nep-ino New Economics Papers
on Innovation
Issue of 2012‒03‒21
twenty-six papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Sequential Innovation and Optimal Patent Design By Christian Riis; Xianwen Shi
  2. Selection bias in innovation studies: A simple test By De Rassenfosse, Gaétan; Wastyn, Annelies
  3. High quality workplace training and innovation in highly developed countries By Christian Rupietta; Uschi Backes-Gellner
  4. Patent Citations, University Inventor Patents, and Survival in the German Laser Source Industry (1960-2005) By Luis F. Medrano E.
  5. Are complex innovators more persistent than single innovators ? An empirical analysis of innovation persistence drivers By Christian Le Bas; Nicolas Poussing
  6. Environmental innovation and employment dynamics in different technology fields: An analysis based on the German community innovation survey 2009 By Horbach, Jens; Rennings, Klaus
  7. The Exploitation of Publicly Funded Technology By Link, Albert N.; Scott, John T.
  8. Secrecy Versus Patents: Process Innovations and the Role of Uncertainty By Tapan Biswas; Jolian McHardy
  9. The world upside down By Guilhem Fabre; Stephane Grumbach
  10. R&D intensity and market valuation of firm: a study of R&D incurring manufacturing firms in India By Pramod Kumar , Naik; Krishnan, Narayanan; Puja , Padhi
  11. Policies to stimulate innovation By Andrew Atkeson; Ariel T. Burstein
  12. Motives for Participation in On-Line Open Innovation Platforms By Tuba Bakici; Esteve Almirall; Jonathan Wareham
  13. Does Cluster Policy Trigger R&D Activity? – Evidence from German Biotech Contests By Dirk Engel; Timo Mitze; Roberto Patuelli; Janina Reinkowski
  14. European cooperative R&D and firm performance By Luis Aguiar; Philippe Gagnepain
  15. Cross-border acquisitions of science-based firms: Their effect on innovation in the acquired firm and the local science By Marcela Miozzo; Lori DiVito; Panos Desyllas
  16. Small firm innovation performance and employee involvement By Andries, Petra; Czarnitzki, Dirk
  17. Smithian Growth Through Creative Organization By Legros, Patrick; Newman, Andrew F; Proto, Eugenio
  18. Web Technologies for Open Innovation By Darko Jesic; Jovana Kovacevic; Milan Stankovic
  19. Modeling and policy analysis for the U.S. Science Sector By Jacques Kibambe Ngoie; Arnold Zellner
  20. Measuring the knowledge base of regional innovation systems in Sweden By Martin, Roman
  21. Financial Innovation: The Bright and the Dark Sides By Thorsten Beck; Tao Chen; Chen Lin; Frank M. Song
  22. Giving away the game? The impact of the disclosure effect on the patenting decision By Heger, Diana; Zaby, Alexandra K.
  23. The effects of autocatalytic trade cycles on economic growth By Jurriën J. Bakker; Oscar Afonso; Sandra T. Silva
  24. From creativity to innovativeness: micro evidence from Italy By Roberto Antonietti
  25. Specialize or Coordinate? The impact of organization design on shared mental representations and innovation outcomes in joint search By Thorbjørn Knudsen; Kannan Srikanth
  26. Lead User's theory adapted to services: Towards Service User's Toolkit By Eric Stevens

  1. By: Christian Riis; Xianwen Shi
    Abstract: We study optimal patent design in a setting with sequential innovation. Firms innovate by undertaking "research" activities to generate new ideas and by undertaking "development" activities to transform these ideas into viable products. Both innovation incentives and the welfare costs of patent monopoly are multidimensional. We characterize optimal patent policy, and in particular, the tradeoff between patent length and patent breadth in this setting. The optimal size of the patent reward is smaller for patents associated with a higher deadweight loss. For a given reward size, a better patent that generates higher social surplus is shorter but broader. The optimal patent length may be finite or infinite.
