nep-ino New Economics Papers
on Innovation
Issue of 2015‒01‒03
thirty-six papers chosen by
Steffen Lippert
University of Auckland

  1. Export, R&D and New Products. A Model and a Test on European Industries By Dario Guarascio; Mario Pianta; Francesco Bogliacino
  2. “Cooperation in R&D, firm size and type of partnership: Evidence for the Spanish automotive industry” By Erika Raquel Badillo; Francisco Llorente; Rosina Moreno
  3. University knowledge and firm innovation. Evidence from European countries By Andrea Bellucci; Luca Pennacchio
  4. Transition to Clean Technology By Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William R. Kerr
  5. The Effects of the Government Research and Development Support Policies on the Local Firm¡¯s Innovative Performance By Deokho Cho; Kyunghee Choi
  6. A new paradigm of rural innovation: learning from and with rural people and communities By Bruno Jean
  7. Innovation and Regional Growth in Mexico: 2000-2010 By Rodriguez-Pose, Andres; Villarreal Peralta, Edna Maria
  8. R&D Internationalisation and the Global Financial Crisis By Dachs, Bernhard; Zahradnik, Georg
  9. Transition to Clean Technology By Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William Kerr
  10. The contribution of academic research to innovation and growth By Reinhilde Veugelers
  11. The Impact of Environmental Innovation on Employment Growth in Europe By Bettina Peters; Georg Licht
  12. Assessment of innovation potential for Russian regions By Stepan Zemtsov
  13. Which countries benefit most from emerging technological opportunities? By Ali Maleki; Alessandro Rosiello
  14. Ideation, Entrepreneurship, and Innovation By Link, Albert
  15. Of Time and Space: Technological Spillovers among Patents and Unpatented Innovations during Early U.S. Industrialization By B. Zorina Khan
  16. Towards Innovation Democracy? Participation, Responsibility and Precaution in Innovation Governance By Andy Stirling
  18. Ranking the performance of national innovation systems in the Iberian Peninsula and Latin America from a neo-Schumpeterian economics perspective By Paredes-Frigolett, Harold; Pyka, Andreas; Pereira, Javier; Gomes, Luiz Flávio Autran Monteiro
  19. Taxation as an instrument of stimulation of innovation-active business entities By Andrey Nechaev
  20. Innovation development and the emergence of fast-growing companies in Russian regions By Alla Sorokina
  21. Cooperation Determinants in the Atlantic Blue Economy By Pinto, Hugo
  22. Inter-regional Collaboration in Research and Innovation Strategies for Smart Specialisation (RIS3). S3 Working Paper Series no 6/2014. By Elvira Uyarra; Jens Sörvik; Inger Midtkandal
  23. The Rise of the Machines: Automation, Horizontal Innovation and Income Inequality By Hemous, David; Olsen, Morten
  24. Immigration & Ideas: What Did Russian Scientists 'Bring' to the US? By Ganguli, Ina
  25. The Impact of Public Support Intensity on Business R&D: Evidence from a Dose-Response Approach By Giovanni Cerulli; Bianca Potì
  26. International Knowledge Spillovers: The Benefits from Employing Immigrants By Jürgen Bitzer; Erkan Gören; Sanne Hiller
  27. Intra and extra regional openness: The role of ?trust? builders as Open Innovation Intermediaries By Igone Porto; Jose Ramón Otegi
  28. Tax Policy Endogeneity: Evidence from R&D Tax Credits By Chang, Andrew C.
  29. External knowledge search and use in new product development By Peeters, T.J.G.
  30. Advancement of Polish and French regions in the process of smart specialisation By Dorota Czyzewska; Anna Golejewska
  31. University research alliances, absorptive capacity, and the contribution of startups to employment growths By Toole, Andrew A.; Czarnitzki, Dirk; Rammer, Christian
  32. Resolving tensions of research utilization: The value of a usability-based approach By Benneworth,Paul; Olmos-Peñuela,Julia
  33. New policymaking in a context of Smart specialisation governance By Jaime Del Castillo; Jonatan Paton; Belen Barroeta
  34. Cairo Transport App Challenge : Leveraging ICT Entrepreneurship and Open Innovation to Solve Daily Challenges By Cecilia Paradi-Guilford; Naomi Halewood; Eman Fouad Wahby; Nehal Hassan El Kouesney; Carlo M. Rossotto
  35. The policy dilemma of the unitary patent By Jérôme Danguy; Bruno van Pottelsberghe
  36. Spatial Competition in Quality By Auer, Raphael; Sauré, Philip

  1. By: Dario Guarascio (Sapienza University of Rome); Mario Pianta (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Francesco Bogliacino (Universidad Nacional de Colombia)
    Abstract: In this article we extend the model developed by Bogliacino and Pianta (2013a, 2013b) on the link between R&D, innovation and economic performance, considering the impact of innovation of export success. We develop a simultaneous three equation model in order to investigate the existence of a ‘virtuous circle’ between industries’ R&D, share of product innovators and export market shares. We investigate empirically – at the industry level – three key relationships affecting the dynamics of innovation and export performance: first, the capacity of firms to translate their R&D efforts in new products; second, the role of innovation as a determinant of export market shares; third, the export success as a driver of new R&D efforts. The model is tested for 38 manufacturing and service sectors of six European countries over three time periods from 1995 to 2010. The model effectively accounts for the dynamics of R&D efforts, innovation and international performances of European industries. Moreover, important differences across countries emerge when we split our sample in a Northern group – Germany, the Netherlands and the United Kingdom – and a Southern group – France, Italy and Spain. We find that the ‘virtuous circle’ between innovation and competitiveness holds for Northern economies only, while Southern industries fail to translate innovation efforts into export success.
