nep-ino New Economics Papers
on Innovation
Issue of 2016‒08‒28
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Working Paper, Rents and Inefficiency in the Patent and Copyright System: Is There a Better Route? By Dean Baker
  2. A Complexity-Theoretic Perspective on Innovation Policy By Koen Frenken
  3. Policy capacities for new regional industrial path development – The case of new media and biogas in southern Sweden By Martin, Hanna; Martin, Roman
  4. Managing Innovation under Competitive Pressure from Informal Producers Managing Innovation under Competitive Pressuire from Informal Producers By Pedro Mendi; Rodrigo Costamagna
  5. Post Catch-up with Market Cultivation and Product Servicizing: Case of Taiwan’s Transportation Equipment Industries By Chen, Shin-Horng; Wen, Pei-Chang
  6. Economic Growth and Technological Progress in Turkey: An Analysis of Schumpeterian Mechanisms By Attar, M. Aykut
  7. Health Care Quality, Income Transfer and International Trade: A Theoretical Analysis By Chatterjee, Tonmoy; Gupta, Kausik
  8. The Swedish National Innovation Council: Innovation policy governance to replace linearity with holism By Edquist, Charles
  9. Globalization and the markups of European firms By Gabor Bekes; Cecilia Hornok; Balázs Muraközy
  10. Towards a Smart Specialization Strategy for Haifa, Israel By Benner, Maximilian; Bieringer, Lukas; Knaupp, Matthias; Wittemaier, Jana; Wruck, Adrian
  11. Barriers to identification and implementation of energy efficiency mechanisms and enhancing renewable energy technologies in the Caribbean By McGuire, Gregory

  1. By: Dean Baker
    Abstract: This paper analyzes the evidence for rents due to the patent and copyright systems for financing innovation and creative work. It notes research suggesting that in both the patent and copyright system, the costs in the form of monopoly pricing and rent-seeking activity outweigh the benefits. It then proposes alternatives to the patent and copyright system. The Kauffman Foundation helped support this work.
    JEL: I I1 I18 I14 O O31 O33 O34 K K11
    Date: 2016–08
  2. By: Koen Frenken
    Abstract: : It is argued that innovation policy based on notions of market failure or system failure is too limited in the context of current societal challenges. I propose a third, complexity-theoretic approach. This approach starts from the observation that most innovations are related to existing activities, and that policy’s additionality is highest for unrelated diversification. To trigger unrelated diversification into activities that contribute to solving societal challenges, government’s main task is to organize the process of demand articulation. This process leads to clear and manageable societal objectives that effectively guide a temporary collation of actors to develop solutions bottom-up. The combination of a broad coalition, a clear objective and tentative governance are the means to cope with the inherent complexity of modern-day innovation
    Date: 2016–08
  3. By: Martin, Hanna (CIRCLE, Lund University); Martin, Roman (University of Gothenburg)
    Abstract: Over the past few years, a growing body of work in economic geography and innovation studies has enhanced our understanding of forms and determinants of regional industrial path development. The importance of policy, however, has received limited attention and accordingly, the role of policy for the emergence and development of new regional industrial growth paths remains largely unexplored. This paper takes an institutional perspective and suggests that the regional innovation system (RIS) approach can contribute to conceptualizing and analysing the role of policy for new regional industrial path development. We argue that in order to turn regional preconditions into new growth paths, RIS require strong policy capacities, consisting of formal and governance capacities. In the empirical part, we analyse the emergence and further development of two new growth paths in the region of Scania in southern Sweden, namely biogas and new media. Based on personal interviews with policy makers, representatives from knowledge and supporting organizations and firms as well as a document analysis, we investigate how policy interventions have influenced the rise and evolution of these two industries. We show that in both cases policy-led initiatives have played an important role in enabling new path development. We find that policy can play multiple roles in nurturing and maintaining new growth paths and that these are closely interlinked with particular policy capacities of RIS.
