nep-ino New Economics Papers
on Innovation
Issue of 2016‒06‒14
twenty-two papers chosen by
Uwe Cantner
University of Jena

  1. Emergence of Innovative Manufacturing Firms across Asian Countries By Singh, Lakhwinder; Gill, Anita
  2. How Does Hedge Fund Activism Reshape Corporate Innovation? By Alon Brav; Wei Jiang; Song Ma; Xuan Tian
  3. Knowledge recombination along the technology life cycle By Martin Kalthaus
  4. Eco-innovation, sustainable supply chains and environmental performance in European industries By Valeria Costantini; Francesco Crespi; Giovanni Marin; Elena Paglialunga
  5. Mapping and Analysis of ICT-enabled Social Innovation initiatives promoting social investment in integrated approaches to the provision of social services: IESI Knowledge Map 2015 By Gianluca Misuraca; Csaba Kucsera; Fiorenza Lipparini; Christian Voigt; Raluca Radescu
  6. Innovation Led Alliances: Theory and application to the GM Plant Industry By Rousselière, Samira; Rousselière, Damien; Ramani, Shyama
  7. The Variety of Related Variety Studies: Opening the Black Box of Technological Relatedness via Analysis of Inter-firm R&D Cooperative Projects By Ji?í Blažek; David Marek; Viktor Kv?to?
  8. Claim Length as a Value Predictor of a Patent By OKADA, Yoshimi; NAITO, Yusuke; NAGAOKA, Sadao
  9. Service Innovation in Philippine Industries By Serafica, Ramonette B.
  10. RIO Country Report 2015: Cyprus By Tsipouri Lena; Athanasopoulou Sophia; Gampfer Robert
  11. Regional importance of Mittelstand firms and innovation performance By Berlemann, Michael; Jahn, Vera
  12. Knowledge, Institutions and Economic Policy: An Introduction. By Antonelli, Cristiano; David, Paul
  13. Are Agricultural R&D Returns Declining and Development Dependent? By Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
  14. The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa By Simplice Asongu; Jacinta C. Nwachukwu
  15. Exploring public perception of environmental technology over time By Braun, Carola; Rehdanz, Katrin; Schmidt, Ulrich
  16. Evaluation of Health Care Innovation Awards (HCIA): Primary Care Redesign Programs, Second Annual Report Volume I By Lorenzo Moreno; Boyd Gilman; Greg Peterson; Catherine DesRoches; Sheila Hoag; Linda Barterian; Laura Blue; Katharine Bradley; Emily Ehrlich; Kristin Geonnotti; Lauren Hula; Keith Kranker; Rumin Sarwar; Rachel Shapiro; KeriAnn Wells; Joseph Zickafoose; Sandi Nelson; Kate Stewart; Frank Yoon
  17. China as the World’s Technology Leader in the 21st Century: Dream or Reality? By Naubahar Sharif
  18. Green startups and local knowledge bases: Newborn suppliers of energy-related technologies in Italian Provinces By Colombelli, Alessandra; Quatraro, Francesco
  19. The Political Economy of Energy Innovation By Shouro Dasgupta, Shouro; De Cian, Enrica; Verdolini, Elena
  20. Entrepreneurship Capital and Regional Productivity Revisited By Massón-Guerra, José Luis; Ortín-Ángel, Pedro
  21. Markets for Ideas: Prize Structure, Entry Limits, and the Design of Ideation Contests By Pavel Kireyev
  22. Ecopreneurship: The reality cultured for today and tomorrow? By Wani, Mr. Nassir Ul Haq; Dhami, Dr. Jasdeep Kaur

  1. By: Singh, Lakhwinder; Gill, Anita
    Abstract: The recent phase of globalization has witnessed increasing influence of Asian countries in the global economy. This is supported by the rise of Asian firms and their increasing presence in economic activities across the globe through innovations in manufacturing. This paper attempts to trace the rise of Asian firms and their innovation capabilities while examining the theory of the growth of the firm and empirical literature. The comparative analysis of innovations across innovative manufacturing firms of seven Asian countries-Japan, South Korea, Malaysia, Indonesia, Philippines, China and India is based on data collected through Oslo manual approach survey conducted and compiled by UNESCO in 2013. This unique data set covers technological and social innovations which is more comprehensive and expands the scope of the concept of innovations. Important empirical evidence that has emerged from the analysis is that Asian manufacturing firms are having higher level of social innovations than technological innovations. Level of economic development is positively correlated to transition from process to product innovations across firms of both developed and developing countries. The low variations across active innovative firms in product and process innovations imply that technological innovations are stable and rising in Asia. This is supported by high degree of intensity of in-house R&D expenditure. The most important barrier to innovative and non innovative manufacturing firms is the deficiency of internal and external finances except firms of Japan and South Korea. The innovation environmental constraints are more visible across Asian firms where the national innovation system is at nascent phase. The finding based public policy suggestion is that the public policy should accord high priority in investing higher proportion of resources in innovations to relieve the firms from such constraints.
