly establish that patent rights have significantly increased in length over the past decades despite a small decline in the average grant rate, and due to the dilatation of the examination process and higher maintenance rates. Second, they show that some filing strategies induce considerable delays in the examination process, possibly to the benefits of the patentee, but most certainly to the expense of legal uncertainty on the markets and undue exploitation of the provisional protection granted to pending applications by the European Patent Convention. And third, they confirm that more valuable patents (more cited or covering a larger geographical scope) take more time to be processed and live longer, whereas more complex applications are associated with longer decision lags but also with lower grant and renewal rates. These results have many policy implications for technology markets, patent systems and all their stakeholders.
    Keywords: Patent length, Patent value, Renewals, Granting Process, Survival Time Analysis
    JEL: O31 O34 O50
    Date: 2007–10
  8. By: Meyer, Jenny
    Abstract: For the first time data of German ICT and knowledge intensive service providers are used to analyze the relation between the age structure of the workforce and the probability of adopting new technologies. The results show that firms with a higher share of younger employees are more likely to adopt new technologies and the older the workforce the less likely is the adoption of new technologies. Furthermore the results exhibit that the age structure of the workforce should be accompanied by appropriate workplace organization. A part of the firms which enhanced teamwork or flattened their hierarchies are actually more likely to adopt new technologies and software when they have a higher share of older employees whereas they are less likely to introduce new technologies if they have a higher share of younger employees.
    Keywords: age structure of the workforce, adoption of new technologies, ICT intensive services
    JEL: J14 O31
    Date: 2007
  9. By: Natalia Mishagina (Queen's University)
    Abstract: This paper studies career mobility of white male doctorates in natural sciences and engineering using the Survey of Doctorate Recipients (1973-2001). The paper focuses on two issues. First, it assesses the relevance of doctoral careers to sciences and engineering (S&E) in general, and research and development in particular. Second, it evaluates participation rates and mobility patterns of doctorates in careers of different types. To analyze how various factors affect mobility, a transition model with competing risks is specified and estimated. The paper finds that only half of doctorates have careers in R&D, and another 8% work in occupations outside the scope of S&E. Employment choices vary throughout a career. Mobility both within- and out of S&E is especially high during the first 16 years on the job. The effects of individual and job characteristics, research productivity, and labor market conditions on transitions are also assessed.
    Keywords: duration analysis, competing risks, science and technology workforce, high-skilled labor, occupational choices
    JEL: C41 J24 J44
    Date: 2007–10
  10. By: Å. Gornitzka, P. Maassen, J. P. Olsen,; B. Stensaker
    Keywords: Europeanization; Europeanization; knowledge; institutionalism; institutionalisation; political science; integration theory
    Date: 2007–02–28

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