    Keywords: sequential innovation, patent length, patent breadth, incentives, mechanism design
    JEL: O34 D82 K00 L00
    Date: 2012–03–08
  2. By: De Rassenfosse, Gaétan; Wastyn, Annelies
    Abstract: The study of the innovative output of firms often relies on a count of patents filed at one single office of reference such as the European Patent Office (EPO). Yet, not all firms file their patents at the EPO, raising the specter of a selection bias. Using a novel dataset of the whole population of patents by Belgian firms, we show that the single-office count results in a selection bias that affects econometric estimates of innovation production functions. We propose a methodology to evaluate whether estimates that rely on the single-office count are affected by a selection bias. --
    Keywords: Innovation production function,patent,R&D,selection bias
    JEL: O31 C18 C52 C81
    Date: 2012
  3. By: Christian Rupietta (Department of Business Administration, University of Zurich); Uschi Backes-Gellner (Department of Business Administration, University of Zurich)
    Abstract: This paper examines whether high quality, curriculum-based training at the workplace makes firms more innovative. Our dependent variable innovativeness is operationalized with four different measures: general innovation, product innovation, process innovation and patent applications. As explanatory variable we use regulated apprenticeship training programs with three to four years length of the type found in German speaking countries. We argue that this type of curriculum-based workplace training provides an additional source of knowledge in the knowledge production process through its innovative and steadily revised training curricula. We expect that this additional source of knowledge leads to higher innovation in training firms compared to non-training firms. Our empirical results show that up-to-date curriculum-based apprenticeship training is positively associated with all of the four innovation measures. Taking endogenous apprenticeship decision into account, the positive effect is only significant for general innovation and patent applications.
    Keywords: Apprenticeship training, Innovation, Education
    JEL: I20 O31
    Date: 2012–03
  4. By: Luis F. Medrano E. (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: The relationship between innovation and firm survival is analyzed for the population of German laser source producers from the beginning of the industry until 2005. Innovation effort is approximated by the generation of high quality patents in laser sources technology (IPC H01S) and by having patents with university inventors. Quality patents are defined as those in the upper quartile of the strongly right-skewed distribution of forward citations. Having quality patents is positive and statistically significantly associated with firm survival. New firms without relevant capabilities inherited at their birth may be capable of compensating for their lack of adequate pre-entry experience with corresponding innovative behavior. Having patents with university inventors is apparently not related to firm survival.
    Keywords: firm survival, patent citations, quality patents, university-inventor patents, innovation
    JEL: L25 M13 O30 O52
    Date: 2012–03–09
  5. By: Christian Le Bas (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Nicolas Poussing (CEPS/INSTEAD, 3, Avenue de la Fonte, 4364 Esch-sur-Alzette, Luxembourg)
    Abstract: This paper examines the persistence of innovation behaviour at the firm level (manufacturing and services sectors). We attempt to answer the question : does being successful in past innovation activities increase the probability of being successful in current innovation activities ? We contribute to the literature by explicitly distinguishing between single and complex innovation strategies. Using two waves of the Community Innovation Survey (2002–2004, 2006–2008) conducted in Luxembourg, the regressions show that complex innovators are more inclined to remain persistent innovators than single innovators. Within the group of single innovators pure product innovators have an advantage over pure process innovators. The results support the idea that the differences in innovation strategies across firms are important for understanding the firm innovation dynamics.