    Keywords: Export, R&D, Innovation, Three Stages Least Squares,Europe
    JEL: F12 F14 O31 O33 O52
    Date: 2014
  2. By: Erika Raquel Badillo (Faculty of Economics, University of Barcelona); Francisco Llorente (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: This paper aims to analyse cooperation in R&D in the automobile industry in Spain. It first examines to what extent firms cooperate with external actors in the field of technological innovation, and if so, with what type of cooperation partner, paying special attention to the differentiation according to the size of the firms. Second, it aims to study how the firm’s size may affect not only the decision of cooperating but also with which type of partner, while controlling for other determinants that have been considered in the literature as main drivers of collaborative activities in R&D. We use data provided by the Technological Innovation Panel in the 2006-2008 period for firms in the automotive sector. We estimate a bivariate probit model that takes into account the two types of cooperation mostly present in the automotive industry, vertical and institutional, explicitly considering the interdependencies that may arise in the simultaneous choice of both.
    Keywords: Innovation, Cooperation in R&D, Partnership, Firm size, Automotive Industry JEL classification: D22, O32, L24, L62
    Date: 2014–11
  3. By: Andrea Bellucci; Luca Pennacchio
    Abstract: In recent decades firms have intensified the exploration of external sources of knowledge to enhance their innovation capabilities. This paper presents an empirical analysis of the factors that affect the importance of academic knowledge for firms’ innovative activities. An integrated approach that simultaneously considers country-level and firm-level factors is adopted. Regarding the former factors, the analysis shows that the entrepreneurial orientation of university and the quality of academic research increase the importance of knowledge transfers from universities to firms. This suggests that the environmental and institutional context contribute to explain cross-national disparities in university-industry interactions and in the effectiveness of knowledge transfer. In regard to the latter factors, the results indicate that firms oriented toward open search strategies and radical innovations are more likely to draw knowledge from universities. Furthermore, firms belonging to high technology sectors and firms with high absorptive capacity place greater value on the various links with universities. With respect to firm size the estimates show an inverted U-shaped relation with the importance of universities as a source of knowledge. However, the greatest benefits from interacting with universities are achieved by small and young research-active firms.
    Keywords: Innovation, industry-university links, knowledge transfer, university entrepreneurial orientation
    JEL: O32 O33 L20
    Date: 2014–11
  4. By: Daron Acemoglu (Massachusetts Institute of Technology Department of Economics); Ufuk Akcigit (Department of Economics, University of Pennsylvania); Douglas Hanley (University of Pittsburgh); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation. in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be di¢ cult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    Keywords: carbon cycle, directed technological change, environment, innovation, optimal policy.
    JEL: O30 O31 O33 C65
    Date: 2014–12
  5. By: Deokho Cho; Kyunghee Choi
    Abstract: This study basically focuses on the analysis of the net effect of the government R&D support program on the local firms' technology development and its performance. And then it examines whether and how much R&D raises the effects of local firms' technology development and its performance. It basically tries to investigate the net effect of government's R&D support policies. Especially, it focuses on analyzing the net effects of R&D support policies on the innovative performance of local firms in the Gyeongbuk area where these policies were implemented for the first time in Korea. And more specifically it evaluates the performance of the government R&D support policies, using the propensity score matching in order to control the unobserved heterogeneity. This study finally suggests the R&D support policy alternatives and gives some lessons to the other policies and areas.
    Keywords: Innovation; Propensity Score Method; Regional Development; Logit Model
    Date: 2014–11
  6. By: Bruno Jean
    Abstract: Scientists and the general public agree that the rural world is characterized by a strong attachment to traditional values, and lacks a sense of initiative, creativity and innovation. This, supposedly, is why the rural world is lagging behind in development. Even if rural people are typically excluded from the creative class, the history of Québec rural communities shows that they have been and are still very creative; we can definitely learn from them. A paradigm shift is needed for a better understanding of rural innovation based on the recognition that rural people and communities are creative and have been innovative for some time. Instead of aiming to teach them how to innovate, we must try to understand the various innovations they put in place in response to multifaceted rural development challenges. Rural innovation is much more than technical innovation and new products; it reflects three basic dimensions of genuine sustainable development: managing natural environments, building instruments or institutions for economic development, and facilitating social life. Under this new paradigm of rural innovation, innovations are studied as they emerge from within rural communities, as exemplified by the Québec Rural University initiative. Rural communities should also be seen as living examples (or living labs) of innovation. "Rural clusters" are additional models for rural innovation. Public policy must therefore support empowerment and community capacity building that foster an innovative rural sector. This support covers not only technical R&D for new products but also the "social innovations" that rural communities have introduced to achieve sustainable rural development.
    Keywords: Innovation; rurality; learning; rural community; paradigm
    Date: 2014–11
  7. By: Rodriguez-Pose, Andres; Villarreal Peralta, Edna Maria
    Abstract: This paper looks at the factors driving regional growth in Mexico, paying special attention to the potentially growth-enhancing role of innovation and innovation policy. The analysis combines innovation variables with indicators linked to the formation of adequate social conditions for innovation (the social filter), and spillovers for 31 Mexican states and the Mexico City capital district (the Distrito Federal) during the period 2000-2010. The results indicate that regional economic growth across Mexican states stems from direct investment in R&D in areas with favorable social filters and which can benefit not only from knowledge spillovers, but also from being surrounded by rich neighbors with good social conditions. The results stress that, although Mexican innovation policy has been relatively well targeted in order to generate greater economic growth, its relatively modest size may have undermined the attainment of its main objectives.
    Keywords: economic growth; innovation; Mexico; regional convergence; socio-economic conditions
    JEL: O32 O33 R11 R12
    Date: 2014–09
  8. By: Dachs, Bernhard; Zahradnik, Georg
    Abstract: This paper asks if – and how – the global financial crisis of 2008/09 has affected overseas R&D activities of multinational enterprises (MNEs). Based on a data set of OECD countries, we find that the share of MNEs on total business R&D expenditure decreased for the first time since 2001 in many countries. Data for 2011 indicate that R&D internationalisation is picking up again, but has not yet reached pre-crisis levels. The impact of the crisis on foreign-owned firms may be explained by their higher export intensity, more demand-driven R&D, the concentration of MNE activity in R&D intensive manufacturing industries, and a smaller effect of public R&D support provided via stimulus packages after 2007. The crisis led to a modest re-location of MNE R&D activity from the European Union to emerging economies. The shares of the European Union on total overseas R&D activities of US firms indeed decreased between 2007 and 2011, while shares of emerging economies increased; however, in absolute terms, the gains of emerging economies only small and rather a continuation of a trend which started well before 2008.
