nep-ino New Economics Papers
on Innovation
Issue of 2012‒06‒25
twenty-two papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. How the Small Business Innovation Research (SBIR) Program Matters By Link, Albert N.; Scott, John T.
  2. Innovative capacity and productivity: an empirical analysis of Australian grain growers By Nossal, Katarina
  3. Management of Knowledge Workers By Hvide, Hans K.; Kristiansen, Eirik Gaard
  4. Regional innovation policy and innovative behaviours. A propensity score matching evaluation By Antonioli,Davide; Marzucchi,Alberto; Montresor,Sandro
  5. Joint innovation in ICT standards: How consortia drive the volume of patent filings By Justus Baron; Yann Ménière; Tim Pohlmann
  6. Secrecy Versus Patents: Process Innovations and the Role of Uncertainty By Tapan Biswas; Jolian McHardy
  7. Regional trajectories of innovation in Green Chemistry: Evidence from the Aquitaine region (In French) By Vanessa OLTRA; Maïder SAINT-JEAN
  8. Exploring technology in the biofuels sector through patent data: the BioPat database By Valeria Costantini; Francesco Crespi; Ylenia Curci
  9. Commercializing inventions from public research: Does speed matter? By Alexander Schacht
  10. Product innovation in a vertically differentiated model By L. Filippini; C. Vergari
  11. R&D for Neglected Diseases By Nicola Dimitri
  12. A New Index Measure of Technological Capabilities for Developing Countries By Nabaz T. Khayyat; Jeong-Dong Lee
  13. Rethinking the role of intermediaries as an architect of collective exploration and creation of knowledge in open innovation By Marine Agogue; Anna Yström; Pascal Le Masson
  14. Recalibrating the Reported Rates of Return to Food and Agricultural R&D By Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
  15. Patent licensing with Bertrand competitors By Stefano Colombo; Luigi Filippini
  16. Trade, innovation and productivity By Aranzazu Crespo Rodríguez
  17. Knowledge Spillovers, Collective Entrepreneurship, & Economic Growth: The Role of Universities By Leyden, Dennis; Link, Albert N.
  18. Innovation et externalisation des services: une analyse empirique sur données d'entreprises tunisiennes By Sdiri, Hanen; Ayadi , Mohamed
  19. Innovation and market dynamics: A two-mode network approach to user-producer relation By Uwe Cantner; Marco Guerzoni; Arianna Martinelli
  20. Friends and Rivals: Modelling the Social Relations of Inventors By Lorenzo Cassi; Lorenzo Zirulia
  21. Orphan innovation, or when path-creation goes stale: a design framework to characterize path-dependence in real time By Marine Agogue; Pascal Le Masson; Douglas K. Robinson
  22. Tell Me Who You Patent With and I'll Tell You Who You Are: Evidence from Inter-Regional Patenting Networks in Three Emerging Technological Fields By Giulia Ajmone Marsan; Annalisa Primi

  1. By: Link, Albert N. (University of North Carolina at Greensboro, Department of Economics); Scott, John T. (Dartmough College)
    Abstract: This note describes several performance characteristics of the Small Business Innovation Research (SBIR) program. The numerical examples are based on our analysis of the 1,878 randomly selected projects conducted at firms that responded to the 2005 National Research Council survey. The data show that firms receiving SBIR funding are able to overcome the initial technology-based hurdles that small, entrepreneurial firms frequently face, thus facilitating a more permanent and possibly longer-term employment growth.
    Keywords: Small Business Innovation Research program; R&D; Employment growth
    JEL: L26 O31
    Date: 2012–06–07
  2. By: Nossal, Katarina
    Abstract: Slowing productivity growth in the Australian grains industry has led to calls for increasing investment in rural R&D to advance agricultural technology. However, recent research also suggests there is strong potential to increase productivity by enhancing uptake of existing innovations. The productivity gains from innovation adoption are likely to depend on the capacity of farmers to effectively select, adapt and integrate innovations into existing farming systems. In this paper, the innovative capacity of grain growers is characterised by variables related to the farm, the farmer and their operating environment. The influence of these factors on on-­‐farm innovation adoption is tested using an ordered probit model. The relationship between innovative capacity, innovation adoption and productivity is then evaluated. The results suggest that building innovative capacity is effective in increasing agricultural productivity.