    Keywords: Innovation, Persistence, Single and Complex Innovators, CIS
    JEL: O31
    Date: 2012
  6. By: Horbach, Jens; Rennings, Klaus
    Abstract: The employment effects of environmental technologies are in the focus of politicians but there are only few studies analyzing these effects for different environmental innovation fields. We use the 2009 wave of the German part of the Community Innovation Panel (CIS) allowing for such an analysis at the firm level. The main focus of the paper lies on the analysis of the adaptation behavior of firms with respect to the relationship of employment and (environmental) innovation. We use an endogenous switching regression approach to take the simultaneous haracter of innovation activities and employment demand into consideration. Our econometric analysis shows that innovative firms in general are characterized by a significantly more dynamic employment development. Especially the realization of environmental process innovations leads to a higher employment within the firm. The theoretical background of this finding is that process innovation induced cost savings improve the competitiveness of firms. This has a positive effect on demand and thus also increases employment. A more detailed analysis by different environmental innovation fields shows that material and energy savings are positively correlated to employment because they especially help to increase the profitability and competitiveness of the firm. On the other side, air and water process innovations that are still dominated by end-of-pipe technologies have a negative impact on the employment development. --
    Keywords: Employment,Environmental Innovation,Innovation Behaviour
    JEL: Q52 Q55 J49 C25
    Date: 2012
  7. By: Link, Albert N. (University of North Carolina at Greensboro, Department of Economics); Scott, John T. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: In this paper we focus on technology that resulted from R&D projects funded by U.S. Small Business Innovation Research (SBIR) Phase II awards. We ask: Is there evidence that strategic commercial agreements allow foreign firms to exploit the technologies developed through the SBIR program and funded by U.S. taxpayers? Based on descriptive information from Phase II SBIR-funded project data collected by the National Research Council within the National Academies, we conclude that SBIR funds for Phase II projects and the technologies associated with those projects are not, to a pronounced extent, benefiting foreign firms through agreements with SBIR firms or investors. In that sense, there is no evidence that the technologies developed with funds from U.S. taxpayers are, to any significant extent, being exploited by foreign firms through commercial agreements with SBIR firms.
    Keywords: Technology; Small Entrepreneurial Firms; SBIR Program; Strategic Agreements
    JEL: L24 L26 O32
    Date: 2012–03–13
  8. By: Tapan Biswas; Jolian McHardy (Department of Economics, The University of Sheffield)
    Abstract: Whilst firms often prefer secrecy to patents and process innovations particu- larly lend themselves to secrecy, we establish a rationale for process innovators who patent. Using a simple two-period model, we show that under myopic op- timisation, the incentive to patent rather than pursue secrecy increases as the probability that the rival firm attaches to it being low-cost falls and as the pro- portion of the cost reduction due to the innovation, secured by the rival firm in the period after the patent has expired, falls. However, the gain to the innovating firm from patenting rather than secrecy strictly increases if the cost reduction due to the innovation is sufficiently small that the high-cost firm could profitably bluff that it is low-cost. Finally, allowing the low-cost firm the option of using an output signal in such cases, may make the patent strategy more or less attractive relative to the case of myopic optimisation.
    Keywords: Cournot duopoly; patenting; secrecy; uncertainty;
    JEL: D23 D43 O12 O34
    Date: 2012
  9. By: Guilhem Fabre (CCJ - Chine, Corée, Japon - CNRS : UMR8173 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Université Paris VII - Paris Diderot); Stephane Grumbach (LIAMA - NETQUEST - CIRAD - CNRS - INRA - INRIA - Chinese Academy of Science (CAS) - Institute of Automation, Chinese Academy of Sciences)
    Abstract: R&D and innovation have become much more strategic than ever before for the growth of China as well as for its global societal upgrade. The Chinese authorities have designed an innovation strategy to face new economic and social challenges. The first part of the paper is focused on the emergence of the policy, in the 2006-2020 Plan for S&T, with a historical perspective explaining the legacy of the past in today's choices. In the second part, we illustrate China's catching up strategy through four sectors (high-speed trains, aeronautics, clean energy, IT) and discuss its potential impact on the world industry.
    Keywords: Research and development; innovation; high-speed trains; aeronautics; clean energy; information technology ; China
    Date: 2012–03–07
  10. By: Pramod Kumar , Naik; Krishnan, Narayanan; Puja , Padhi
    Abstract: The present study examines the impact of R&D expenditure on market valuation of firm using Tobin’s q. The study uses firm level data for Indian manufacturing sector obtained from Prowess database of CMIE for the period 2001-2010. The study forms an unbalanced panel with 326 R&D incurring (reporting) firms and employs Pooled-OLS and fixed effects models to analyze the relationship between R&D investment and firm value. After controlling some firm specific variables the present study finds an inverted U-shaped relationship between R&D intensity and firm value indicating the diminishing marginal return to each rupee spent on R&D. This finding is consistent with the findings of Huang and Liu (2005) for Taiwan and Bracker and Krishnan (2011) for US. It indicates that, R&D investment have a positive impact on the market value of firm at the beginning, but, when the investment exceeds an optimal level, these investments lower the firm value.
