nep-ino New Economics Papers
on Innovation
Issue of 2014‒06‒07
fourteen papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Reviving demand-pull perspectives: The effect of demand uncertainty and stagnancy on R&D strategy By José García-Quevedo; Gabriele Pellegrino; Maria Savona
  2. Are Public and Private R&D Investments Complements or Substitutes? By Anna Bohnstedt
  3. Analysing the European ICT Poles of Excellence: Case Studies of Inner London East, Paris, Kreisfreie Stadt Darmstadt, Dublin and Byen Kobenhavn By Daniel Nepelski; Giuditta de Prato
  4. The Development of US Policies directed at stimulating Innovation and Entrepreneurship By David Audretsch; Taylor Aldridge
  5. Key Findings and Implications of the European ICT Poles of Excellence Project By Daniel Nepelski; Giuditta de Prato
  6. Trust and Innovation in Europe: Causal, spatial and non-linear forces By Semih Akçomak; Hanna Müller-Zick
  7. The Role of Science, Technology and Research in Economic Development By Ramon L. Clarete; Ernesto M. Pernia; Ammielou Gaduena; Adrian Mendoza
  8. Evolution of the Software-as-a-Service Innovation System Through Collective Intelligence By Kibae Kim; Jorn Altmann
  9. Exploring the interplay, differences, and commonalities between global production networks and global innovation networks of two multinational companies By Liu, Ju; Chaminade, Cristina
  10. Experts' insights into Public Policies: Byen Kobenhavn. Notes on the EIPE case studies By Jean-Paul Simon
  11. Collaboration networks in a French cluster: do partners really interact with each other? By Bastien Bernela; Rachel Levy
  12. Does Innovation Affect Credit Access? New Empirical Evidence from Italian Small Business Lending By Andrea Bellucci; Ilario Favaretto; Germana Giombini
  13. Semi-Endogenous Growth and Pollution: No Double Dividend in the Long Term By Pascal Da Costa
  14. Mainstreaming ICT enabled Innovation in Education and Training in Europe- Policy actions for sustainability, scalability and impact at system level' By Barbara Bre?ko; Panagiotis Kampylis; Yves Punie

  1. By: José García-Quevedo (Barcelona Institute of Economics, University of Barcelona, Barcelona); Gabriele Pellegrino (Barcelona Institute of Economics, University of Barcelona, Barcelona); Maria Savona (SPRU, University of Sussex, UK)
    Keywords: R&D strategy, Barriers to innovation, Demand uncertainty, Lack of demand, Innovative inputs, Panel data
    Date: 2014–05
  2. By: Anna Bohnstedt
    Abstract: We develop a general equilibrium model with heterogeneous firms à la Melitz (2003), where both the government and firms can invest into R&D to improve the country’s technological potential. A higher technological potential raises the average productivity of firms, thus implying lower consumer prices, and eventually leads to a welfare gain.
    Keywords: Heterogeneous firms; public and private R&D investments; basic research; innovation
    JEL: O3 H4
    Date: 2014–05
  3. By: Daniel Nepelski (European Commission – JRC - IPTS); Giuditta de Prato (European Commission – JRC - IPTS)
    Abstract: The EIPE project aims to identify activities related to ICT R&D and innovation which are geographically concentrated and which demonstrate high performance: the European ICT Poles of Excellence. Besides providing a comprehensive map of ICT-related activity in Europe, the project looks at five NUTS3 regions that can be considered as key elements of the European ICT landscape, i.e. Inner London East, Paris, Kreisfreie Stadt Darmstadt, Dublin and Byen Kobenhavn. The study identifies the strengths and weaknesses of each place and provides an overview of policy measures that were undertaken in each of them to facilitate the development of ICT R&D, innovation and business activities.