    Keywords: new path development; regional policy; regional innovation system; capacity building
    JEL: O10 O30 O38 R11 R58
    Date: 2016–08–23
  4. By: Pedro Mendi (Navarra Center for International Development); Rodrigo Costamagna (INALDE Business School, Universidad de la Sabana)
    Abstract: This paper studies the impact on innovation of competition against firms in the informal sector. Using the World Bank’s Enterprise Survey data from a sample of African and Latin American countries, we find that the marginal impact of informality on innovation by formal firms decreases with the intensity of competitive pressure from informal firms, consistent with an inverted-U relationship between propensity to innovate and competitive pressure from firms in the informal sector.
    Date: 2015–11–20
  5. By: Chen, Shin-Horng; Wen, Pei-Chang
    Abstract: This paper sets out to examine a key issue: how a latecomer, like Taiwan may develop its industry in a post catch-up manner. We make intensive inquiries into this issue via case studies on two sectors in Taiwan, namely the bicycle industry and the electric vehicle industry. One challenge to post catch-up is related to the situation where innovation model and path are at the fluid phase and where scarce opportunity for imitation is present. This has led us to giving special account to fuzzy front-end at the industrial level and how market cultivation and innovative business models come to play an important role in shaping the innovation path for post catch-up. For a couple of leading players in Taiwan’s bicycle industry, a key issue they faced was how to transform themselves and local setting in Taiwan to become a leader in high-end bicycles, in an attempt to fend off escalated international competition. In the emerging EV industry, the Taiwanese players try to overcome its structural weaknesses in the mainstream automotive industry to explore the possibility of levelling the playing field with the forerunners in the advanced countries. Our case studies suggest that technological catch-up is not necessarily a prelude to post catch-up, depending on the nature of new innovation trajectory and entry modes of the emerging industry. While the way in which a latecomer’s industry to rise in a post-catch-up manner has something to do with path dependence, something can be done to overcome the path dependence. Our analyses also lend support to the importance of product servicizing as a means of post catch-up, especially from the perspective of market cultivation. On balance, for post catch-up at an industrial level, a latecomer’s innovation system and its boundaries have to be shaped in line with the country’s level of technological accumulation, constituent firm’s strategy, the complexity of the innovation at issue, and the way in which the focal industry is emerging.
    Keywords: Post catch-up, technological catch-up, product servicizing, market cultivation, business model, Post catch-up, technological catch-up, product servicizing, market cultivation, business model
    Date: 2016–08
  6. By: Attar, M. Aykut
    Abstract: This paper studies a second-generation Schumpeterian model to understand the nature of technological progress and economic growth in Turkey. It identifies some structural parameters numerically and tests whether certain Schumpeterian mechanisms work. Results show that, while horizontal (product) innovation works as determined in theory, vertical (process) innovation does not operate in the long run. Since the paper directly estimates the structural forms originating from the general equilibrium of the model economy, results do not carry any endogeneity bias. The paper also explains, in a quite transparent way, why the Turkish economy did not converge to frontier economies. The most appropriate policy under resource constraints is to strengthen the incumbent firms and support their growth, and the formation of new enterprises is not a policy priority.
    Keywords: R & D, entry, process innovation, product innovation, productivity, policy.
    JEL: O32 O41 O50
    Date: 2016–08
  7. By: Chatterjee, Tonmoy; Gupta, Kausik
    Abstract: This paper deals with the aspect of trade in health services in the form of health care quality innovation from North to South in the presence of well established state interference in South. In accordance to the above mentioned scenario we have framed a theoretical structure where our health care is acting as a monopoly and the government has detected income transfer from richer people of South to the poorer section of South as an action to heal the welfare of the society. From such kind of set up we have discussed several possibilities through which a South based Multinational Health Service Provider (MNHSP) can export their health care quality innovation to the patients of North. Overall, we find price discrimination of the MNHSP between the Southern branches of MNHSP and the Northern branches of MNHSP with some standardisation is the main source of trade in health care innovation at least in our case.