    Keywords: R&D intensity, Firm value, Tobin’s q, Manufacturing firms
    JEL: L25 E44 O32 O14
    Date: 2012–02–29
  11. By: Andrew Atkeson; Ariel T. Burstein
    Date: 2011
  12. By: Tuba Bakici; Esteve Almirall; Jonathan Wareham
    Abstract: The increasing need to compete on innovation, together with the prevalence of IT in our social and economic interactions has led to a globalization in the sourcing of innovation. One of the best examples of this process is the raise of on-line Open Innovation Intermediaries as both markets for innovation and a locus where innovative solutions are devised. Therefore, understanding what are the main motivations that drive the participation of people into these intermediaries is increasingly relevant for organizations that seek to tap into the massive information potential. This is why this paper aims to develop an understanding on this matter with a modified version of Theory of planned behavior (TPB).
    Keywords: Online open innovation platforms ; Open Innovation ; Motivations ; Theory of Planned Behavior
    Date: 2011
  13. By: Dirk Engel; Timo Mitze; Roberto Patuelli; Janina Reinkowski
    Abstract: This paper evaluates the R&D enhancing effects of two large public grant schemes for the German biotechnology industry (BioRegio, BioProfi le). Both grant schemes are organized in the form of contents for cooperation with the goal to foster the performance of innovative firms by their organization in research clusters. We apply a Difference-in-Differences estimation technique in a generalized linear model framework, which allows us to control for different initial regional conditions in R&D activity of the biotech sector. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a “winner” have positive effects on R&D activity in the short-term. Apart from this direct winner effect, for the non-winning participants no beneficial indirect effect due to a mobilization of local actors during the application phase could be detected. Finally, first attempts in estimating the long-term effects of the contests for cooperation approach on the winner regions’ R&D activity in the post-treatment period show ambiguous results.
    Keywords: Biotechnology; R&D policies; cluster; difference-in-differences estimation
    JEL: O38 C23
    Date: 2012–01
  14. By: Luis Aguiar; Philippe Gagnepain
    Abstract: The goal of this paper is to assess the impact on the performance of firms that participate in Research Joint Ventures (RJVs) funded by the Fifth European Framework Programme for Research and Technological Development (EU-FP5). A special emphasis is made on the User-friendly Information Society (IST) programme, one of the most important thematic programmes of the EU-FP5. We use the funding available to the firms as an instrumental variable to account for self-selection and estimate the Local Average Treatment Effect (LATE) of participation by considering labor productivity and profit margin as performance measures. Our results show a large and positive impact of participation on the labor productivity of the firms, whereas the effect on profit margin is weaker. When taking into account the size of the RJV, we find that the positive impact on labor productivity comes mainly from participation in large projects and that participation in smaller RJVs has a negative effect on the profit margin
    Keywords: Research joint venture, R&D policy, Productivity, EU framework programme
    JEL: L24 L25 O31 O32 O38
    Date: 2012–02
  15. By: Marcela Miozzo; Lori DiVito; Panos Desyllas
    Abstract: This paper asks what happens to the technological resources and assets of host country science-based firms when they are acquired by foreign firms. Drawing on a multiple case study research design and interviews with UK biopharmaceutical firms and on patent data, the paper derives different patterns of knowledge base combinations through acquisition that have different outcomes in terms of innovation. These patterns are based on combinations of two factors: the complementarity or similarity of the technology, and the complementarity or similarity of the discovery and development capabilities of the target and acquiring firm. These combinations have clear differential outcomes in terms of investment in the acquired firm’s technology and important effects for the local science and technology system.
