nep-ino New Economics Papers
on Innovation
Issue of 2007‒11‒17
fifteen papers chosen by
Koen Frenken
Utrecht University

  3. Sectoral patterns of innovation in a developing country: The Tunisian case By Murat YILDIZOGLU (GREThA); Mohamed AYADI (UAQUAP, Université de Tunis); Mohieddine RAHMOUNI (UAQUAP et GREThA)
  4. Technology Scouting – a case study on the Deutsche Telekom Laboratories By Rohrbeck, Rene
  6. Clustering in ICT: From Route 128 to Silicon Valley, from DEC to Google, from Hardware to Content By Hulsink, W.; Manuel, D.; Bouwman, H.
  7. Nowcasting Patent Indicators By Hélène Dernis
  8. Why New Business Development Projects Fail: Coping with the Differences of Technological versus Market Knowledge By Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W.
  9. Localized Technological Knowledge: Pecuniary Knowledge Externalities And Appropriability By Cristiano Antonelli
  10. The Impact of National Research Funds: An Evaluation of the Chilean FONDECYT By José Miguel Benavente; Gustavo Crespi; Alessandro Maffioli
  11. Strategic Foresight in multinational enterprises – a case study on the Deutsche Telekom Laboratories By Rohrbeck, Rene; Arnold, Heinrich M.; Heuer, Jörg
  13. A Maximum Entropy Approach to the Indenitication of Productive Technology Spillovers By Esteban Fernández Válszquez; Bart Los
  14. Financial Risk in the Biotechnology Industry By Joseph H. Golec; John A. Vernon
  15. The Role and Development of Technology-Intensive Suppliers in Resource-Based Economies: A Literature Review By Carlos Torres Fuchslocher

  1. By: Celeste Amorim Varum (Universidade de Aveiro); Leonildo Monteiro (Universidade de Aveiro)
    Abstract: Product innovation is a subtle process, frequently leading to shifts in the competitiveness of firms. Developing products in an environment undergoing technological change is given to frequent failure, even in well-established and sophisticated organizations. In order to tackle competitiveness and to deal with innovation uncertainty, firms develop diverse innovation processes. Two modes of innovation are suggested in recent literature: 1) Science, Technology and Innovation (STI) mode, which is based on the production and use of codified scientific and technical knowledge; and 2) Doing, Using and Interacting (DUI) mode, which relies on informal processes of learning and experience-based know-how. In this paper we analyse product innovation at firm level. We perform an exploratory analysis in four leading equipment and machinery producers from the Aveiro region, in Portugal. Doing so, we explore the main features of the capital goods’ industry with implications for innovation, and analyse the dominant uncertainties associated to the innovation process. and modes of innovation. Key findings include the complete absence of DUI mode in the cases studied, and even a low learning characteristic in one company. The paper concludes by considering the implications for firms’ competitiveness and for innovation policy.
    Keywords: modes of innovation, uncertainties, R&D, capital goods, SME
    JEL: O32 L6
    Date: 2007–11
  2. By: Celeste Amorim Varum (Universidade de Aveiro); Carlos Pinho (Universidade de Aveiro)
    Abstract: The present paper is conducted under the research project “Enterprise of the Future: Trends and Scenarios towards Competitiveness” which attempts to disclosure determinants of future enterprise competitiveness. Innovation is not only a must today but also an imperative in future competitiveness scenarios. In modern evolutionary economics it is argued that sector-specific factors are one of the key factors explaining innovative behaviour and performance of firms. Several contributions have pointed that industries largely differ in terms of knowledge base and technological sources, opportunities and appropriation of innovative activities, technological trajectories and firms’ strategies. Using as background Pavitt’s taxonomy, this paper explores the nature, extent and sources of variety of innovation in the manufacturing industry, aiming at identifying common patterns across industries, and sectoral patterns across countries. This paper presents evidence based on the aggregated results of the last IV Community Innovation Survey released by EUROSTAT (CIS4), for which data is available for a number of industries and countries.