    Keywords: innovation, grain growers, ordered probit, productivity, Crop Production/Industries, Productivity Analysis,
    Date: 2012–02
  3. By: Hvide, Hans K. (University of Aberdeen); Kristiansen, Eirik Gaard (Norwegian School of Economics (NHH))
    Abstract: We study how firm-specific complementary assets and intellectual property rights affect the management of knowledge workers. The main results show when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms protected weakly by complementary assets must sue leaving workers in order to obtain positive profits. Moreover, firms with more complementary assets pay higher wages and have lower turnover, but the higher pay has a detrimental effect on worker initiative. Finally, our analysis suggests that strengthening firms' property rights protection reduces turnover costs but weakens worker initiative.
    Keywords: entrepreneurship, innovation, intellectual property rights, litigation, personnel economics, R&D, start-ups, worker mobility
    JEL: J30 J60
    Date: 2012–05
  4. By: Antonioli,Davide; Marzucchi,Alberto; Montresor,Sandro
    Abstract: The paper aims at evaluating the additionality of innovation policy in terms of innovative behaviours at the regional level. Innovation behaviours are distinguished, depending on their occurrence within and across the firms and the regional boundaries.The policy role with respect to them is evaluated for a sample of firms in the Italian region of Emilia-Romagna, by making use of an original, survey-based dataset, to which a Propensity Score Matching approach is applied. Funded firms are more likely to upgrade their competencies, when compared to similar non subsidised companies. On the other hand, their innovation cooperation with other business partners is not significantly affected by the policy, both within and outside the region, unless in the interaction with particular partners. All in all, the investigated innovation policy in the ER region seems to show more of what could be termed ‘cognitive capacity additionality’, rather than ‘network additionality’. 
    Keywords: Innovation Cooperation, Regional Innovation Systems, Behavioural Additionality
    JEL: O32 O38 R11 R58
    Date: 2012–06–13
  5. By: Justus Baron (CERNA - Centre d'économie industrielle - Mines ParisTech); Yann Ménière (CERNA - Centre d'économie industrielle - Mines ParisTech); Tim Pohlmann (BERLIN INSTITUTE OF TECHNOLOGY - Berlin Institute of Technology)
    Abstract: The development of formal ICT standards is a loose form of collaborative innovation: firms first develop rival technologies, some of which are then eventually selected in the standard. Against this background, firms often use informal consortia to define a clearer technology roadmap ahead of the formal standard setting process. The paper aims to assess how such consortia influence the volume of patents filed around standards, and whether this is efficient. We show that their effect actually depends on the strength of firms' incentives to develop the standard. Consortium membership triggers a higher number of patent files when insufficient rewards for essential patents induce underinvestment in the standard. This effect is necessarily pro-efficient. In situations where excessive rewards induce patent races, consortium membership only moderately increases or even reduces their volume of patents. At least in the latter case, the effect of consortia membership is also pro-efficient.
    Date: 2012–06–11
  6. By: Tapan Biswas; Jolian McHardy
    Abstract: Whilst firms often prefer secrecy to patents and process innovations particularly lend themselves to secrecy, we establish a rationale for process innovators who patent. Using a simple two-period model, we show that under myopic optimisation, 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 proportion 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: 2012–06
  7. By: Vanessa OLTRA; Maïder SAINT-JEAN
    Abstract: This article tries to apprehend the technological trajectories that develop in Aquitaine region in the field of green chemistry (GC). Breschi’s research works are used to stress that spatial patterns of innovation vary greatly amongst sectors according to the specific features of the underlying technology, as summarized by the concept of technological regime. In such a perspective, we take into account the role of industrial structures and technological regimes to apprehend regional trajectories of innovation in the field of GC. In order to characterize such trajectories, an empirical analysis is carried out by using patent data for the period 1990-2009. We end up with an original database of GC patents for the Aquitaine region which enables us to emphasize the concentration of innovative sources as well as the specialization fields in relation with the regional industrial structure.
    Keywords: Green chemistry, Regional trajectories of innovation, Technological Regime, Patents
    JEL: O30 R11 L65
    Date: 2012
  8. By: Valeria Costantini; Francesco Crespi; Ylenia Curci
    Abstract: This paper describes the methodology, characteristics and potential use of BioPat, a dataset containing patents in the field of biofuels. The innovative methodology we use aims to solve drawbacks related to how patent data are allocated and organized in international databases. In order to create a database which includes patents strictly related to the investigated field, we propose an original method based on keywords, rather than on International Patent Classification (IPC) codes. Starting with a systematic mapping of biofuel production processes, we built a simplified but comprehensive description of the technological domain related to the production of biofuels by applying so-called process analysis. The keyword selection relies on an iterative approach, based on an analysis of recent scientific literature. The database was finalized with a series of interviews with experts in the biofuels sector, and compared with IPC-based biofuel codes, revealing improved accuracy when selecting data using our methodology.