    Keywords: Systems of innovations, rise of Asian firms, technological innovations, social innovations, public policy, Asia, Manufacturing innovations, internationalization of firms.
    JEL: D2 D21 D7 L6 O1 O3
    Date: 2016–02–29
  2. By: Alon Brav; Wei Jiang; Song Ma; Xuan Tian
    Abstract: This paper studies how hedge fund activism reshapes corporate innovation. Firms targeted by hedge fund activists experience an improvement in innovation efficiency during the five-year period following the intervention. Despite a tightening in R&D expenditures, target firms experience increases in innovation output, measured by both patent counts and citations, with stronger effects seen among firms with more diversified innovation portfolios. We also find that the reallocation of innovative resources and the redeployment of human capital contribute to the refocusing of the scope of innovation. Finally, additional tests refute alternative explanations attributing the improvement to mean reversion, sample attrition, management’s voluntary reforms, or activists’ stock-picking abilities.
    JEL: G23 G3 G34 O31
    Date: 2016–05
  3. By: Martin Kalthaus (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The emergence and evolution of a technology is intimately related to it's knowledge base. A knowledge base shows certain dynamics and evolves over time. Knowledge accumulation, especially the in-flow of knowledge from sources external to an industry, is crucial for the technology's knowledge base evolution in terms of initiating, redirecting and refreshing the knowledge accumulation processes. This analysis shed light on how a technology's knowledge base is influenced by inventors who contribute to the knowledge base. Using patent data for wind power and photovoltaics, the technological contribution of an invention to the knowledge base is measured by the patent's forward citation. The inventors of these patents are categorized based on their previous inventive experience. It is tested, if the technological contribution of an inventor, in terms of the forward citation the patent receives, is correlated with his previous inventive activity. Results indicate that there are differences between the technologies. In photovoltaics, the inventor's experience does not matter, while in wind power experienced inventors contribute most, but also inventors with no previous experience and inventors in related fields contribute. The separation of the observation period according to the technologies' life cycle reveals that in early and emerging phases unrelated knowledge plays an important role for both technologies and experience and related knowledge in the case of wind power only in the later stage.
    Keywords: Patent data, Knowledge recombination, renewable energy, inventive activity, technology life cycle, rolling window regression
    JEL: O31 O32 O33 Q42
    Date: 2016–05–27
  4. By: Valeria Costantini; Francesco Crespi; Giovanni Marin; Elena Paglialunga
    Abstract: The introduction and adoption of green technologies are considered the most cost effective way to reduce environmental pressure without compromising economic competitiveness. The scientific literature has emphasized the crucial role played by diffusion pathways of green technologies along the supply value chain, but empirical quantitative findings on the effectiveness of green technologies in improving environmental performance are scarce. The objective of this paper is to highlight the role of inter-sectoral linkages in shaping the influence played by eco-innovations on sectoral environmental performance. Empirical findings show that both the direct and indirect effects of eco-innovations help reduce environmental stress and that the strength of these impacts varies across the value chain depending on the technology adopted and the type of pollutant under scrutiny. The main implications we can deduce are that, first both corporate and policy governance strategies should specifically address the goal of maximizing environmental gains that can be achieved through the development and adoption of clean technologies along the supply chain, and second both strategies should be coordinated in order to minimize the costs for reducing environmental pressures.