    Keywords: innovation, manufacturing industry, Community Innovation survey CIS
    JEL: L6 O3
    Date: 2007–11
  3. By: Murat YILDIZOGLU (GREThA); Mohamed AYADI (UAQUAP, Université de Tunis); Mohieddine RAHMOUNI (UAQUAP et GREThA)
    Abstract: We analyze in this article main determinants of technology dynamics in Tunisian manufacturing sectors. The data from the industrial survey provided by Ministry of Scientific Research, Technology and Competency Development (MSRTCD) for the period 2002-2004 is explored using regression trees and Probit models in order to discover main factors that favor the innovative capacity of Tunisian firms. Our results show that we must distinguish process and product innovations because they are driven by different mechanisms. Moreover, we observe that sectoral heterogeneity should not be neglected and we study more in detail fours sectors that are particularly well represented in our sample. This analysis allows us to suggest some differentiated policy indications for fostering innovative capacity in these sectors.
    Keywords: Industry dynamics; Innovation systems; Development economics; Sectoral systems of innovation
    JEL: O12 O30
    Date: 2007
  4. By: Rohrbeck, Rene
    Abstract: Technology Intelligence has become an important field of study in which a variety of different methods are discussed, all aiming at identifying opportunities and threats arising from advances in technology. In this respect, Technology Scouting is a method which can lower the time lag between the advances in technology and their detection by methods such as patent or publication analysis. Furthermore, in an environment of increasing technological complexity and the globalization of R&D, the successful identification and usage of external sources of knowledge is becoming increasingly important. In the sourcing of technology the scouts can also play an important role in identifying valuable sources and facilitate the sourcing. Based on two case studies of the Deutsche Telekom and British Telecom, as well as a literature review, the paper proposes a definition of Technology Scouting, a generic process, and identifies the motivations of the actors in the process.
    Keywords: technology intelligence; technological forecasting; technology foresight; technology scouting; technology exploration; strategic foresight; technology monitoring; technology scanning
    JEL: M10
    Date: 2007–01–12
  5. By: Ana Villar (Universitat Jaume I); César Camisón (Universitat Jaume I); Montserrat Boronat (Universitat Jaume I)
    Abstract: This study provides an empirical evidence of the relationship that exists between participation in technological strategic alliances and business performance by considering the knowledge-based distinctive competencies that the alliance is capable of generating as a mediating variable. The generation of knowledge in technological strategic alliances explains the contradictory results that emerge from the direct effect of strategic alliances on economic performance. The study uses a sample of Spanish industrial firms. The results findings prove that the relationship between R&D and innovation strategic alliances, and performance is mediated by the generation of knowledge-based distinctive competencies; and that the contribution of the participation in alliances to the growth of the firm¿s knowledge stock depends on its creation of innovation competencies. R&D managers should enhance the development of this kind of competencies in order to achieve superior performance. El presente trabajo provee evidencia empírica de la relación existente entre la participación en alianzas estratégicas tecnológicas y el desempeño organizativo, introduciendo como variable mediadora las competencias distintivas basadas en conocimiento que la alianza es capaz de generar. En la literatura existen resultados contradictorios en cuanto al efecto directo de las alianzas estratégicas en el desempeño organizativo. La generación de conocimiento en las alianzas estratégicas tecnológicas explica estos resultados contradictorios. A través de una muestra compuesta por empresas industriales españolas, nuestros resultados demuestran que la relación entre alianzas estratégicas en I+D y el desempeño, está mediada por la generación de competencias distintivas basadas en conocimiento; y que la contribución de la participación en las alianzas en el crecimiento del stock de conocimiento de la empresa depende de la creación de competencias en innovación. Los directivos de I+D deben alentar el desarrollo de este tipo de competencias para conseguir un desempeño organizativo superior.