    Date: 2011
  16. By: Andries, Petra; Czarnitzki, Dirk
    Abstract: It is known that small firms rely mainly on the CEO's individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees' knowledge. We study to which extent using CEOs, managers and non-managerial employees' ideas enhances small firms' innovation performance. A Heckman selection model on 305 small firms shows that not only CEO's and managers', but also non-managerial employees' ideas contribute to innovation performance. However, contributions depend heavily on the individuals' area of expertise and on whether product or process innovation is desired. Our findings enrich the current view on the entrepreneurial team, but also warn against the implementation of one-size-fits-all employee involvement programs in small firms. --
    Keywords: Employee involvement,upper echelon,non-managerial employees,innovation performance,small firms
    JEL: M12 O31 O32
    Date: 2012
  17. By: Legros, Patrick (ECARES); Newman, Andrew F (Boston University); Proto, Eugenio (University of Warwick)
    Abstract: We consider a model in which appropriate organization fosters innovation, but because of contractibility problems, this bene t cannot be internalized. The organizational design element we focus on is the division of labor, which as Adam Smith argued, facilitates invention by observers of the production process. However, entrepreneurs choose its level only to facilitate monitoring their workers. Whether there is innovation depends on the interaction of the markets for labor and for inventions. A high level of specialization is chosen when the wage share is low. But low wage shares arise only when there are few entrepreneurs, which limits the market for innovations therefore and discourages inventive activity. When there are many entrepreneurs, the innovation market is large, but the rate of invention is low because there is little specialization. Rapid technological progress therefore requires a balance between these opposing effects, which occurs with a moderate relative scarcity of entrepreneurs and workers. In a dynamic version of the model in which a credit constraint limits entry into entrepreneurship, this relative scarcity depends on the wealth distribution, which evolves endogenously. There is an inverted-U relation between growth rates driven by innovation and the level of inequality. Institutional improvements have ambiguous effects on growth. In light of the model, we offer a reassessment of the mechanism by which organizational innovations such as the factory may have spawned the industrial revolution.
    Keywords: factory system, industrial revolution, technological change, contracts
    Date: 2012
  18. By: Darko Jesic (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Jovana Kovacevic (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Milan Stankovic (STIH - Université Paris IV Sorbonne - Université Paris IV - Paris Sorbonne : EA4509)
    Abstract: The spread of the open innovation model created new challenges for further implications of the Web in making the innovation happen. In this paper we present a research on the application of the Web technologies in the open innovation model. We analyze technologies for expert search, key words matching and social propagation that would enable more efficient creation of new solutions, as well as transfer of solutions between different sectors. In addition, we made a triangulation of different open innovation paradigms in the function of Web technologies that serve for their realization. By such means, we are offering a framework that can help in making decisions and in choo
    Keywords: Open Innovation ; Web ; Key Words Matching ; Social Propagation ; Expert Search
    Date: 2011–06–07
  19. By: Jacques Kibambe Ngoie; Arnold Zellner
    Abstract: This paper analyzes the production process of scientific outputs and its implications on the U.S. economy using variants of a disaggregated Marshallian Macroeconomic Model (MMM). Federal spending on scientific activities produces innovation which we measure using the number of patents awarded. Additionally, this study makes use of the Bass diffusion model to investigate how innovative patents generate new products that attract new firms in existing sectors of the U.S. economy. Firms are assumed to be Bayesian learners while forming expectations about product prices. Using a set of policy simulations, this research provides measured information on how selected science policies may affect sectoral growth of the U.S. economy. Moreover, issues such as bifurcation pertaining to dynamic models are thoroughly addressed in this paper. Among others, our findings suggest that federal spending on applied research has larger shortrun growth enhancement effects than spending on development or basic research. The return of current federal spending on applied research depends largely on past spending on basic research, something that is well captured through the lag structure imposed in our model. Recipients of federal grants for basic research often lay foundation for outstanding applied research
    Keywords: Disaggregated Marshallian Macroeconomic Model; Bass Diffusion Model; Transfer Functions; and Bayesian Learners
    Date: 2012
  20. By: Martin, Roman (CIRCLE, Lund University)
    Abstract: Within the literature on innovation systems, there are a growing number of scholars emphasizing the importance of differentiated knowledge bases underlying innovation activities. The existing work on knowledge bases is largely grounded on in-depth case studies; while surprisingly little effort has been done so far to operationalize the concept in a more systematic manner. In this paper, an attempt is made to develop a scheme of analysis to identify the knowledge base of a regional economy. We suggest using occupation data in association with a location quotient analysis, to assess whether a regional economy has a particular strength in one (or more) knowledge bases. To bring the analytical scheme into practice and assess it, we apply it on the county level in Sweden. The results are explained and contrasted with insights on the regional economies taken from secondary sources. We conclude that the proposed scheme of analysis leads to fairly reliable results, and could stimulate further empirical research on differentiated knowledge bases.