    Keywords: eco-innovation, environmental performance, inter-sectoral linkages, international spillovers, value chain, sustainable production, governance systems
    Date: 2016–04–29
  5. By: Gianluca Misuraca (European Commission - JRC - IPTS); Csaba Kucsera (European Commission – JRC - IPTS); Fiorenza Lipparini (The Young Foundation); Christian Voigt (ZSI - Zentrum für Soziale Innovation); Raluca Radescu
    Abstract: This report presents the analysis of the Mapping 2015 of the project 'ICT-enabled Social Innovation to support the Implementation of the Social Investment Package' (IESI). It provides an enriched picture of the existing knowledge base and evidence of how ICT-enabled social innovation initiatives that promote social investment through integrated approaches to social services delivery can contribute to the policy objectives of the EU Social Investment Package (SIP) to support the achievement of the goals of the EU 2020 strategy in terms of inclusive growth and employment. After having introduced the policy and research background outlining the overall objectives and scope of the IESI research and the aim of the mapping 2015, the report provides an overview of the methodology followed for enriching the IESI inventory of ICT-enabled social innovation initiatives through a structured dynamic database and by conducting the mapping and analysis of a selected sample of 210 initiatives. The report then updates the review of the literature and practice in domains related to the role and impact of ICT-enabled social innovation promoting social investment, with a specific focus on the area of active and healthy ageing and long-term care for older people, particularly the theme: prevention, health promotion and rehabilitation. In reviewing the state of the art the report discusses the degree of deployment of ICT-enabled social innovations that promote social investment through integrated approaches to social services provision in terms of geographical spread and different areas of social services covered, providing insight into the levels and types of deployment achieved. Further, the IESI conceptual framework which underpins the research and which has been used to guide the mapping and analysis of initiatives is discussed, proposing additional dimensions in order to enrich the framework of analysis itself. Evolving theoretical approaches are taken into account, the aim being to better explain the implications ICT-enabled social innovation initiatives have or may have for social policy reforms. This is followed by an overview of the consolidated results of the analysis of the initiatives collected as part of the IESI mapping exercise in 2014 and 2015. The analysis presents the IESI Knowledge Map 2015, which aims to provide a better understanding of the main characteristics and patterns of the initiatives identified, according to the IESI conceptual framework. Reference is also made to the different welfare systems and social services delivery models which characterise various EU countries in order to contextualise the potential role played by ICT-enabled social innovation to promote social investment through integrated approaches to social services delivery. The findings of specific thematic analyses conducted on a set of selected topics: 1) the role of social enterprise-driven ICT-enabled social innovation initiatives in support of social services delivery; and the implications of ICT-enabled social innovation that promote social investment through integrated approaches to social services delivery in support of: 2) active inclusion of young people; and 3) active and healthy ageing and long-term care for older people, particularly as regards prevention, health promotion and rehabilitation are then presented. Finally, the main conclusions deriving from the analysis of the mapping in terms of the contribution made by ICT-enabled social innovation promoting social investment through integrated approaches to social services delivery to the implementation of the SIP are outlined. This is complemented by an analysis of the gaps identified; the limitations of the current mapping exercise and recommendations for future research, as well as implications and possible directions for policy.
    Keywords: Social policy, Innovation, ICTs, Welfare, Mapping, EU
    Date: 2016–05
  6. By: Rousselière, Samira; Rousselière, Damien; Ramani, Shyama
    Abstract: The objective of the present paper is to identify the determinants of the form of collaboration initiated between an upstream innovator and a downstream producer in order to incorporate a new input and commercialize an innovation consisting of a quality enhanced final product, with an empirical application to the GM plant industry. The choice of upstream firm between license, joint venture, merger or a subsidiary is modeled as a function of three parameters: degree of quality improvement engendered by the new input, the market share of the downstream producer and the capability of the downstream producer to incorporate the new input and commercialize it successfully. We also discuss the case where the downstream firm is a cooperative.
