nep-ino New Economics Papers
on Innovation
Issue of 2010‒09‒25
eleven papers chosen by
Steffen Lippert
Massey University, Albany

  1. The role of patent protection in (clean/green) technology transfer By Hall, Bronwyn; Helmers, Christian
  2. The R&D activity of multinational enterprises in peripheral economies: evidence from the EU new member states By Narula, Rajneesh; Guimon, Jose
  3. Business model innovation: Creating value in times of change By Amit, Raphael; Zott, Christoph
  4. How effective are level-based R&D tax credits? Evidence from the Netherlands By Lokshin, Boris; Mohnen, Pierre
  5. Research Into Use: Investigating the Relationship between Agricultural Research and Innovation By Hall, Andy; Dijkman, Jeroen; Sulaiman, Rasheed
  6. The hope for neglected diseases: R&D incentives By Brigitte Granville; Eshref Trushin
  7. Indicator-based reporting on the Chinese innovation system 2010: Life sciences in China By Frietsch, Rainer; Meng, Yu
  8. Assessing Innovations in International Research and Development Practice By Pant, Laxmi P.
  9. Patterns of technological progress and corporate innovation By Waśniewski, Krzysztof
  10. Technological innovation in creative clusters. The case of laser in conservation of artworks in Florence By Luciana Lazzeretti; Francesco Capone; Tommaso Cinti
  11. How Robust is the R&D.Productivity relationship? Evidence from OECD Countries By Luintel, Kul B; Khan, Mosahid; Theodoridis, Konstantinos

  1. By: Hall, Bronwyn (University of California at Berkeley, UNU-MERIT, and Maastricht University); Helmers, Christian (CEP, London School of Economics and Political Science, and CSAE, University of Oxford)
    Abstract: Global climate change mitigation will require the development and diffusion of a large number and variety of new technologies. How will patent protection affect this process? In this paper we first review the evidence on the role of patents for innovation and international technology transfer in general. The literature suggests that patent protection in a host country encourages technology transfer to that country but that its impact on innovation and development is much more ambiguous. We then discuss the implications of these findings and other technology-specific evidence for the diffusion of climate change-related technologies. We conclude that the "gdouble externality" problem, that is the presence of both environmental and knowledge externalities, implies that IP may not be the ideal and cannot be the only policy instrument to encourage innovation in this area and that the range and variety of green technologies as well as the need for local adaptation of technologies means that patent protection may be neither available nor useful in some settings.
    Keywords: climate change, intellectual property, innovation, technology transfer
    JEL: O19 O33 O34 Q54 Q55 Q58
    Date: 2010
  2. By: Narula, Rajneesh (John H. Dunning Centre for International Business, Henley Business School, University of Reading); Guimon, Jose (Department of Economic Structure and Development Economics, Faculty of Economics, Universidad Autónoma de Madrid)
    Abstract: This paper explores the impact of MNEs on innovation systems and the policy options available for peripheral economies to attract and embed the R&D activities of MNEs. After developing the conceptual and policy framework, we discuss the case of the new member states from Central and Eastern Europe that joined the EU between 2004 and 2007. We analyse the evolution of the R&D activity of MNE subsidiaries since the 1980s, contrasting the new member states with the core and Mediterranean countries of the EU. This analysis is useful to illustrate some common challenges for peripheral economies, including the difficulty of building linkages with MNEs in high value adding activities; the risk of crowding-out of domestic R&D following cross-border acquisitions; the risk of external dependency; and the limitations of protectionist policies. We recommend that governments of peripheral economies focus their efforts on fostering a demand-oriented upgrading of technological capabilities and on stimulating domestic linkages and clusters around MNEs, rather than seeking to attract supply-driven R&D.
    Keywords: European Union, FDI, investment, innovation systems, innovation policies, linkages, MNE, multinational enterprises, new member states, peripheral economies, R&D
    JEL: O32 F23 P33
    Date: 2010
  3. By: Amit, Raphael (The Wharton School); Zott, Christoph (IESE Business School)
    Abstract: We highlight business model innovation as a way for general managers and entrepreneurs to create and appropriate value, especially in times of economic change. Business model innovation, which involves designing a modified or new activity system, relies on recombining the existing resources of a firm and its partners, and it does not require significant investments in R&D. We offer managers and researchers a conceptual primer on business model innovation emphasizing the importance of system-level thinking.