    Keywords: global financial crisis, multinational enterprises, internationalisation, R&D, innovation, foreign-owend firms
    JEL: F23 O30 O33
    Date: 2014–12
  9. By: Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William Kerr
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation—in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    JEL: C65 O30
    Date: 2014–12
  10. By: Reinhilde Veugelers
    Abstract: To better understand how academic research can contribute to innovative growth and to assess how Europe is and could be doing in this respect, we review the analysis and evidence of business science links and Europe’s record on this. The evidence and analysis shows that the link between science and industry is neither direct nor obvious. When looking at the evidence for Europe, there is a general lagging behind relative to the US, particularly on academic patenting and university spin-offs. Patenting and licensing is only two of a number of pathways for the transfer of knowledge from universities to industry, and perhaps not even the best forms. Student & researchers’ mobility from academe to industry is a critical mechanism to transfer knowledge from the university to industry, particularly when the knowledge to be transferred is hard to codify and is embodied in human capital as is the case for science-based knowledge. Although this is an area of great importance to the study of the innovation process, only recently research has started to attempt to trace researchers’ intersectoral mobility When looking for ways to improve the transfers from science to innovation, most of the attention in the academic literature and policy is on finding the critical success factors on the science side. Most of this analysis looks at academic patenting and faculty spin-offs and comes from best US practices. These include proper intellectual property right regimes, where Bayh-Dole type of reforms which allocate property rights to the university, are considered to have cleared the path towards tech transfer in the US. Other best practices include having in place incentive schemes for tech transfers, with a fair share for researchers in royaltees and spin-offs and having in place a dedicated technology transfer office, which critical scale, expertise and experience in mediating technology transfer. But perhaps the most important success factor for tech transfer identified is the quality of the research faculty and their created ideas. Overall, the most salient policy recommendations that stems from the analysis is that policy makers looking for ways to improve the contribution of universities to innovation based growth, should take a long-term perspective for developing an industry-science eco-system, avoiding the temptation of quick “success stories”. A particular dangerous policy practice is a target focusing only on the commercialization of university technologies through academic patenting and spin-offs, ignoring the broader contribution to economic development with other pathways, most notably the research based training and mobility of human capital from universities. Policy makers should be more “innovative” in their search for effective policy interventions, venturing beyond the classic spin-off and incubator programs. At the same time, they should be more serious about evaluating their new and existing instruments. To progress, policy makers should support more systematic data collection and analysis on the various pathways for universities’ contribution to economic prosperity.
    Keywords: Academic research, Clusters, Innovation, Innovation policy, New technologies, Patents, Research
    JEL: O31 O38
    Date: 2014–12
  11. By: Bettina Peters; Georg Licht
    Abstract: This paper studies the impact of environmental innovation on employment growth using firm-level data for 16 European countries and the period 2006-2008. It extends the model by Harrison et al (2008) in order to distinguish between employment effects of environmental and non-environmental product as well as process innovation. By looking at country and sector level differences, it also generates new insights into the heterogeneity of the environmental innovation-employment growth link along different dimensions. The results demonstrate that both environmental and non-environmental product innovations are conducive to employment growth in European firms. We estimate a gross employment effect of product innovation for both types of product innovators that is very similar in nearly all countries and sectors. That is, in most cases a one-percent increase in the sales due to new products for environmental product innovators also increases gross employment by one percent. This implies that there is no evidence that environmentally-friendly new products are produced with higher or lower efficiency than old products. Yet, we observe differences in the contribution of environmental and non-environmental product innovation to employment growth across countries or sectors that are the result of differences in the average innovation engagement and innovation success across countries or sectors. The absolute contribution to employment growth is positive for both types of new products. However, we find mixed evidence for the relative importance. In manufacturing the contribution of environmental product innovators was larger than that of non-environmental product innovators in half of the countries. In services, however, non-environmental product innovators matters more for growth in the vast majority of countries. In contrast, environmental and non-environmental process innovation plays only a little role for employment growth.
    JEL: O33 Q52 J23 C21 C23
    Date: 2014–11
  12. By: Stepan Zemtsov
    Abstract: Innovation development is declared as one of the key objectives of social and economic policy in Russia. The purpose of the work was to identify regions with the highest innovation capacity and developed regional innovation system, where support of innovation activities would be the most effective. The hypothesis was that innovation capacity can be expressed as a probability function, which dependent on density and concentration of innovators and intensity of their interaction. Taking in account the hypothesis, gravity model of patent activity per capita was used to estimate creative potential of Russian regions. Patent activity in Russia declined significantly from 60000 granted patents in 1989 to 22500 in 2012. The largest cities and closed science cities are still the sources of new technologies, but activity in the Moscow core decreased from 230 to 30 patents / 100 thousand residents in 1999. Patents are not innovations in the full sense of the term, because they may not be implemented. The official Russian statistics is not perfect because of optionality of statistical forms filling. Most of approaches for capacity assessment in Russia based on index compilation and have several disadvantages: correlation between indicators, non-normal distribution of indicators, etc. Considering the disadvantages the author collected a database of 38 indicators of innovation sphere, and conducted normal distribution, correlation and factor analyses. The indicators of the first factor are: estimation of economic-geographical position; percentage of residents in cities with population more than 200 thousand people (%); percentage of people with a higher education (%), number of university students per 10 thousand people; percentage of employees in R & D sector in total employment (%); number of registered patents per 1000 employees; percentage of organizations with a website (%). Six groups of regions were identified: ?innovation core' (index = 1 ? 0.7); ?highly developed' (0.7 ? 0.6); ?regions with a strong science sector' (0.6 ? 0.5); ?regions of basic sectors of the economy' (0.5 ? 0.4); ?regions with limited potential' (0.4 ? 0.3); and ?peripheral regions' (less than 0.3). To prove the correctness of the chosen indicators probit-regression between the index and international PCT-applications was made. The regression results are compared with the results for other existing indexes. The probability of new technology generation in Moscow among all regions close to 1, and it is close to zero in Chukotka. The work has confirmed the hypothesis of high concentration of potential in major agglomerations and research centres.