    Keywords: biotechnology, cooperative, GMO, innovation, intellectual property, merger, joint venture, license, subsidiary, Agribusiness, Industrial Organization, Research and Development/Tech Change/Emerging Technologies, D20, D45, L10, L65, Q13,
    Date: 2016
  7. By: Ji?í Blažek; David Marek; Viktor Kv?to?
    Abstract: The aim of this article is twofold. First, on the basis of a review of recent literature on related variety, it shows that there are not only differences between ex-ante and ex-post conceptualisations of relatedness, but also several striking methodological differences within this research stream. Therefore, it is argued, the growing number of studies on relatedness using different conceptualisations and methodologies can result in a “hollowing-out” of the original explanatory power of the concept. Second, this paper aims to open the black box of relatedness among industries by exploring one of the main channels through which the effects of relatedness can operate by simultaneous application of both ex-ante and ex-post approaches to measuring relatedness. In particular, joint R&D projects among companies represent a vigorous mechanism of knowledge exchange and mutual learning, but, as of yet, these studies have not been systematically linked to the concept of related variety. Our results prove that R&D collaboration according to technological distance is indeed far from random, but, contrary to our expectation, the results show that R&D collaboration occurs most frequently among unrelated companies. Thus, the search for partners in R&D projects seems to be driven by the novelty of knowledge rather than by probabilities of its comprehension. Conceptually, these findings suggest that in reality there might be various processes that require vastly different level of relatedness. This could lead to important policy implications as overreliance upon support for related industries might be misleading.
    Keywords: related variety, inter-firm collaboration, research and development, Czechia
    JEL: R11 O14
    Date: 2016–05
  8. By: OKADA, Yoshimi; NAITO, Yusuke; NAGAOKA, Sadao
    Abstract: The claim of a patent defines the scope of patent right and provides crucial information on patent value. However, most empirical research uses only the number of claims as an indicator of patent value. We show that the breadth of a claim of Japanese patents, measured by the inverse of claim length, has significant explanatory power for patent value measured by applicant forward citations. Indeed, the explanatory power of claim breadth is comparable with that of the number of claims. The predictive power of claim breadth is stable for all quantiles in the discrete technology area, while it is far more significant for top-ranked patents in the complex technology area.
    Keywords: Claim length, patent value, quantile regression, discrete technology, complex technology, applicant forward citation
    JEL: O34
    Date: 2016–05
  9. By: Serafica, Ramonette B.
    Abstract: This paper examines the evidence on service innovation using the 2012 Census of Philippine Business and Industry and the 2009 Pilot Survey of Innovation Activities. It reveals the wide variation in R&D intensities and differences in innovation behavior between the manufacturing and services sectors, for example, with respect to information sources and innovation activities. Many similarities were also detected in terms of service product innovation, the popularity of organizational innovation, and the preference for training activities, among others. Looking at structural factors, the probit regression analyses indicate that the size of the firm is a good determinant for all types of innovation. Ownership and age were also significant for certain innovation outputs, which could help inform policies on foreign direct investment and entrepreneurship. The results of this paper reveal the importance of service innovation not only for the services sector but also for the manufacturing sector consistent with servicification. In general, different types of innovation are undertaken by industries for various reasons, and the technological and nontechnological forms of innovation complement each other. If the government aims to promote economy-wide upgrading, support for innovation should not favor only one type of innovation output or activity. Further research on innovation behavior to cover more industries will be useful in developing a comprehensive and more nuanced approach to innovation policy.
    Keywords: Philippines, services, research and development (R&D), innovation, manufacturing, servicification
    Date: 2016
  10. By: Tsipouri Lena (National and Kapodistrian University of Athens); Athanasopoulou Sophia (National and Kapodistrian University of Athens); Gampfer Robert (European Commission – JRC - IPTS)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, innovation union, Semester analysis, Cyprus
    JEL: I20 O30 Z18
    Date: 2016–05
  11. By: Berlemann, Michael; Jahn, Vera
    Abstract: Despite of the deeply rooted belief of politicians from all over the world in the important role of Mittelstand firms, there has been surprisingly little empirical research on this issue, yet. This article contributes to the literature by studying whether the relative regional importance of Mittelstand firms has an effect on regional innovation performance. Using a cross section of German NUTS-3-regions, a significantly positive relation between the relative importance of owner-managed SMEs and patent applications is identified. This finding is highly robust when controlling for spatial correlations as they often occur in highly disaggregated regional analyses.
    Keywords: Innovation,Mittelstand firms,Owner-management,SMEs,Germany
    JEL: O31 C21 D23
    Date: 2015
  12. By: Antonelli, Cristiano; David, Paul (University of Turin)
    Date: 2015–10
  13. By: Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
    Abstract: There is widespread professional consensus that agricultural research and development (R&D) receives high economic returns, though there is also concern that these returns have been declining over the past few decades and unevenly distributed among different regions in the world. This study attempts to reveal both the time trend (i.e., increasing or decreasing) and regional developmental differences in the reported returns to agricultural R&D. Using a newly updated and expanded global database of estimated returns to agricultural R&D and a robust statistical methodology, our findings suggest that after accounting for methodological changes and other study factors that have varied over time, the contemporary returns to agricultural R&D investments are as high as ever. Furthermore, this study provides evidence that regional developmental differences are attributable to more than differences in the focus of research, researcher or research methodology.