    Keywords: Business model; innovation; activity system; design; value creation;
    JEL: L22 L26 M10
    Date: 2010–07–17
  4. By: Lokshin, Boris (Maastricht University, and UNU-MERIT); Mohnen, Pierre (UNU-MERIT, Maastricht University, and CIRANO)
    Abstract: This paper examines the impact of the R&D fiscal incentive program on R&D by Dutch firms. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost-benefit analysis of the R&D incentive program. We find some evidence of additionality suggesting that the level-based program of R&D incentives in the Netherlands is effective in stimulating firms' investment in R&D. However, the hypothesis of crowding out can be rejected only for small firms. The analysis also indicates that the level-based nature of the fiscal incentive scheme leads to a substantial social dead-weight loss.
    Keywords: R&D tax credits; panel data; crowding out; user-cost elasticity
    JEL: O32 O38 H25 H50 C23
    Date: 2010
  5. By: Hall, Andy (UNU-MERIT, Research Into Use (RIU) Central Research Team (CRT)); Dijkman, Jeroen (Research Into Use (RIU) Central Research Team (CRT)); Sulaiman, Rasheed (Research Into Use (RIU) Central Research Team (CRT))
    Abstract: This paper sets out an analytical framework for doing research on the question of how to use agricultural research for innovation and impact. Its focus is the Research Into Use programme sponsored by the UK's Department for International Development (DFID). This is one example of a new type of international development programme that seeks to find better ways of using research for developmental purposes. The main analytical approach draws on contemporary innovation perspectives and focuses on understanding the ways in which the process of research is used, rather than only on how research products are transferred and adopted. It argues that there is a diversity of ways of organising innovation appropriate to different market, social, technological, institutional and policy niches. The framework developed in the paper is used to frame questions that will help RIU in its quest to provide practical policy with selection guidance in choosing the right sort of innovation support strategies for particular requirements of different niches at different points in the innovation trajectory.
    Keywords: Agricultural Research, Agricultural Innovation, Innovation Systems, Innovation Narratives, Public Policy, Private Investment
    JEL: N5 O13 O19 O22 O31 Q01 Q13 Q16 Q18
    Date: 2010
  6. By: Brigitte Granville; Eshref Trushin
    Abstract: Neglected diseases are neglected because they cannot generate enough return on R&D to pharmaceutical firms. This paper analyzes and compares existing proposals for public intervention in R&D for neglected diseases. Incentives for neglected diseases are comprehensively evaluated based on seventeen selected criteria grouped into four categories: efficiency, feasibility, fairness, and sustainability. Our conclusion is that public-private partnerships coordinated through a centralized service platform have the highest potential to satisfy the criteria for the successful development..
    Keywords: neglected diseases, incentives, pharmaceutical R&D, policy analysis
    JEL: I12 I18 H41 H87
    Date: 2010–08
  7. By: Frietsch, Rainer; Meng, Yu
    Abstract: --
    Date: 2010
  8. By: Pant, Laxmi P. (School of Environmental Design and Rural Development, University of Guelph, School of Environment, Enterprise and Development, Faculty of Environment, University of Waterloo)
    Abstract: Enhancing impacts of international development interventions has become a central issue of the twenty-first century. Conventional monitoring and evaluation (M&E) tools either focus on efficiency (output-to-input relationships) or strive to demonstrate a logical progression from specific actors and factors of an intervention to development impacts (inputs => activities => outputs => outcomes => impacts). However, in complex adaptive systems there is neither such a linear results chain nor can impacts be unambiguously attributed to an actor or a factor. Therefore, alternative ways of doing M&E focus on outcomes - the changes in behaviour and social relations - rather than on impacts, such as poverty reduction, environmental protection and social inclusion. Innovation systems thinking, particularly in renewable natural resource, agriculture and rural development, informs that the dominant paradigm of impact assessment should be complemented by social innovation assessment, providing research and development actors with critical learning lessons. This paper integrates two distant bodies of literature - the literature on impact assessment of research and development interventions, and the literature on social psychology of assessing learning and innovations. Based on case studies of a series of projects implemented in India and Nepal under DFID's 11-year Renewable Natural Resources Research Strategy (RNRRS) programme between 1995 and 2006, a social innovation assessment tool was developed and implemented. The tool includes questions about critical incidents and modes of stakeholder interactions to be ranked on a four-point scale depending on how often the statements apply to the respondents' work environments. The social innovation assessment provides critical learning lessons for social innovation generation and overall performance improvement in collaborative research and development interventions at the organisational, network and system levels.