    Keywords: Health quality innovation, International trade, Full information dynamic game and Income transfer
    JEL: C7 D4 F12 F23 I11
    Date: 2016–04–19
  8. By: Edquist, Charles (CIRCLE, Lund University)
    Abstract: The Swedish National Innovation Council (NIC) was created by the Prime Minister (Stefan Löfven) in February 2015, and it has now been operating for 18 months. It is personally chaired by the Prime Minister, which is unusual for such councils in other countries. Another atypical characteristic of the Swedish NIC is its dominant and wide focus on innovation rather than on research (for which there is another council in Sweden). The existence of NIC has given innovation policy issues a much higher status and degree of importance both within the government itself and within government agencies, i.e. in the entire state apparatus. NIC has become a major governance instrument in order to transform Swedish innovation policy from being linear towards becoming holistic. The continued separation between innovation policy and research policy is also very important if the linear view shall lose its dominance in the field of innovation policy. The Swedish NIC will be described and analyzed in this paper and its operation will be exemplified by four types of NIC activity. I will show that two of these activities have already been directly successful in influencing innovation policy in practice (state risk capital provision and innovation-related public procurement) and that an interesting development has been taking place in the other two (holistic innovation policy and additionality). These examples will be placed within a framework of the relevant innovation theory and of the development of innovation policy in a larger context.
    Keywords: Innovation; Innovation Policy; Holistic innovation policy; Research policy; Linear view; Systems of innovation
    JEL: O30 O38 O49 O52
    Date: 2016–08–23
  9. By: Gabor Bekes (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Cecilia Hornok (Kiel Institute for the World Economy); Balázs Muraközy (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: We use a unique cross-section survey of manufacturing firms from four European countries (France, Germany, Italy, Spain) linked with balance sheet data to study the relationship between key aspects of globalization and firm-level markups. The main results are: (i) Exporting is positively correlated with markups; (ii) Importing intermediate inputs and outsourcing are also positively correlated with markups; (iii) Firms with affiliates have higher markups than other firms, while simply membership in a group or being foreign-owned seem to be less important; (iv) Perceived competition from low-cost markets is negatively correlated with markups; (v) Higher quality production and innovation, especially if it results in IP, has a strong positive relationship with markups; (vi) While these variables are correlated, they are significant in a joint model including all four groups, and `fully globalized' firms tend to charge around 100% higher markups than non-globalized firms.
    Keywords: markups, exporting, importing, FDI, innovation
    JEL: D22 D24 F14 L11 L60
    Date: 2016–06
  10. By: Benner, Maximilian; Bieringer, Lukas; Knaupp, Matthias; Wittemaier, Jana; Wruck, Adrian
    Abstract: The notion of smart specialization has gained considerable prominence in the international discourse on regional development. The idea of directing the attention of regional policy towards strengths and opportunities in a region’s knowledge base, and of developing regional economic and innovation strategies in a participatory public-private entrepreneurial process of discovery has unfolded policy relevance especially in countries of the European Union and its neighborhood. Nevertheless, the concept of smart specialization can be applied to regional economies in other countries, too. The present study does so for the city of Haifa, Israel. It provides a profile of the Haifa regional economy, examines regional policies in the framework of the Israeli economic and political context, and identifies possibilities for regional policy to focus on in the coming years. Drawing on the idea of an entrepreneurial process of discovery on the regional level which is a critical component of the smart specialization concept, the study suggests how such an entrepreneurial process of discovery could be organized in the case of Haifa. Conclusions drawn from this study can inform the elaboration of smart specialization strategies in other regions, too.
    Keywords: smart specialization; smart specialisation; clusters; regional development; regional policy; Haifa; Israel
    JEL: O18 R11 R12 R58
    Date: 2016–08–24
  11. By: McGuire, Gregory
    Abstract: The objective of this study is to research barriers to the identification and implementation of mechanisms for enhancing energy efficiency and investment in renewable energy in the Caribbean. Specifically the study aims to provide an assessment of the region’s status with respect to energy efficiency and renewable energy and to identify mechanisms for the enhancement of energy initiatives.
    Date: 2016–05

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