    Keywords: Innovation; potential; regions; development;
    JEL: R12
    Date: 2014–11
  13. By: Ali Maleki; Alessandro Rosiello
    Abstract: Which countries benefit most from emerging technological opportunities? An enquiry into the changing geography of knowledge base complexity in the upstream petroleum industry This article aims to unravel the relationship between dynamics of knowledge base complexity and the international geography of innovation with particular emphasis on understanding catch-up processes. Putting the distinction between breadth and systemic complexity at the centre of analysis of the sectorial knowledge base, this research contributes to our understanding of the changing geography of knowledge base complexity. We argue that systemic complexity implies higher geographical proximity, because coordination and integration of different pieces of knowledge is challenging over long distances when there are intensive interactions. However, if the complexity is more of the breadth type and systemic interactions are limited, the possibility of geographical dispersion is higher. This distinction clarifies some of the ambiguities and inconsistencies in the literature with regard to the geographical implications of complexity. In fact, different dimensions of complexity have different geographical impacts. As formulated in our research hypothesis, we expect a higher number of new entries and more opportunities for latecomer catch-up, and therefore more rapid geographical dispersion, when systemic complexity is low and breadth complexity is dominant. In contrast, increasing systemic complexity implies higher barriers to entry, fewer catch-up opportunities, and slower geographical dispersion (or even higher geographical concentration). Relying on patent data, we found empirical evidence to support the hypothesis in the upstream petroleum industry. In addition, the results suggest that in dealing with systemic complexity, the cognitive and organizational proximity available in internal networks of big multinational companies may be more important than geographical proximity. The empirical results also offer some theoretical insights about the dynamics of geographical patterns of innovation. In the last period studied, we observed a high geographical dispersion of innovative activities in conjunction with a highly concentrated ownership structure. This is consistent with the nature of systemic complexity which dominated in that period, creating scale, scope and agglomeration economies. This conditions favour big multinational companies of advanced countries. Although their innovative activities are geographically distributed, in terms of ownership, they control a lion share of innovative activities in the sector. These findings offer valuable insights regarding the development of a dynamic theory of the geography of knowledge base complexity, as an interesting area for further research.
    Keywords: geography of innovation; knowledge base complexity; petroleum industry
    JEL: O30
    Date: 2014–11
  14. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The origin of ideas is an important topic to be addressed by eminent disciplinary scholars, and then debated, and then debated, and then debated yet again. Even addressing the narrower topic of the origin of entrepreneurial or innovative ideas is a bold if not presumptuous undertaking. In this paper, which forms the basis of my keynote address, I set the stage with a brief summary statement about how two historical scholars viewed the source of ideas and then I move to a brief discussion about what academic researchers in the field of entrepreneurship and innovation know about sources that influence innovative behavior. In the final section, I present some inaugural findings from my own research in this area, or more accurately, the research on which I have just begun to embark. I conclude with a question: Why do scholars of entrepreneurship, innovation, and enterprise dynamics need to know about the sources of ideas that lead to new technology and innovation, and I offer a suggestive answer.
    Keywords: entrepreneurship; innovation; ideation; technology
    JEL: L26 O31 O32
    Date: 2014–12–15
  15. By: B. Zorina Khan
    Abstract: The paper explores the role of institutional mechanisms in generating technological knowledge spillovers. The estimation is over panel datasets of patent grants, and unpatented innovations that were submitted for prizes at the annual industrial fairs of the American Institute of New York, during the era of early industrial expansion. The first section tests the hypothesis of spatial autocorrelation in patenting and in the exhibited innovations. In keeping with the contract theory of patents, the procedure identifies high and statistically significant spatial autocorrelation in the sample of inventions that were patented, indicating the prevalence of geographical spillovers. By contrast, prize innovations were much less likely to be spatially dependent. The second part of the paper investigates whether unpatented innovations in a county were affected by patenting in contiguous or adjacent counties, and the analysis indicates that such spatial effects were large and significant. These results are consistent with the argument that patents enhance the diffusion of information for both patented and unpatented innovations, whereas prizes are less effective in generating external benefits from knowledge spillovers. I hypothesize that the difference partly owes to the design of patent institutions, which explicitly incorporate mechanisms for systematic recording, access, and dispersion of technical information.