    Keywords: Agriculture, Systems of Innovation, Social Innovation, India, Nepal, South Asia
    JEL: C4 C12 O13 O21 O31 Q2
    Date: 2010
  9. By: Waśniewski, Krzysztof
    Abstract: The bulk of the global innovative effort takes place in 5 countries: USA, Japan and China as leaders, with France and United Kingdom as immediate followers, which all display, on the long run, a negative marginal value added on innovation. The present paper attempts to answer the following question: why does most of innovative activity takes place in markets apparently hostile to innovation, i.e. giving back negative marginal value added on innovation ? A model is introduced in which any market may be represented as a Selten’s extensive game, subgames of which are played as Harsanyi’s games with imperfect information, by a temporarily finite and changing set of players. The firms’ innovative activity is a Nash’s dynamic equilibrium in which innovating is rational though suboptimal, without premium on innovation being a real economic profit. The model is the theoretical framework for the study of six cases: Ford Motor, General Motors, Honda, Chevron, Akzo Nobel and IBM, which allow to conclude that firms do innovation either because they have to or because this is their comparative advantage and they can do it in an exceptionally efficient way. As economic growth is grounded in efficient business patterns and in some countries those business patterns shape themselves in the context of a strong exogenous pressure on innovation. This leads to the development of economies which, regardless its pace of economic growth and balance of payments, come to a point when marginal value added on innovation is negative. At this point, however, incentives to innovate do not disappear and firms continue to apply the same business patterns and thus do create scientific input which gives back negative marginal real output. This pattern of global technological progress seem to be quite durable, with financial markets that allow to compensate, by successful financial placements, the downturns of innovative projects.
    Keywords: innovation; technology; technological progress; corporate strategies
    JEL: E22 L71 D20 D40 L60 B52 O3 L25 D21 D81 L10 C70 L16 L21 D52 D01 D00
    Date: 2010–05
  10. By: Luciana Lazzeretti (Department of Business Economics, University of Florence); Francesco Capone (Department of Business Economics, University of Florence); Tommaso Cinti (Department of Social and Business Studies, University of Siena)
    Abstract: The field of laser application to the restoration and cleaning of cultural assets is amongst the most thriving developments of recent times. Ablative laser technological systems are able to clean and protect inestimable works of art subject to atmospheric agents and degradation over time. This new technology, which has been developing for the last forty year, is now available to restorers and has received a significant success all over Europe. An important contribution in the process of laser innovation has been carried out in Florence by local actors belonging to a creative cluster. The objects of the analysis are the genesis of this innovation in this local Florentine context, and the relationships among the main actors who have contributed in it. The study investigates how culture can play a part in the generation of ideas and innovations, and which are the creative environments that can favour it. In this context, the issue of laser technologies for the restoration of cultural heritage has been analysed as a case study in the various paths taken by the Creative Capacity of the Culture (CCC).
    Keywords: innovation, creative cluster, art restoration
    JEL: O31 R11 L14
    Date: 2010–04
  11. By: Luintel, Kul B (Cardiff Business School); Khan, Mosahid; Theodoridis, Konstantinos (Cardiff Business School)
    Abstract: We examine the robustness of R&D and productivity relationship in a panel of 16 OECD countries. We control for fifteen productivity determinants predicted by different theoretical models. Following the advances in non-stationary panel data econometrics, we estimate four variants of thirteen specifications. All models appear co-integrated. Results are rigorously scrutinized through extensive bootstrap simulations and sensitivity checks. R&D and human capital emerge robust in all specifications making them universal drivers of productivity across nations. Most other determinants are also significant. Productivity relationships are heterogonous across countries depending on their accumulated stocks of knowledge and human capital.
    Keywords: R&D Capital Stocks; Multifactor Productivity; Heterogeneity; Panel Cointegration; Bootstrap Simulations
    JEL: F12 F2 O3 O4 C15
    Date: 2010–09

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