    Keywords: differentiated knowledge base; regional innovation system; Sweden
    JEL: O32
    Date: 2012–02–27
  21. By: Thorsten Beck (Tilburg University and Centre for Economic Policy Research and Hong Kong Institute for Monetary Research); Tao Chen (The Chinese University of Hong Kong); Chen Lin (The Chinese University of Hong Kong and Hong Kong Institute for Monetary Research); Frank M. Song (The University of Hong Kong)
    Abstract: "Everybody talks about financial innovation, but (almost) nobody empirically tests hypotheses about it." Frame and White (2004) The financial turmoil from 2007 onwards has spurred renewed debates on the "bright" and "dark" sides of financial innovation. Using bank-, industry- and country-level data for 32, mostly high-income, countries between 1996 and 2006, this paper is the first to explicitly assess the relationship between financial innovation in the banking sector and (i) real sector growth, (ii) real sector volatility, and (iii) bank fragility. We find evidence for both bright and dark sides of financial innovation. On the one hand, we find that a higher level of financial innovation is associated with a stronger relationship between a country's growth opportunities and capital and GDP per capita growth and with higher growth rates in industries that rely more on external financing and depend more on innovation. On the other hand, we find that financial innovation is associated with higher growth volatility among industries more dependent on external financing and on innovation and with higher idiosyncratic bank fragility, higher bank profit volatility and higher bank losses during the recent crisis.
    Keywords: Financial Innovation, Financial R&D Intensity, Bank Risk Taking, Financial Crisis, Industrial Growth, Finance and Growth
    JEL: G2 G15 G28 G01 O3
    Date: 2012–02
  22. By: Heger, Diana; Zaby, Alexandra K.
    Abstract: This article explores the propensity to patent in the light of the disclosure effect. Unlike earlier approaches concerned with the patenting decision, we take into account that a disclosure effect may decrease the merits of patenting by facilitating inventing around the patent for competitors. In our theoretical model, we find that the disclosure effect - contingent on the competitive environment of the inventor - possibly has substantial negative effects on the propensity to patent. An empirical investigation of the theoretical results finds support for the proposed effects. --
    Keywords: Patenting decision,secrecy,disclosure requirement,patent breadth,horizontal product differentiation,circular city
    JEL: L13 L24 O34
    Date: 2012
  23. By: Jurriën J. Bakker (Eindhoven University of Technology); Oscar Afonso (University of Porto, Faculty of Economics, CEFUP); Sandra T. Silva (University of Porto, Faculty of Economics, CEFUP)
    Abstract: In the first part of this paper the effects of trade cycles on economic growth are discussed to test the hypothesis of autocatalytic trade cycles, which indicates that more innovation is produced in countries that are a part of these cycles. Using United Nations data, a trade network is constructed and from this network, a set of variables that represent the participation of countries in trade cycles are constructed. A clear relation between these variables and economic growth is found. However, this relationship changes for different trade cycle sizes, categories of goods and time scales. Trade cycles also have a positive effect for the trade flows involved, although this effect differ significantly depending on the size of the trade cycle. The second part of the paper shows that the effects of trade cycles can be translated into policy recommendations. These conclusions strenghten existing literature but also add new insights to innovation policy and the pursuit of economic prosperity.