    JEL: N11 O31 O33 O34
    Date: 2014–12
  16. By: Andy Stirling (SPRU - Science Policy Research Unit, University of Sussex, UK)
    Abstract: Innovation is about more than technological invention. It involves change of many kinds: cultural, organisational and behavioural as well as technological. And there are no guarantees that any particular realised innovation will necessarily be positive. Accordingly, innovation is not a one-track race to the future. Indeed, it is not so much about optimizing a single trajectory, as it is a collaborative process for exploring diverse pathways. So, in order to realise the enormous progressive potential of particular kinds of innovation, what is needed is a more realistic, rational and vibrant ‘innovation democracy’. Yet conventional innovation policy and regulation tend simply to assume that whatever products or technologies are most energetically advanced, are in some way self-evidently beneficial. Scrutiny tends only to be through narrow forms of quantitative ‘risk assessment’ – often addressing innovation pathways at a time too late for significant change. Attention is directed only in circumscribed ways at the pace of innovation and whether risks are ‘tolerable’. The result is a serious neglect for the crucial issue of the direction of innovation in any given area – and increased vulnerability to various kinds of ‘lock in’. These patterns show up across all sectors. Beyond GM crops, for example, there exist many other innovations for improving global food sustainability. But the relatively low potential for commercial benefits often leave many promising options seriously neglected. And this ‘closing down’ of innovation is intensified by deliberate exercise of powerful interests at the earliest stages. For instance, official statistics often conceal the extent to which patterns of support are concentrated in favour of particular innovation pathways. And where uncertainties are side-lined, even scientific evidence itself can carry the imprint of vested interests. Yet these effects of power remain unacknowledged in policy making. Policy is stated simply as ‘pro-innovation’ – a self-evident technical (rather than political) matter. To address these challenges, innovation policy should more explicitly and transparently acknowledge the inherently political nature of the interests and motivations driving contending pathways. Here, this paper explores the potential for three emerging bodies of practice, relevant across all areas: participation, responsibility and precaution. Each involves a range of practical methods and new institutions. Precaution in particular is a subject of much misunderstanding and mischief. Among other qualities, this offers a crucial guard against the error of treating the absence of evidence of harm as evidence of absence of harm – and highlights the importance of wider human and environmental values. Together, qualities of participation, responsibility and precaution extend scrutiny beyond anticipated consequences alone, to also interrogate the driving purposes of innovation. They allow societies to exercise agency not only over the rate and riskiness of innovation, but also over its direction. And they offer means to enable hitherto more distributed and marginal forms of innovation – which presently manage only rarely (like renewable energy or ecological farming) to struggle to major global scale. Together, these qualities celebrate that innovation is not a matter of fear-driven technical imperatives, but of a democratic politics of contending hopes.
    Keywords: Innovation; Democracy; Precaution; Responsibility; Participation
    Date: 2014–12
  17. By: Miguelez Ernest
    Abstract: This paper documents the influence of diaspora networks of high-skilled individuals ? i.e., inventors ? on international technological collaborations. By means of gravity models, it studies the determinants of the internationalization of inventive activity between a group of industrialized countries and a sample of developing and emerging economies. The paper examines in detail the influence exerted by skilled diasporas in fostering cross-country co-inventorship as well as R&D offshoring. The study finds a strong and robust relationship between inventor diaspora and different forms of international co-patenting. However, the effect is decreasing with the level of formality of the interactions. Interestingly, some of the most successful diasporas lately documented ? namely, Chinese and Indian ones ? do not govern the results. Migrant networks may smooth the obstacles to the internationalization of inventive activity. They create trust across national boundaries, provide information on market opportunities and, in general, reduce transaction costs of economic interactions between countries. Diaspora networks have been studied in the context of trade (Gould, 1994), FDI (Javorcik et al., 2011; Kugler and Rapoport, 2007), and international diffusion of ideas (Agrawal et al., 2011; Kerr, 2008). In parallel, numerous papers have investigated the internationalization of R&D activities (Guellec and van Pottelsberghe de la Potterie, 2001; Patel and Vega, 1999; Picci, 2010). To the best of my knowledge, however, no study has looked at the role of high-skilled diasporas in fostering international technological collaborations. To anticipate the results to come, I find a robust and sizeable effect of high-skilled diasporas on the internationalization of inventive activity between developed, receiving countries and developing, sending economies. The effect is statistically and economically significant: a 10-percent increase in the inventor diaspora abroad is associated with a 1.5 to 2.2 percent increase in international patent collaborations. The evidence found survives the inclusion of a large number of controls, fixed-effects (FE), robustness checks, and identification issues. Moreover, the effect is stronger for inventor-to-inventor collaborations ? co-inventorship ? than for applicant-to-inventor co-patents ? R&D offshoring, suggesting that diaspora effects mediate particularly interpersonal relations between co-workers.
    JEL: C8 J61 O31 O33 R0
    Date: 2014–11
  18. By: Paredes-Frigolett, Harold; Pyka, Andreas; Pereira, Javier; Gomes, Luiz Flávio Autran Monteiro
    Abstract: We present the results of an empirical study of the national innovation systems of countries in the Iberian Peninsula and Latin America from a comprehensive neo-Schumpeterian economics (CNSE) perspective. The empirical study covered the period from 2000 until 2011 and the countries analyzed are Argentina, Brazil, Chile, Mexico, Portugal, and Spain. Unlike previous approaches that used cluster analyses as a methodological framework to analyze national innovation systems from a CSNE perspective, we use a novel approach based on multicriteria decision analysis (MCDA) to rank innovation performance. We show how an MCDA approach can be followed in order to rank the performance of national innovation systems and provide an analysis of the results obtained at the financial, public and industry pillars of the CNSE model.
    Keywords: Comprehensive neo-Schumpeterian Economics,Innovation Performance,Multicriteria Decision Analysis,National Innovation Systems,China
    Date: 2014
  19. By: Andrey Nechaev
    Abstract: The analysis of the theoretical material revealed the lack of consensus on defini-tion of the tax stimulation of innovation-active business entities within the re-gional taxation. The definition tax stimulation of innovation-active business en-tities is specified.
    Date: 2014–12
  20. By: Alla Sorokina
    Abstract: In my presentation I would like to describe the results of a RANEPA team research project in which I am participating. The main object of presented research is factors that determine companies' growth. The research area is limited by companies that achieved high-speed growth by improving their competitiveness and not as a result of market extension. There are a vast majority of studies that search for determinants of companies' competitiveness (description is presented in the overview article "P. Mohnen and B.H. Hall. Innovation and Productivity: an Update / Eurasian Business Review, 3(1), 2013, 47-65"). Most of them indicates that implementation of different types of innovations (product, process, marketing and organizational) are important for firm's growth. I would like to present the results of econometric and statistical analyses of internal and external factors that influence on company's growth rate. There is strong evidence that emergence of high growth companies (gazelles) is more likely in regions that are famous for their innovativeness. It is an external factor which could be called "appropriate environment for high growth firms". Statistical analyses of regional data demonstrates existence of correlation (coefficient of correlation exceeds 0.5) between the number of high-growth companies and such indicators as "The number of researchers per 10 000 people" (k = 0.59), "The ratio of number of PCT applications to the economically active population" (k = 0.56), "The share of employees with higher education in the total number of population in economically active age" (k = 0.55) and "The ratio of the number of applications for inventions submitted to the Russian Patent Bureau by national applicants, to the economically active population" (k = 0.52). The next step of analysis was to examine intramural factors that determine companies' growth rates. We used closed data collected via national survey of high growth innovative companies ("Rating-TechUp" that was completed in 2013 year - Econometric analysis provided evidence that the mains intramural factor that determine company's growth rates are share of new (innovative) production in the company's overall sales and expenditures on education of company's staff. Determined external and intramural factors could be used for elaborating recommendations for implementation of industrial policy in Russia.