    Keywords: internal rate of return, benefit-cost ratio, research and development, Agricultural and Food Policy, International Development, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Q16, Q18, O22,
    Date: 2016
  14. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University)
    Abstract: This study assesses the mobile phone in the diffusion of knowledge for better governance in sub-Saharan Africa for the period 2000-2012. For this purpose we employ Generalised Method of Moments with forward orthogonal deviations. The empirical evidence is based on three complementary knowledge diffusion variables (innovation, internet penetration and educational quality) and ten governance indicators that are bundled and unbundled. The following are the main findings. First, there is an unconditional positive effect of mobile phone penetration on good governance. Second, the net effects on political, economic and institutional governances that are associated with the interaction of the mobile phone with knowledge diffusion variables are positive for the most part. Third, countries with low levels of governance are catching-up their counterparts with higher levels of governance. The above findings are broadly consistent with theoretical underpinnings on the relevance of mobile phones in mitigating bad governance in Africa. The evidence of some insignificant net effects and decreasing marginal impacts may be an indication that the mobile phone could also be employed to decrease government quality. Overall, this study has established net positive effects for the most part. Five rationales could elicit the positive net effects on good governance from the interaction between mobile phones and knowledge diffusion, among others, the knowledge variables enhance: reach, access, adoption, cost-effectiveness and interaction. In a nut shell, the positive net effects are apparent because the knowledge diffusion variables complement mobile phones in reducing information asymmetry and monopoly that create conducive conditions for bad governance. The contribution of the findings to existing theories and justifications of the underlying positive net effects are discussed.
    Keywords: Mobile phones; Governance; Africa
    JEL: G20 O38 O40 O55 P37
  15. By: Braun, Carola; Rehdanz, Katrin; Schmidt, Ulrich
    Abstract: Public opinion has a substantial impact on political actions. However, public opinion might be driven by temporary emotions. If these emotions cool off over time, public opinion might change as well. This paper analyses how emotions drive public opinion over time for the case of an environmental climate engineering technology, namely solar radiation management (SRM). SRM is a possible strategy to fight climate change by injection of sulphate aerosols into the stratosphere. Its potential implementation involves major risks and faces strong public opposition. Using panel survey data, we show that most respondents initially show strong negative emotions towards SRM and reject the technology. However, emotions cool off over time and acceptance increases. The increase in acceptance is larger, the longer the cooling-off period between two surveys is.
    Keywords: Public perception,social movements,Climate engineering,Cooling-off
    JEL: Q54 D19 C93
    Date: 2016
  16. By: Lorenzo Moreno; Boyd Gilman; Greg Peterson; Catherine DesRoches; Sheila Hoag; Linda Barterian; Laura Blue; Katharine Bradley; Emily Ehrlich; Kristin Geonnotti; Lauren Hula; Keith Kranker; Rumin Sarwar; Rachel Shapiro; KeriAnn Wells; Joseph Zickafoose; Sandi Nelson; Kate Stewart; Frank Yoon
    Abstract: This report, the second of three planned annual reports, synthesizes findings and draws conclusions from an implementation evaluation; including the clinicians’ experiences with the initiative; and presents preliminary estimates of program impacts by type of target population for 10 PCR programs.
    Keywords: Primary care, CMS, HCIA, Delivery systems, Workforce development, Practice transformation
    JEL: I
  17. By: Naubahar Sharif (Division of Social Science, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Naubahar Sharif, Associate Professor of HKUST’s Social Science Division, describes China’s current technological prowess in terms of research and development (R&D) intensity, personnel, number of scientific publications, and number of patent applications, all of which indicate that China is currently one of the world’s top producers of high technology research, and is set to become the world’s technology leader before the end of the century.