    Keywords: ICT; information and communication technologies; innovation, R&D, ICT industry; region; Europe; Poles of Excellence; clusters; indicators; methods
    JEL: O32 O52 R12 R28
    Date: 2014–04
  4. By: David Audretsch (Indiana University); Taylor Aldridge (Indiana University)
    Abstract: This report explores how U.S. federal institutions fund and influence innovation in the knowledge economy context and if any agencies or particular policies could be replicated in other countries. Three key U.S. agencies are identified as having significantly contributed to innovation and growth: (1) the Small Business Innovative Research program (SBIR), (2) the Advanced Technology Program (ATP) and (3) the Defense Advanced Research Program Agency (DARPA). How these agencies have advanced US innovation is explained in detail. The beginning of the report offers a lens for understanding why and how research and development does not necessarily lead to innovation. The report explores how ideas must pass through a knowledge filter in order to become successful innovations. This filter, which may impede potential innovations, means that transfers from ideas to innovations are not linear, nor are they always successful even though conditions may be suitable. Therefore, U.S. agencies are needed to help firms pass through the Valley of Death from ideas to successful commercial innovations. The report identifies US policies which could conceivably be replicated in other countries. Most notably, the authors argue that spurring innovation from European universities, with the help of an SBIR-like institution, may offer considerable help in transforming European ideas into innovations. The report concludes that the SBIR offered significant aid to innovative firms in the US and its replication by Horizon 2020 could also offer significant advantages for commercialization of inventions and ideas. The report also points out potential problems in a adopting an SBIR-like program in other countries.
    Keywords: Innovation policies, SBIR, DARPA, ATP
    JEL: L2 L5 O3 O4
    Date: 2014–04
  5. By: Daniel Nepelski (European Commission – JRC - IPTS); Giuditta de Prato (European Commission – JRC - IPTS)
    Abstract: The European ICT Poles of Excellence project aims to identify ICT R&D&I-related activities which are geographically concentrated and which demonstrate high performance in ICT innovative activities: the European ICT Poles of Excellence. It also aims to help map the dynamics of ICT-related innovation and economic geography in Europe, pointing to the presence and possibly the emergence of agglomerated and globally performing ICT activities. This policy brief offers a synthesis of the major findings of the EIPE study. It also provides some insights into the policy implications these findings indicate. The study found significant evidence to show that Europe hosts a small number of highly ICT intensive regions, i.e. EIPEs. Together they participate in a networked ecosystem made up of very strong hubs in the global ICT innovation system and a multifaceted periphery with local and global links. Despite the highly specific nature of each of these regions, including the European ICT Poles of Excellence, whose characteristics vary considerably, their identification and analysis offer some strong implications for policy.
    Keywords: ICT; information and communication technologies; innovation, R&D, ICT industry; region; Europe; Poles of Excellence; clusters; indicators; methods
    JEL: O32 O52 R12 R28
    Date: 2014–03
  6. By: Semih Akçomak (TEKPOL, Science and Technology Policy Studies, Middle East Technical University); Hanna Müller-Zick (Maastricht University)
    Abstract: This paper investigates the effect of trust on innovation. In addition to generalised trust we use a range of other indicators that could measure trust and investigate which trust related variables could explain innovation in 20 European countries divided into 135 regions. We specifically look at causal, non-linear and spatial forces. Our findings indicate that only generalised trust and non-egoistic fairness have robust effects on innovation in Europe. Using historical data on the extent and existence of universities and an instrumental variable strategy we set up a causal relationship between trust and innovation. Even after controlling for causal, spatial and non-linear forces there is a significant direct impact of trust on innovation.
    Keywords: trust, social capital, innovation, EU
    Date: 2013–12
  7. By: Ramon L. Clarete (School of Economics, University of the Philippines Diliman); Ernesto M. Pernia (School of Economics, University of the Philippines Diliman); Ammielou Gaduena (School of Economics, University of the Philippines Diliman); Adrian Mendoza (School of Economics, University of the Philippines Diliman)
    Abstract: Starting with the premise that technological innovation and economic growth are interactive and mutually reinforcing, this paper argues that in order to have a fighting chance in the Asean Economic Community (AEC), let alone global, competition, the Philippines (PH) needs to appreciably ramp up investment spending in science, engineering, and research and development. To the extent that this is achieved – along with the other ongoing policy and institutional reforms – the economy could in time be on a stronger platform to face up to AEC challenges. The paper first revisits PH’s macro-economy, poverty, and economic sectors vis-à-vis its Asean and East Asian neighbors. Next, it examines PH’s regional and global competitiveness. Then, it looks into the country’s current human resource and intellectual capital investments, mainly in higher education and technical/vocational training, as well as in R&D and innovation. A more focused discussion on the University of the Philippines – the “national university” – vis-à-vis its comparators in AEC, including ways to improve its competitiveness, follows. The final section concludes with some recommendations.