    Keywords: high-growth companies; gazelles; innovative regions; determinants of competitiveness
    Date: 2014–11
  21. By: Pinto, Hugo
    Abstract: Maritime and marine activities are getting significant attention from European policy as a domain that encompasses economic sectors of traditional relevance and new ones of fast growth. This short communication presents the results of a survey applied to maritime and marine organizations in Portugal, Spain, Ireland and United Kingdom. Innovation, human capital and social capital are dimensions that deserve attention in the creation and consolidation of the Blue economy. The empirical study uses survey data to estimate an econometric ordered Logit model to understand the determinants of cooperation. The study found that the participation in innovation activities and the level of absorptive capacity are critical aspects to induce cooperation.
    Keywords: maritime cluster; proximity; innovation; social capital; human capital; absorptive capacity; LOGIT.
    JEL: C51 L21 O31 R00
    Date: 2014–06–30
  22. By: Elvira Uyarra (Manchester Institute of Innovation Research); Jens Sörvik (European Commission – JRC - IPTS); Inger Midtkandal (European Commission – JRC - IPTS)
    Abstract: The objective of this Smart Specialisation (S3) Platform Working Paper is to examine the role of inter-regional collaboration in national or regional Research and Innovation Strategies for Smart Specialisation (RIS3). It provides a conceptualisation of inter-regional collaboration within the framework of RIS3. It draws from the literature on innovation policy to develop an analytical framework to better understand the multiple dimensions of inter-regional collaboration, namely the why, what, where, who and how of collaboration; and explores how inter-regional collaboration varies according to the six steps of the RIS3 process. Finally, it looks at experiences of inter-regional collaboration for innovation in the Baltic Sea region within this framework.
    Keywords: Inter-regional collaboration, Smart Specialisation, innovation policy, regional development, Baltic Sea Region, dimensions of collaboration, trans-national collaboration
    Date: 2014–11
  23. By: Hemous, David; Olsen, Morten
    Abstract: We construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). Such an economy endogenously follows three phases. First, low-skill wages are low, which induces little automation, such that income inequality and labor's share of GDP are constant. Second, as low-skill wages increase, investment in automation is stimulated, which depresses the future growth rate of low-skill wages (potentially to negative), and reduces the total labor share. Finally, the share of automated products stabilizes and the economy moves toward an asymptotic steady state, where low-skill wages grow but at a lower rate than high-skill wages. This model therefore delivers persistently increasing wage inequality and stagnating real wages for low skill workers for an extended period of time, features of modern labor markets which have been difficult to reconcile with the theoretical literature on economic growth. We further include middle-skill workers, which allows the model to generate a phase of wage polarization after one where labor income inequality increases uniformly. Finally, we show that an endogenous labor supply response in this framework can quantitatively account for the evolution of the skill premium, the skill ratio and the labor share in the US since the 1960s.
    Keywords: automation; capital-skill complementarity; directed technical change; factor share; horizontal innovation; Income inequality; wage polarization
    JEL: E23 E25 O31 O33 O41
    Date: 2014–11
  24. By: Ganguli, Ina (Stockholm Institute of Transition Economics)
    Abstract: This paper examines how high-skilled immigrants contribute to knowledge diffusion using a rich dataset of Russian scientists and US citations to Soviet-era publications. Analysis of a panel of US cities and scientific fields shows that citations to Soviet-era work increased significantly with the arrival of immigrants. A difference-in-differences analysis with matched paper-pairs also shows that after Russian scientists moved to the US, citations to their Soviet-era papers increased relative to control papers. Both strategies reveal scientific field-specific effects. Ideas in high-impact papers and papers previously accessible to US scientists were the most likely to "spill over" to natives.
    Keywords: high skill immigration; citations; innovation; Russia
    JEL: J40 J61 O33
    Date: 2014–11–19
  25. By: Giovanni Cerulli; Bianca Potì
    Abstract: This paper presents an original econometric model for estimating a dose-response function through a regression approach when: (i) treatment is continuous, (ii) individuals may react heterogeneously to observable confounders, and (iii) selection-into-treatment may be potentially endogenous. After describing the model, two estimation procedures are suggested: one based on OLS under Conditional Mean Independence (or CMI), and one based on Instrumental-Variables (IV) under selection endogeneity. The paper goes on by presenting ctreatreg, a user-written Stata routine for an easy implementation of such a model, thereby performing a Monte Carlo experiment to test the reliability of the model and of its software implementation. Finally, an application to real data for assessing the effect of public R&D support on companies' R&D expenditure is presented and results briefly commented. The usefulness of such a model for program evaluation is clearly stressed.
    Keywords: treatment effects; dose-response function; continuous treatment; Monte Carlo; R&D support
    JEL: C21 C87 D04
    Date: 2014–11
  26. By: Jürgen Bitzer (Carl von Ossietzky University Oldenburg); Erkan Gören (Carl von Ossietzky University Oldenburg and Aarhus University); Sanne Hiller (Ruhr-University Bochum and Aarhus University)
    Abstract: This paper explores the role of immigrant employees for a firm’s capability to absorb international knowledge. Using matched employer-employee data from Denmark for the years 1999 to 2009, we are able to show that non-Danish employees contribute significantly to a firm’s economic output through their ability to access international knowledge. The immigrants’ impact increases if they come from technological advanced countries, have a high educational level, and are employed in high skilled positions. However, the latter does not hold for immigrant managers.