    Keywords: Biofuels, Patents, Keywords selection method, Innovation patterns
    JEL: O31 O34 Q42 Q55
    Date: 2012–06
  9. By: Alexander Schacht (Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Germany)
    Abstract: This study addresses the determinants of time-to-licensing, defined as the elapsed time between the disclosure of an invention and the signed licensing contract, and its impact on the commercial success of the licensed inventions from public research. Using a dataset containing detailed information on the licensing activities of the Max Planck Society, I do not find significant evidence that time-to-licensing negatively influences the commercial success of the inventions disclosed between 1980 and 2004. However, separating the effect of the time-to-licensing for the inventions disclosed between 1990 and 2004, I do find a significant negative influence on the likelihood and extent of the commercial success. Thus, the pace of technology transfer has become important because of the rapidly changing business environment and technological obsolescence. Furthermore, inventions from the biomedical section, collaborative inventions with private-sector firms, and inventions that are co-invented with senior scientists require less time to become licensed.
    Keywords: academic inventions, innovation speed, technology commercialization
    JEL: L24 L25 O32
    Date: 2012–06–05
  10. By: L. Filippini; C. Vergari
    Abstract: We study the licensing incentives of an independent input producer owning a patented product innovation which allows the downstream firms to improve the quality of their final goods. We consider a general two-part tariff contract for both outside and incumbent innovators. We find that technology diffusion critically depends on the nature of market competition (Cournot vs. Bertrand). Moreover, the vertical merger with either downstream firm is always privately profitable and it is welfare improving for large innovations: this implies that not all profitable mergers should be rejected.
    JEL: L15 L13 L24
    Date: 2012–06
  11. By: Nicola Dimitri (Department of Economics and Statistics, University of Sienna, and Research Fellow, Maastricht School of Management)
    Abstract: In recent years neglected diseases attracted much attention. In particular, a debate has developed on which incentive scheme could be more effective to stimulate R&D investments, by pharmaceutical companies, to treat such diseases. The debate took place in conferences, academic journals, reports and other arenas, and mostly focused on the merits and limitations of push, pulls and mixed push-pull, incentives. Taking this widely spread debate as a starting point, within a stylized economic model this work compares the strenght of alternative incentive schemes for inducing R&D investments. The model is a contribution to shed light on the key forces driving R&D decisions. Under the assumption of expected profit maximizing firms, the main message of the paper is that co-funding incentive schemes appear to be stronger incentives, than constant-sum schemes, in inducing firms R&D effort.
    JEL: D86 L65 O31
    Date: 2012–06
  12. By: Nabaz T. Khayyat (TEMEP, College of Engineering, Seoul National University); Jeong-Dong Lee (TEMEP, College of Engineering, Seoul National University)
    Abstract: This study is conducted to develop a new measurement tool to analyze the extent of innovation by developing nations. The role of science and technology in enhancing the rate of innovation is also investigated. The existing methods for measuring innovation such as Technology Index (WEF), Technology Achievement Index (UNDP), Industrial Development Scorecard (UNIDO), ArCo (Archibugi and Coco) and Science and Technology Index (RAND Corporation) are compared and based on their limitations a new tool with higher advantage is developed. The new index labeled as Technology Creation Index (TC-index) is decomposed into six distinct components. The index is estimated for 61 developing countries from Asia, North and South America and Africa. The countries are classified into three groups based on their extent of innovation derived from principal component analysis to assess the country group heterogeneity. The results suggest that in construction of the TC-index patents granted, human development index, local availability of specialized training and resources, foreign direct investment inflows, number of citations per science and education articles, secondary gross enrollment rate and science and education journals are identified as the main contributors to the higher rate of innovation in developing nations.
    Keywords: Innovation measurement, technological infrastructure, diffusion of innovations, human skills, economic and social indicators.
    JEL: C19 C49 I32 J24 O30 O32
    Date: 2012–06
  13. By: Marine Agogue (CGS - Centre de Gestion Scientifique - Mines ParisTech); Anna Yström (Chalmers - Chalmers University of Technology - Chalmers University of Technology); Pascal Le Masson (CGS - Centre de Gestion Scientifique - Mines ParisTech)
    Abstract: This paper questions the applicability of traditional notions of intermediary activities, which are usually categorized as either brokering or networking, in cases of high uncertainty regarding technologies, markets or which actors to involve. In the case of collaborative open innovation, especially in circumstances when no single organization is able to take on the challenge alone, the activities traditionally associated with intermediation do not suffice to describe what an intermediary can do to support innovation. This paper presents two cases of intermediaries working with the early phases of traffic safety innovations, and how they have managed to develop their activities beyond solely brokering and networking, but also to take an active role in the process of joint exploration and creation of knowledge. We use a qualitative approach to analyze the two cases in order to provide examples of how rethinking intermediation activities can support open innovation in a collaborative setting. The findings suggest that intermediaries taking on a more active role, which could be described as an architect which designs prerequisites and offers leadership in the process of joint exploration and creation of knowledge.