    Keywords: China, research and development, R&D, technology, technlogy leadership
    JEL: G28
    Date: 2016–02
  18. By: Colombelli, Alessandra; Quatraro, Francesco (University of Turin)
    Abstract: There is wide consensus about the importance of green technologies for achieving superior economic and environmental performances. The literature on their determinants has neglected the creation of green start-ups as a channel to bring about green technologies in the market. Drawing upon the knowledge spillovers theory of entrepreneurship, we test the relevance of local knowledge stocks, distinguishing between clean and dirty stocks, for the creation of green start-ups. Moreover, the effects of the technological composition of local stocks is investigated, by focusing on technological variety, both related and unrelated, as well as on coherence. Consistently with recent literature, green start-ups are associated to higher levels of variety, pointing to the relevance of diverse and heterogeneous knowledge sources, but in related and complementary technological fields.
    Date: 2016–04
  19. By: Shouro Dasgupta, Shouro; De Cian, Enrica; Verdolini, Elena
    Abstract: This paper empirically investigates the effects of environmental policy, institutions, political orientation, and lobbying on energy innovation and finds that they significantly affect the incentives to innovate and create cleaner energy efficient technologies. We conclude that political economy factors may act as barriers even in the presence of stringent environmental policy, implying that, to move towards a greener economy, countries should combine environmental policy with a general strengthening of institutional quality, consider the influence of government’s political orientation on environmental policies, and the implications of the size of energy intensive sectors in the economy.
    Keywords: Energy Innovation, Environmental Policy, Patents, Political Economy, Political Economy, C23, D02, O30, Q58,
    Date: 2016–04–30
  20. By: Massón-Guerra, José Luis; Ortín-Ángel, Pedro
    Abstract: Entrepreneurship capital has been considered in the literature to be a public good, so it will positively affect the total factor productivity of the firms in a certain region. There is evidence confirming a positive relationship between entrepreneurship capital measures and regional production. This paper argues that this evidence could also be explained by the presence of decreasing returns to scale in firms’ production technology. So previous evidence may be mixing both effects: returns to scale and public goods. This paper provides a simple methodological benchmark for distinguishing between and measuring both effects. The analysis conducted using a sample of 52 Spanish provinces for eleven years confirms the presence of decreasing returns to scale. In our data, previous interpretations of the evidence overestimate the effect of regional entrepreneurship capital as a public good on the economy.
    Keywords: Entrepreneurship Capital, Regional Productivity, Scale Economies.
    JEL: L26 O4 O40 R11
    Date: 2016–04–01
  21. By: Pavel Kireyev (Harvard Business School)
    Abstract: Contests are a popular mechanism for the procurement of innovation. In marketing, design, and other creative industries, firms use freelance marketplaces to organize contests and obtain high-quality ideas for ads, new products, and even business strategies from participants. A central question faced by contest sponsors is how to appropriately structure prizes and entry regulations. I develop an empirical model of idea generation (ideation) contests and investigate the impact of the number of prizes, prize amount, and submission limit on participation and quality outcomes using data from a popular marketing ideation platform. The model explains participant submission decisions, jury ratings, and sponsor rankings of winning submissions. Counterfactuals reveal the impact of design parameters on outcomes and provide guidance for the optimal design of ideation contests and platforms.
    Keywords: idea generation; crowdsourcing; contest design; structural estimation.
    Date: 2016–05
  22. By: Wani, Mr. Nassir Ul Haq; Dhami, Dr. Jasdeep Kaur
    Abstract: Business world, subject to typical changes evolve as a result of innovations. Innovations alter the economy and society fundamentally. To be innovative means to provide organizational and technical improvements that can be sold successfully in the marketplace. But the market systems have adversely affected the environment by: (a) failing to deal with negative environmental externalities and (b) undervaluing natural resources, leading to their over exploitation and depletion. In addition, imperfect market conditions, unclear definition of property rights and misplaced government policies (such as subsidies in various forms for exploitation of natural resources) have often led to the under-valuation of natural resources and to unsustainable exploitation. These market failures have caused irreparable damage to ecosystems and threaten to destroy life-support systems. In dealing such situations the potent weapon is ecopreneurship, which refers to a process by which entrepreneurs introduce eco-friendly (or relatively more eco-friendly) products and process into the marketplace.
    Keywords: Ecopreneurship: Ecofriendly: Go-green
    JEL: Q5 Q55
    Date: 2016–05–15

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