    Keywords: R&D Spillovers, Absorptive Capacity, Firm-Level Analysis, Foreign Workers, Immigrants
    JEL: D20 J82 L20 O30
    Date: 2014–11
  27. By: Igone Porto; Jose Ramón Otegi
    Abstract: The role of intermediaries in innovation processes has been analyzed in the literature from a dual point of view of the firm`s performances. Being considered actors involved in the knowledge diffusion and technology transfer, intermediaries are considered collaborators of small and large enterprises, as active members of industrial policy. Intermediaries are supposed to be capable of developing a variety of activities such as partners identifying, technology selection, supplier's election, or counsel in decisions making process. Besides this, the state of the art has deeply analyzed the role of public and private organizations as intermediaries, focusing on different perspectives of the innovation process. A diversity of names can be identified in the literature to refer to these intermediaries. However, the performance of these players is considered fuzzy, taking into account the potential they could achieve. In this research, a case study is proposed, where the figure of Agents of Proximity is presented. These agents perform voluntary work in developing projects of technological optimization of the firms they work with. Firstly, in order to improve the individual competitiveness of those firms. Secondly, knitting relationships between firms settle in the region they work in, in order to improve the competitiveness of the territory. These agents are people, the economic players have confidence in, mainly because of the careers these proximity actors have developed. This figure is contrasted in the region of Durango, in the Basque country (Spain). The county has a strong specialization in the metal-mechanical industry, with a high orientation towards the automotive market. The crisis has highly impacted on the region with job destruction and SMEs closures. This has generated a inter-territorial cooperation movement between inner existing players of the county: Productive subsystem, -where the value chain firms can be identified-, Knowledge Generation Subsystem ?where 2 vocational trainings, the technological center AZTERLAN, and the Automotive Intelligence Center, AIC, are located. And Institutional Subsystem, where public development agencies and associations that strengthen social capital and regional values are included.
    Keywords: cooperation; intermediation; facilitation; competitiveness
    JEL: L14 L31 O14 O22 O32
    Date: 2014–11
  28. By: Chang, Andrew C. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Because policymakers may consider the state of the economy when setting taxes, endogeneity bias can arise in regression models that estimate relationships between economic variables and taxes. This paper quantifies the policy endogeneity bias and estimates the impact of R&D tax incentives on R&D expenditures at the U.S. state level. Identifying tax variation comes from changes in federal corporate tax laws that heterogeneously impact state-level R&D tax incentives due to the simultaneity of state and federal corporate taxes. With this exogenous variation, my preferred estimates indicate a 1 percent increase in R&D tax incentives leads to a 2.8-3.8 percent increase in R&D. Alternatively, estimates that ignore endogenously determined policies indicate that a 1 percent increase in R&D tax incentives leads to a 0.4-0.7 percent increase in R&D. These results are consistent with tax policies that are implemented before an economic downturn.
    Keywords: Corporate tax; fiscal policy; R&D price elasticity; tax credits; policy endogeneity
    JEL: H20 H25 H32 H71 K34 O38
    Date: 2014–11–21
  29. By: Peeters, T.J.G. (Tilburg University, School of Economics and Management)
    Abstract: With rapidly shifting technological frontiers, innovative organizations cannot rely solely on internally generated knowledge and technologies anymore. Therefore, externally developed knowledge and technologies are getting more and more important in the development of new products. Not surprisingly, the search and use of external knowledge by innovating organizations is at the locus of scholarly attention. However, the literature has not yet been able to fully map its antecedents and consequences. To date, we only have a limited understanding of how external knowledge is used in the development of new products, especially in relation to internally generated knowledge. Furthermore, we do not have a clear picture yet of how successful organizations are in searching external knowledge. Drawing on analyses of two distinct datasets, this dissertation presents three interrelated studies that aim to advance our understanding of how external knowledge can be successfully searched and used in new product development.
    Date: 2013
  30. By: Dorota Czyzewska; Anna Golejewska
    Abstract: Elaborated in 2008 as part of the new industrial policy, the concept of smart specialisation has quickly become of key importance for the EU 2020 innovation strategy. New activities are to be nominated at the regional level that aim at exploring and discovering new technological and market opportunities in the process of entrepreneurial discovery. Smart specialisation is about defining a method to help policy-makers identify desirable areas for innovation policy intervention [Foray 2013]. Moreover, setting up national and regional smart specialisations constitutes an ex-ante conditionality for the cohesion policy programmes in the perspective 2014-2020. Smart specialization principles provide strategies and roles for all regions: leaders and less developed regions in the field of innovation and R&D. The main objective of the paper is to assess the advancement of selected Polish and French regions in the process of smart specialisation as examples of the above mentioned two types of regions present on the S3 platform. In order to achieve the main objective of the paper, the following detailed objectives are expected to be met: - presentation of the economic fundamentals of smart specialization; - analysis of the transposition of the smart specialisation concept into strategic national and regional documents in Poland and in France; - assessment of the advancement of the smart specialisation process in selected Polish and French regions (sector analysis of smart specialisations in selected regions with regard to the innovation potential emphasized in the regional innovation strategies). There is an accepted rule in Poland that smart specialisations at national and regional level should be identified independently, which means that national specialisations cannot be treated as superior to regional ones. The progress of identifying regional smart specialisations is diversified. Fifteen Polish regions are registered in S3 Platform, of which only five are peer-reviewed and eight have adopted RIS3 priorities. Worth mentioning is the fact that specialisations identified at both national and regional level are convergent which indicates that both approaches selected effective specialisations, focused on whole country's economic growth. In France, where smart specializations are only identified at regional level, 20 out of 26 regions are registered in S3 Platform, 24 of them being regions with encoded RIS3 priorities. It is expected that the research results concerning the advancement of the smart specialisation process in selected regions under analysis will give recommendations for regional authorities of Polish and French regions in terms of the smart specialisation elaboration and monitoring.