    Date: 2012
  14. By: Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
    Keywords: Agricultural and Food Policy, Food Security and Poverty, International Development, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  15. By: Stefano Colombo (DISCE, Università Cattolica); Luigi Filippini (DISCE, Università Cattolica)
    Abstract: We study optimal licensing contracts in a differentiated Bertrand duopoly, and show that per-unit contracts are preferred to ad valorem contracts by the patentee, while welfare is higher under the ad valorem contract. The difference between Cournot and Bertrand case is explained in terms of quantity effect and profits effect.
    Keywords: Two-part contracts; patent licensing, ad valorem royalties; Bertrand
    JEL: D45
    Date: 2012–04
  16. By: Aranzazu Crespo Rodríguez (Universidad Carlos III de Madrid)
    Abstract: Empirical evidence shows that trade liberalization improves productivity not just because of a selection eect but also because of productivity gains within rms. This paper proposes a model that allows for both channels, by adding the option to innovate to a trade model. In contrast to the existing literature, the process innovation is modeled as a continuous variable and there is both a xed and a variable cost to innovate. The interaction between the innovation and export choices is key to understand the dierent equilibria in the open economy and the outcomes following a trade liberalization. I calibrate the model to match the Spanish economy and explore the consequences of dierent trade policies. Simulations reveal that a trade policy that enhances innovation does not necessarily induce larger productivity gains.
    Keywords: process innovation; firm heterogeneity; trade policy
    JEL: F12 F14 O24 O31
    Date: 2012–05–30
  17. By: Leyden, Dennis (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper develops a formal context for understanding the role that universities play in facilitating the transmission of knowledge to private-sector firms so as to generate economic growth. To the degree the university seeks to act as a complement to private-sector firm-with-firm collaborative R&D, it needs to structure its programs so that firm revenues increase and firm R&D costs, if they rise at all (and a fall would be better), rise by a smaller proportion than revenues increase. Such a structure is consistent with university interests but requires that the university be subsidized. In the absence of such support, it is unlikely that the university will have much success. The university will have to cover its costs through a fee charged to participating firms, and that will result in university being seen as a substitute rather than a complement to firm-with-firm collaborative R&D. However, while there may be good reasons why such subsidization is rational from an efficiency perspective, such arguments, as current governmental fiscal pressures in the US and other countries reveal, may not be persuasive with legislatures. Hence, there is a fundamental policy tension.
    Keywords: Collective entrepreneurship; Knowledge spillovers; University collaboration
    JEL: D73 L26 O31
    Date: 2012–06–07
  18. By: Sdiri, Hanen; Ayadi , Mohamed
    Abstract: Recently, outsourcing services became an important component of the organizational strategy of the firm. However, a large number of studies focused mainly on the determinants of outsourcing ignoring its structural effects. The aim of this paper is to examine to what extent outsourcing relationships can be a source of innovation in industrial services using a sample of 108 Tunisian service firms. Specifically, we are interested in the domestic outsourcing of auxiliary activities. Our results support the evidence of positive effects of outsourcing service activities on the capacity of innovation. This suggests that outsourcing allows Tunisian service firms to create value, to increase flexibility and to improve the quality of their services.
    Keywords: Innovation; Externalisation; Secteur des services
    JEL: D23 L21 O32 O31 L80
    Date: 2012–05
  19. By: Uwe Cantner; Marco Guerzoni; Arianna Martinelli
    Abstract: In this paper we propose a new mental representation of how markets, technology and their interaction concur in explaining the why of a certain innovation instead of another. We empirically test this theory in the telecommunication switches industry. We consider innovation as a new alignment of needs and opportunities, where markets and technology are not the sources, but the actors in this alignment process. In order to accomplish this task, we suggest proxies for technological opportunities, market needs, and, at the same time, for interactions of these two elements. We make use of a statistical tool that grasps the matching nature of this interactive phenomenon.