    Keywords: Alianzas estratégicas, cooperación tecnológica, competencias basadas en conocimiento e innovación, desempeño organizativo. Strategic alliances, technological cooperation, knowledge-based and innovation competencies, performance
    JEL: C61 G31
    Date: 2007–10
  6. By: Hulsink, W.; Manuel, D.; Bouwman, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: One of the pioneers in academic entrepreneurship and high-tech clustering is MIT and the Route 128/Boston region. Silicon Valley centered around Stanford University was originally a fast follower and only later emerged as a scientific and industrial hotspot. Several technology and innovation waves, have shaped Silicon Valley over all the years. The initial regional success of Silicon Valley started with electro-technical instruments and defense applications in the 1940s and 1950s (represented by companies as Litton Engineering and Hewlett & Packard). In the 1960s and 1970s, the region became a national and international leader in the design and production of integrated circuit and computer chips, and as such became identified as Silicon Valley (e.g. Fairchild Semiconductor, and Intel). In the 1970s and 1980s, Silicon Valley capitalised further on the development, manufacturing and sales of the personal computer and workstations (e.g. Apple, Silicon Graphics and SUN), followed by the proliferation of telecommunications and Internet technologies in the 1990s (e.g. Cisco, 3Com) and Internet-based applications and info-mediation services (e.g. Yahoo, Google) in the late 1990s and early 2000s. When the external and/or internal conditions of its key industries change, Silicon Valley seemed to have an innate capability to restructure itself by a rapid and frequent reshuffling of people, competencies, resources and firms. To characterise the demise of one firm leading, directly or indirectly, to the formation of another and the reconfiguration of business models and product offerings by the larger companies in emerging industries, Bahrami & Evans (2000) introduced the term `flexible recycling.? This dynamic process of learning by doing, failing and recombining (i.e. allowing new firms to rise from the ashes of failed enterprises) is one of the key factors underlying the dominance of Silicon Valley in the new economy.
    Keywords: Academic entrepreneurship;Flexible recycling;Clusters;Silicon Valley;Stanford University;MIT;Route 128;ICT;Networks;
    Date: 2007–10–30
  7. By: Hélène Dernis
    Abstract: Indicators based on patents provide a good measure of the innovative performance and technology outputs of countries. However, because of legal rules imposed by the patent application process, information on patents is generally publicly disclosed after 18 months. Patent indicators are consequently faced with a timeliness issue, which can extend to more than five years depending on the computational method used to develop indicators. This study aims at designing simple but robust methods that would enable to "nowcast" patent indicators - forecast the present (or the recent past) - in order to mitigate the timeliness issue. The nowcasting exercise is conducted here on two separate sets of patent indicators: the number of patents applied to the European Patent Office (EPO) and the number of Triadic Patent Families (patents taken at the EPO, the Japan Patent Office (JPO) and the United States Patent and Trademarks Office (USPTO)). Portion of patent filings at the EPO were made under the Patent Cooperation Treaty (PCT). The nowcasting method developed in the present document is based on estimates of the transfer rate of patents filed under PCT into the EPO regional phase, given that information on PCT patents at international phase is disclosed before reaching the regional/national phase. This method provides robust estimates up to year t-2 (instead of year t-4), even though patenting activity of small patenting countries or emerging economies are difficult to predict, in terms of both level and growth... <P>Prévisions des indicateurs brevets (nowcast) <BR>Les indicateurs de brevets proposent une bonne mesure de la performance des pays dans les activités d'innovation et de leurs productions technologiques. Cependant, les règles légales liées aux procédures de dépôt de brevets impliquent des délais de 18 mois avant la révélation publique du contenu des brevets. Les indicateurs brevets font par conséquent face à des problèmes de disponibilité pour les années les plus récentes. La disponibilité peut être décalée à plus de cinq ans selon les méthodes utilisées pour compiler les indicateurs. Cette étude vise à développer des méthodes d'estimations simples et néanmoins robustes, pour évaluer le présent ou le passé récent (« nowcast »), afin de pallier au problème de disponibilité des dernières années. Dans ce document, le travail d'estimation est mené sur deux ensembles d'indicateurs distincts : le nombre de demandes de brevets déposées auprès de l'Office européen des brevets (OEB) et le nombre de Familles de brevets « triadiques » (brevets pris à l'OEB, au Japan Patent Office (JPO) et à l'United States Patent and Trademarks Office (USPTO)). Une partie des demandes de brevets auprès de l'OEB se fait via le Traité de coopération en matière de brevets (PCT). La méthode de prévision mise en place ici est basée sur les taux de transfert des demandes de brevet PCT dans la phase régionale à l'OEB, le contenu des brevets PCT étant en effet rendu public lorsqu'ils sont encore en phase internationale. Cette méthode fournit alors des estimations robustes jusque l'année t-2 (au lieu de t-4). Néanmoins, l'activité récente des pays déposant un petit nombre de brevets et des économies émergentes reste difficile à prévoir, que ce soit en terme de volume comme en terme de croissance...