    Keywords: national and regional smart specialisation; innovation policy; France; Poland;
    JEL: R58 L52
    Date: 2014–11
  31. By: Toole, Andrew A.; Czarnitzki, Dirk; Rammer, Christian
    Abstract: This paper examines how university research alliances and other cooperative links with universities contribute to startup employment growth. We argue that 'scientific absorptive capacity' at the startup is critical for reaping the benefits from university research alliances, but not necessarily for other university connections. We also estimate the aggregate employment contribution from startup firms and attribute those employment gains to university research alliances and other university connections. We find significant contributions to employment growth from university research alliances and other university connections, but scientific absorptive capacity is critical for university research alliances. Only 7% of the startup population maintained a university research alliance, but among these firms, 3.4% of their total jobs created were attributable to their alliances. These results suggest university connections are quite important for job growth and university research alliances contributed substantially to job creation for those firms that had such alliances.
    Keywords: Academic Entrepreneurship,Startups,Firm performance,Technology Transfer,University Spinoff Policy,Human Capital
    JEL: L25 L26 J24
    Date: 2014
  32. By: Benneworth,Paul; Olmos-Peñuela,Julia
    Abstract: This is a position paper addressing the debate about the nature of how research is utilised and measured that questions the prevalent practice of measuring terminal use transactions (TUTs) – i.e. patents, spin-outs or license income – for measuring research impact. In so doing, our starting point is that a science system is a progressive business in which any piece of research builds on a whole set of antecedent research and knowledge. We contend that the extent of research utilisation across this science system is determined by the extent to which antecedent research can feed into research that ultimately feeds into these TUTs. We introduce the concept of ‘valorizers’ as research users that valorise knowledge by transforming it into the socio-economic domain, for the purpose of defining the ‘usability’ of antecedent research as the ease with which it may contribute to research that valorizers are able to absorb. We argue that the flow into the pool of ‘usable knowledge’ is ultimately dependent on the extent to which newly created scientific knowledge is cognate with valorizer needs and that more consideration need to be given to the processes by which research creates knowledge that is usable through the course of the research cycle.
    Keywords: Research utilisation, research usability, research usefulness, research valorisation, terminal use transaction, antecedent utilisation transaction, research cycle
    JEL: I23 O31 O32
    Date: 2014–11–28
  33. By: Jaime Del Castillo; Jonatan Paton; Belen Barroeta
    Abstract: In the current new competitive environment, smart specialization has emerged strongly as a territorial development model to increase the efficiency and effectiveness of economic systems. An aspect from which it differs from previous models is the special emphasis on governance. In this framework, new RIS3 smart specialization strategies represent an opportunity to lay the foundations of a new governance to generate regional innovation systems that are more coordinated, efficient and effective. However, all this raises an important sophistication from the point of view of the system and the process. Thus, a smart specialisation governance requires considering a multidimensional scale of not only agents and relations, but also policies from different competence fields (e.g. innovation, education, employment, environment, etc.). The aim of this article is to analyse the concept of governance under the frame of the new competitive context that territories are facing, and more specifically towards the territorial development model of smart specialization, from the opportunity that its multidimensional approach can offer. This can be translated into the search for new policies and processes from the combination of the traditional ones in innovation, education, employment policies. In the first chapter, an overview of the major determinants of the current context is provided. In the second chapter, our definition of governance is presented referred to a regional innovation system, understood as a system of actors and relationships covering the different dimensions regional development must consider from a coordinated, efficient and effective way. In the third chapter, our definition of governance and its elements are taken to the field of smart specialization, and the implications for innovation systems and RIS3 strategic processes are discussed. The fourth chapter seeks to go beyond the theoretical definition of governance and presents a first set of issues to consider, difficulties and recommendations arising from the implementation on the territory. Finally, the article ends with some conclusions to be considered for those exercises that are currently being put in place to move towards a regional smart specialization and that require a more sophisticated governance that will give response to its theoretical and practical implications
    Keywords: P48 Political Economy ? Legal Institutions ? Property Rights ? Natural Resources ? Energy ? Environment ? Regional Studies
    Date: 2014–11
  34. By: Cecilia Paradi-Guilford; Naomi Halewood; Eman Fouad Wahby; Nehal Hassan El Kouesney; Carlo M. Rossotto
    Keywords: Education - Knowledge for Development Transport Economics Policy and Planning Technology Industry Private Sector Development - E-Business Information and Communication Technologies - ICT Policy and Strategies Transport Industry
    Date: 2013–03
  35. By: Jérôme Danguy; Bruno van Pottelsberghe
    Abstract: This paper provides new evidence about the budgetary consequences â?? for patent offices â?? of the coexistence of the forthcoming Unitary Patent (UP) with the current European Patent (EP). Simulation results illustrate a dilemma between (1) high UP renewal fees to ensure enough financial income for all national patent offices (NPOs) and (2) low UP renewal fees to make the UP system affordable, with very few NPOs losing on financial revenues. The simulations help to understand the positions of several patent offices, and underline an alternative way to proceed with the negotiations while reducing financial risks for the whole system.
    Date: 2014–11
  36. By: Auer, Raphael; Sauré, Philip
    Abstract: We develop a model of vertical innovation in which firms incur a market entry cost and position themselves in the quality space. Once established, firms compete monopolistically, selling to consumers with heterogeneous tastes for quality. We establish existence and uniqueness of the pricing game in such vertically differentiated markets with a potentially large number of active firms. Turning to firms' entry decisions, exogenously growing productivities induce firms to enter the market sequentially at the top end of the quality spectrum. We spell out the conditions under which the entry problem is replicated over time so that each new entrant improves incumbent qualities in fixed proportions. Sequential market entry overcomes the asymmetry of the location problem, which unavoidably arises in the quality spectrum because of its top and bottom ends. Our main technical contribution lies in handling this asymmetry, a feature absent in Salop (1979) and other circular representations of Hotelling (1929) and Lancaster (1966).
    Keywords: 15/6
    JEL: D4 L11 L13
    Date: 2014–06

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