    Keywords: Science and technology (S & T), Research and development (R & D), Economic development, Higher education institutions (HEIs), Economic integration, Asean, Philippines
    JEL: F15 J24 O O3 O31
    Date: 2014–06
  8. By: Kibae Kim (College of Engineering, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University)
    Abstract: One of the notable trends in the software industry is that software vendors provide their software on a platform as a service. Software users consume those software services or compose new services by combining those existing software services. The software vendors, their services, software users, and the platform represent an open innovation system. Collective intelligence is the underlying mechanism for the cooperation between the users of the system, i.e. their continuous reuse of existing software services for the creation of new services. A successfully working software services system is a system that is continuously adapted by its users to meet their needs. The evolution of this software-as-a-service (SaaS) innovation system and the behavior of SaaS users within this system are still unknown. In this paper, we describe the evolution of a SaaS network. The SaaS network consists of nodes (i.e. software services with open interfaces) and links (i.e. the co-development relationships of software services with open interfaces). The results suggest that the SaaS network has gradually grown into a scale-free network with a slight concavity in its cumulative degree distribution. The results also suggest that the topology characteristics are invariant over time except for the early time periods. Furthermore, the results suggest that the SaaS network is not as open (i.e. inter-operable) as its technology let us expect. Considering these results, we imply that SaaS innovation is achieved by platform providers striving to capture users with a few, leading SaaS services. That means, SaaS innovation is not achieved through the possibilities of potential combinations between any kind of SaaS services as could be expected theoretically. These findings are expected to stir further research on the actual structure of open innovation systems that are driven by collective intelligence.
    Keywords: Software-as-a-Service, Service Composition, Composite Services, Mashup, Network Evolution, Scale-Free Network, Openness, Collective Intelligence, Software Industry, Software Platforms.
    JEL: D85 L14 L86 O31 O32 O33
    Date: 2013–12
  9. By: Liu, Ju (CIRCLE, Lund University); Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: The recent wave of globalisation has been characterised not only by an increased number of cross-border production networks but also by an increasing number of cross-border innovation networks. However, most literature treats global innovation networks (GINs) as an extension of global production networks (GPNs). Taking a network perspective and based on primary data, this paper explores the composition of and relations between the GPNs and GINs of two multinational companies (MNCs). It finds that the case firms’ GINs and GPNs interplay and the interplay is to a greater extent in the ICT case firm than in the automobile case firm. The case firms’ GINs have more diverse actors and are more centralised than their GPNs but the reason is different in two cases. Meanwhile, the GINs and GPNs share the same relational pattern in both case firms. The paper suggests that theoretically considering GPN and GIN as two different but interwoven layers of a MNCs’ global value creation network may provide better conceptual clarity and may generate more precise implications for practitioners and policymakers.
    Keywords: Global production network; Global innovation network; Multinational companies; Social network analysis; Sweden
    JEL: M16 O32
    Date: 2014–05–23
  10. By: Jean-Paul Simon (JPS Multimedia)
    Abstract: The European ICT Poles of Excellence (EIPE) project is a joint research project of DG CNECT and the JRC Institute for Prospective Technological Studies. It established the conditions for defining, identifying, analysing and monitoring the existence and progress of current and future European ICT Poles of Excellence (EIPE), in order to distinguish these among the many European ICT clusters, observe their dynamics and offer an analysis of their characteristics. A case study report investigates 5 selected EIPEs – Inner London East, Paris, Kreisfreie Stadt Darmstadt, Dublin and Byen Kobenhavn. It presents and interprets the data collected during the course of the project to understand the actual facts, context and story of each location, i.e. its R&D, innovation and business activity. The case study report is complemented by 4 short notes, which offer the summarised views of local experts on the role played by public policies in the emergence and the sustainability of ICT activity in their region. This note is about Byen Kobenhavn.