    Keywords: innovation; autocatalytic trade cycles, international trade, policy
    JEL: C3 F1 O3
    Date: 2012–03
  24. By: Roberto Antonietti
    Abstract: In this paper I assess the existence, and the magnitude, of technological externalities in the form of creativity spillovers that affect individual firms’ innovative intensity. Relying on a large sample of Italian manufacturing firms, I first estimate a knowledge production function; from this, I extract the residuals, which represent the unexplained part of the actual observed share of innovative sales, namely ‘innovativeness’. Then, I regress such a measure of firm innovativeness on a set of occupation-based, as well as density-based, indicators of creativity at the NUTS3 level, while controlling for firm localization, size and industry. I also control for endogeneity and non-linearity by estimating a two-stage least squares model and a generalized additive model respectively. My estimates show that: (i) there is a positive and highly statistically significant effect of creativity on innovativeness; (ii) the effect of creativity on actual innovative sales is weak, whereas I find a strong positive effect played by internal R&D labour; (iii) occupation-based measures of creativity outperform education-based measures of human capital; (iv) when controlling for the education content of jobs, firms’ innovativeness is affected more by the local availability of non-graduated creative workers than of graduated ones; (v) rather, a higher local availability of graduated creative workers affects the invention intensity of a city; (vi) the relationship between firm innovativeness and the local density of creative people is U-shaped, so that proximity-based knowledge externalities emerge only after a certain density threshold is reached, this occurring typically in larger urban areas, typically hosting design and service-based creative industries.
    Keywords: creativity; innovativeness; innovative sales; knowledge production function; proportions
    JEL: L60 O31 R10
    Date: 2011
  25. By: Thorbjørn Knudsen; Kannan Srikanth
    Abstract: The integration of specialists’ search efforts is one of the principal purposes of organization. Integration mechanisms enable joint search by allowing interdependent others to form shared mental models of the joint task. However, apart from the formation of shared mental models, organization also impacts the locus of search and specialization in innovative conditions. This interplay between the emergence of self (specialized) knowledge and shared knowledge is likely to significantly impact joint search outcomes. In this paper we propose a computational model that examines the trade-off in the development of specialized vs. shared knowledge and how it impacts joint search for different innovation landscapes and different levels of agent ability. Our results point to the importance of not generalizing from single searcher problems for joint searcher problems.
    Keywords: Organization Design ; Coordination ; Joint Search; Shared Mental Models
    Date: 2011
  26. By: Eric Stevens (ESCEM Tours Poitiers - ESCEM School of Business and Management - Groupe école supérieure de commerce et de management Tours-Poitiers)
    Abstract: It makes no doubt that the development of innovative products benefits from being considered under the perspective of networks and communities. Lead User's theory (LUT) focused mainly on the process by which user innovation may be transformed into commercial product. However, when LUT methodology was proven successful for products such as scientific instrument, sports equipment or even medical instruments, very few experiences were reported for services. Thus, the specific contribution of the paper is to adapt lead user's theory and practice to the specific case of the intangible processes and services such as Banks, Call centers, etc...., in the purpose of improving efficiency of innovative efforts. In a first theoretical part, the paper reviews service characteristics which prevent adoption of LUT methods. Four main factors are identified and investigated in details: intangibility, inseparability, process based aspects of services and investment cycle in services. Based on these analyses, the paper suggests a specific framework for applying LUT methodologies in the case of services. It details first recommendation on the way to select potential lead users. Then, it recommends the way lead users should be associated and involved so that potential innovation may be proposed. The concept of communities applied to services is proposed and discussed from managerial point of view. Perspective of further research is then detailed.
    Keywords: Lead Users, Service Innovation, new service development, innovation tools
    Date: 2010–06

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