    Date: 2007–10–05
  8. By: Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Managing through projects has become important for generating new knowledge to cope with technological and market discontinuities. This paper examines how the fit between the creation of technological and market knowledge and important project management characteristics, i.e. project autonomy and completion criteria, influences the success of new business development (NBD) projects. In-depth longitudinal case research on NBD-projects commercialised during the period 1993-2003 in the consumer electronics industry highlights that project management characteristics focusing only on the creation of technological knowledge contributed to the failure of those NBD-projects that required new market knowledge as well. The findings indicate that senior management support and engaging in an alliance with partners possessing complementary market knowledge can offset this misalignment of the organisation of NBD-projects.
    Keywords: project management;new business development;exploitation-exploration;knowledge;new product development;strategic alliances;sales force;
    Date: 2007–10–30
  9. By: Cristiano Antonelli
    Abstract: Recent advances in the economics of knowledge highlight the key role of pecuniary knowledge externalities in explaining the system dynamics of total factor productivity growth. When non-exhaustible technological knowledge is an input both in the production of new goods and of further knowledge, and the acquisition of external knowledge, as a non-disposable input in the production of new knowledge, is not free, pecuniary externalities, as opposed to technological externalities, provide an important clue to understanding the key role of knowledge governance mechanisms in assessing the rate of growth of total factor productivity and economic systems at large. The negative effects upon appropriability limit the advantages of agglomeration.
    JEL: O33
    Date: 2007–11
  10. By: José Miguel Benavente (INTELIS, Department of Economics, University of Chile); Gustavo Crespi (International Development Research Centre); Alessandro Maffioli (Inter-American Development Bank)
    Abstract: This paper analyzes the role of National Research Funds in promoting scientific production in emerging economies. The investigation focuses on the impact of the Chilean National Science and Technology Research Fund (FONDECYT). The analysis uses data drawn from international sources of bibliometric information combined with the administrative records of the program executing unit. To measure the program’s impact, we implement a Regression Discontinuity (RD) design on projects submitted for funding between 1988 and 1995. The results do not show any significant impact either in terms of publications or in terms of quality of publications in the proximity of the program threshold ranking. Although results show that the program has been partially effective in identifying the best projects in terms of expected quality, evidence suggests that the FONDECYT’s lack of impact may be due to targeting problems in terms of both researchers and research projects.
    Keywords: FONDECYT; Chile; Economics of Science; Scientific Grants; Regression-discontinuity Analysis; Policy Evaluation.
    JEL: O30 O38 H43
    Date: 2007–10
  11. By: Rohrbeck, Rene; Arnold, Heinrich M.; Heuer, Jörg
    Abstract: Strategic Foresight activities enable companies to use weak signals to identify opportunities and threats. Research on Strategic Foresight proposes different methods, discusses their implementation and gives recommendations on how to link Strategic Foresight with other functions in an organization. Based on a literature review, we define a generic framework for the management of Strategic Foresight activities on the strategic, tactical and operational level and identify and discuss actors, methods and systems of Strategic Foresight. Building on an in-depth case study of the Deutsche Telekom Laboratories we shed light on the implementation of Strategic Foresight activities. In the discussion we focus on the interaction of methods from Consumer Foresight and Technology Intelligence. Taking an example project, we explore how Strategic Foresight is used on the operational level of innovation management. We conclude that Strategic Foresight can successfully contribute to coping with uncertainty and complexity and can feed the front-end of innovation from the market (customer needs) and technology (realization opportunities) perspective.
    Keywords: strategic foresight; consumer foresight; technology foresight; technology intelligence; market foresight; trend analysis; future studies; future analysis; telecommunication industry
    JEL: M0 M19 M10
    Date: 2007–01–12
  12. By: Annette Bongardt (Universidade Moderna and IEEI); Isabel Cabrita (Universidade Moderna and INETI)
    Abstract: This paper considers the prerequisites for implementing a competitive low-carbon economy in the European Union from the point of view of firms’ incentives, the role of policy and the contribution of public research. It suggests that the reduction of the environmental impact of energy can be a new competitiveness factor. Rather than being treated as a constraint and cost-aggravating factor, addressing climate change can offer economic opportunity and contribute to growth. The paper looks at both static (energy efficiency) and dynamic (innovation – new products, processes, technologies or sectors and consumption patterns) dimensions of competitiveness.