    Keywords: ICT, excellence, poles of excellence, Copenhagen
    Date: 2014–04
  11. By: Bastien Bernela (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers); Rachel Levy (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - Université des Sciences Sociales - Toulouse I : EA4212 - École Nationale de Formation Agronomique - ENFA - Institut d'Études Politiques [IEP] - Toulouse - Université Toulouse le Mirail - Toulouse II)
    Abstract: We discuss the common hypothesis that, in collaborative projects, all partners interact with each other in homogeneous ways. More precisely, this research aims to determine the existence and frequency of Partner interactions in a collaborative project. From a survey of participants involved in innovation projects approved by a cluster, we collect information about 754 collaboration ties. We then test the impact of several determinants on the existence and frequency of their observed interactions.
    Keywords: Collaboration tie, interaction, inter-organizational networks, cluster, complete graph
    Date: 2014–05–05
  12. By: Andrea Bellucci; Ilario Favaretto; Germana Giombini
    Abstract: In this paper we analyze the access to credit of innovative firms on the price and non-price dimensions of bank lending. Using information from two datasets, we use a propensity score matching procedure to estimate the impact of the innovative nature of firms on: (a) loan interest rates; (b) the probability of having to post collateral; and (c) the probability of overdrawing. Our analysis reveals that banks trade off higher interest rates and lower collateral requirements for firms involved in innovative processes. Further, innovative firms have a lower probability of being credit rationed than their non-innovative peers.
    Keywords: innovative firms, interest rate, firm’s financing, relationship lending
    JEL: D82 E43 D40 G21
    Date: 2014–05
  13. By: Pascal Da Costa (LGI - Laboratoire Génie Industriel - EA 2606 - Ecole Centrale Paris)
    Abstract: Literature on endogenous growth shows that a polluting economy can grow sustainably and that a double-dividend or win-win effect comprising growth and the environment is possible. Even with a semi- endogenous growth approach, which occur when the knowledge stock yield falls below the unit in the production of innovations, what happens to sustainability and the double dividend? This paper presents the first semi-endogenous growth model with pollution which answers this very question. We first illustrate that the dynamics of this economy can be sustainable even if its long-term growth rate is exogenous. To ensure the latter, a knowledge stock yield that is greater than a certain strictly positive threshold is required. We then demonstrate that the double dividend is impossible since the level of support for innovation no longer has a positive impact on the long-term growth rate. And the environmental policy always has a negative effect on growth.
    Keywords: Innovation; Pollution; Semi-Endogenous Growth; Double Dividend
    Date: 2014–05–22
  14. By: Barbara Bre?ko (JRC/IPTS); Panagiotis Kampylis (JRC/IPTS); Yves Punie (JRC/IPTS)
    Abstract: Technologies for learning are considered as key enablers of educational innovation. However, their full potential is not being realised in formal education settings and major questions are being asked about the sustainability, systemic impact and mainstreaming of ICT-enabled learning innovations (ICT-ELI) in Europe. This report presents 60 recommendations for immediate strategies and actions to be undertaken by policy-makers at local, regional, national, and EU level to further develop and mainstream ICT-ELI with systemic impact, contributing to the modernisation of Education and Training systems in Europe. The recommendations were developed in the context of the 'Up scaling Creative Classrooms in Europe (SCALE CCR) project, carried out by JRC-IPTS on behalf of the European Commission, DG Education and Culture, based on desk research; case reports from Europe and Asia; continuous stakeholders consultations; and in-depth expert interviews. The final set of recommendations was further validated and prioritised through an online consultation with 149 educational stakeholders. The recommendations were clustered into seven areas presenting a holistic agenda to guide the further development and mainstreaming of ICT-ELI: Content and Curricula; Assessment; School Staff Professional Development; Research; Organisation and Leadership; Connectedness; and Infrastructure. The number and variety of the recommendations provided depict the complexity of ICT-ELI and the systemic approach needed for their mainstreaming across Education and Training systems in Europe.
    Keywords: ICT-enabled innovation for learning, Creative Classrooms, conditions for sustainability and scalability of educational innovation, recommendations for policy actions
    JEL: I20 I21 I28 I29
    Date: 2014–03

This nep-ino issue is ©2014 by Steffen Lippert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.