    Keywords: user-producer interaction, two-mode network, telecommunication manufacturing industry
    Date: 2012–06–06
  20. By: Lorenzo Cassi (CES, Université Paris 1 – Panthéon-Sorbonne, OST, France; KITeS, Bocconi University, Italy); Lorenzo Zirulia (University of Bologna, Italy; KITeS, Bocconi University, Italy; RCEA, Italy)
    Abstract: In this chapter we develop a model where a population of inventors is rival in the production of patents. Inventors are embedded in the social space, and this affects the process of knowledge creation and diffusion. Our main contribution to the existing theoretical literature on social networks and knowledge is to introduce explicitly patents and patents’ citations. This is interesting per se, and it favours a better comparability of results with those of empirical analysis on the same topic. Results from numerical simulations show that our model is able to replicate the empirical negative relationship between patents’ citations and social distance. Furthermore, different social network structures may have an impact on the exact shape of such relationship.
    Date: 2012–06
  21. By: Marine Agogue (CGS - Centre de Gestion Scientifique - Mines ParisTech); Pascal Le Masson (CGS - Centre de Gestion Scientifique - Mines ParisTech); Douglas K. Robinson (CGS - Centre de Gestion Scientifique - Mines ParisTech)
    Abstract: How can we identify whether innovation processes in an organization, a region or a sector are stagnating? Moreover, how can we assess the degree of innovation stagnation? These are issues at the core of the management of innovation literature, and the challenge of how to answer these questions in real time remains a problem yet to be solved, particularly in cases where innovation is highly expected. Most path-dependence studies observe the degree of "innovativeness" in novelty creation and analyze path-dependence and path-creation phenomena after the fact, relegating the actors to grasping at the lessons learned rather than providing them with a real-time diagnosis of their specific situation. However, in some lock-in situations where the demand for innovation is high - we label these as orphan innovation situations - characterizing the paths that are potential candidates for path-creation can be critical for the development of the industrial sector. With the goal of assessing path-dependence in real time, we develop a framework to visualize three types of innovation pathways (those explored, those not explored but visible in the present innovation field, and those potential pathways that are unknown in the present innovation field). Using C-K design theory as a conceptual framework, we go further and apply this framework to two case studies to explore its utility as a reference for assessing the degree of innovativeness for a field of innovation. We then explore the framework's potential to provide strategic intelligence to break out of stagnant situations.
    Date: 2012
  22. By: Giulia Ajmone Marsan; Annalisa Primi
    Abstract: This paper presents an overview of co-patenting trends at the national and regional level in three technology fields (biotechnology, telecommunications and renewable energy), across regions in the OECD and emerging economies, from the late 1970s to the late 2000s. After a general introduction on regional patenting activities, inter-regional co-inventorship networks in the three selected technologies are built and analysed. Different behaviors and relative network positioning emerge, in terms of top patenting regions both across technological fields and over time. Co-patenting networks increase their density over time and they show preferential attachment properties, namely regions with a central position in an early phase of development of the network tend to maintain their positioning in the future. However, there are also windows of opportunity for new central nodes to emerge in the network. Evidence shows that the structure of the network evolves differently depending on technological field and that the role of spatial proximity and capability proximity is mixed in influencing co-inventorship patterns. Co-patenting networks include star players that establish connections regardless of the proximity of partners; but also several wellperforming actors that benefit from proximity or relative proximity of agents.<BR>Cet article analyse des réseaux de co-brevets parmi les régions des pays OCDE et des économies émergentes sélectionnées, dans trois secteurs technologiques (télécommunications, biotechnologie, énergie renouvelable) sur la période 1977-2007. Après une introduction générale sur la production de brevets à niveau régional, les réseaux inter-régionaux de co-brevets dans les trois technologies sont construits et analysés. Des comportements et des positionnements différents à niveau des régions émergent, dans la structure générale des réseaux analysés, selon la technologie et dans le temps. Les réseaux de co-brevets deviennent plus denses avec le temps et montrent la propriété de l’attachement préférentiel, soit les régions avec une position centrale dans le réseau au début tendent à la garder dans le temps. Toutefois, il existe des opportunités pour atteindre un positionnement central même pour les régions qui entrent dans le réseau dans des phases successives. Les données montrent comment la structure du réseau évolue avec des caractéristiques différentes selon la classe technologique et comment la proximité spatiale et la proximité des connaissances influencent l’évolution du phénomène de la co-invention des brevets : les réseaux d’excellence contiennent les acteurs leaders, qui établissent leurs collaborations innovantes sans tenir en compte la proximité géographique, ainsi que plusieurs acteurs performants qui bénéficient aussi de la proximité géographique relative avec autres agents.
    Keywords: ICT, patents, green technologies, biotechnology, regional innovation, network analysis, co-inventorship
    JEL: D85 L00 O1 O25 O3 R12
    Date: 2012–03–20

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