    Keywords: Economic competitiveness; low-carbon economy; energy; technology; and public research.
    JEL: M21 H23 H44
    Date: 2007–11
  13. By: Esteban Fernández Válszquez; Bart Los
    Abstract: ABSTRACT : R&D activities by one industry often have positive effects on the productivity performance of other industries, as a consequence of technology spillovers. Econometric problems (such as multicollinearity), however, have prevented researchers from identifying the industries that have been responsible for the most important technology spillovers. This paper proposes an alternative estimation approach (Generalized Maximum Entropy econometrics), which can cope with datasets characterized by a high degree of multicollinearity. For a number of industries, rates of return to R&D expenditures by other industries are estimated on a bilateral basis. Furthermore, productivity effects of spillovers from the foreign counterparts of the industry are estimated. The analysis is done for eighteen industries in twelve OECD countries in the period 1976-1999.
    Date: 2007–11–12
  14. By: Joseph H. Golec; John A. Vernon
    Abstract: The biotechnology industry has been an engine of innovation for the U.S. healthcare system and, more generally, the U.S. economy. It is by far the most research intensive industry in the U.S. In our analyses in the current paper, for example, we find that, over the past 25 years, average R&D intensity (R&D spending to total firm assets) for this industry was 38 percent. Consider that over this same period average R&D intensity for all industries was only about 3 percent. In the current paper we examine this industry along a number of dimensions and estimate its average financial risk. Specifically, we use Compustat and Center for Research in Securities Prices (CRSP) data from 1982 to 2005 for firms defined by the North American Industry Classification System (NAICS) as biotechnology firms to estimate several Fama-French three factor return models. The finance literature has established this model as the gold standard. Single factor models like the Capital Asset Pricing Model (CAPM) do not capture all of the types of systematic risk that influence firm cost of capital. In particular, the CAPM does not reflect the empirical evidence that supports both a size-related and a book-to-market related systematic risk factor . Both of these factors, based on biotech industry characteristics, will exert a greater influence on biotech firms, on average. Another implication is, of course, that cost of capital estimates for the industry will be underestimated when a single factor model, like the CAPM, is used. This also implies that the cost estimates of bringing a new drug and/or biologic to market will be understated if financial risk and cost of capital are measured using a single-factor model. In the current study we find that biotechnology firms are exposed to greater financial risk than other industries and are also more sensitive to policy shocks that affect, or could affect, industry profitability. Average nominal costs of capital over the 1982-2005 time period were 16.25 percent for biotechnology firms. Of course, these average estimates obscure significant variation in financial risk at the firm level, but nonetheless shed light on some interesting aggregate differences in risk. In the current paper we discuss the theoretical links between financial risk, stock prices and returns, and R&D spending. Several caveats are also discussed.
    JEL: G18 G32 I0 I18 K23 L0 L2 L21 L5 L65
    Date: 2007–11
  15. By: Carlos Torres Fuchslocher (GIGA Institute of Latin American Studies)
    Abstract: Although primary industries are important to developing countries, they have been largely unable to contribute to rapid growth. Systematically strengthening the development of local technology-intensive suppliers (t-suppliers), however, may contribute to both reinforcing the industrial base and supporting the competitiveness of primary production. Indeed, the development of t-suppliers has been common in those resource-based economies which achieved a high level of development (Scandinavia, Canada, Australia). This paper explores the role of t-suppliers in natural resource-based economies. It outlines a theoretical framework for the analysis of the factors which foster or constrain their development and defines areas for an effective promotion of t-suppliers. The proposed model of analysis distinguishes between factors influencing the development of t-suppliers on the level of the main industry (MI), the level of supplier firms or firm-level and the level of external determinants with special reference to industrial policy factors.
    Keywords: Technology-intensive suppliers, resource-based economies, developing countries, SME promotion, economic growth
    JEL: O14 Q22 R11
    Date: 2007–11

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