nep-ino New Economics Papers
on Innovation
Issue of 2017‒12‒18
fifteen papers chosen by
Uwe Cantner
University of Jena

  1. Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes By Smith, Stephen; Lence, Sergio H; Hayes, Dermot J.; Alston, Julian; Corona, Eloy
  2. Is the Fuel Cell Vehicle’s Technological Innovation System built at a global or national scale? An analysis of carmakers\' co-patents’ portfolios By Vincent FRIGANT; Stéphane MIOLLAN; Maëlise PRESSE; David VIRAPIN
  4. The impact of multinational R&D spending firms on job polarization and mobility By Jacob Rubak Holm; Bram Timmermans; Christian Richter Ostergaard
  5. Does manufacturing stir up innovation? By Alex Coad; Antonio Vezzani
  6. Openness, ICT and Entrepreneurship in Sub-Saharan Africa By Asongu, Simplice; Nwachukwu, Jacinta
  7. Potential Impact of Financial Innovation on Financial Services and Monetary Policy By Marek Dabrowski
  8. Innovation Trends and Industrial Renewal in Finland and Sweden 1970-2013 By Kander, Astrid; Taalbi, Josef; Oksanen, Juha; Sjöö, Karolin; Rilla, Nina
  9. The potential and impact of ICT-enabled Social Innovation to promote social investment in the EU By Gianluca Misuraca; Giulio Pasi; Maria Cesira Urzi Brancati
  10. i-FRAME – Assessing impacts of social policy innovation in the EU: Proposed methodological framework to evaluate socio-economic returns on investment of social policy innovations By Gianluca Misuraca; Luigi Geppert; Cristiano Codagnone
  11. Smart Specialisation at work: The entrepreneurial discovery as a continuous process By Elisabetta Marinelli; Inmaculada Perianez Forte
  12. Moving up the global value chain in Latvia By Naomitsu Yashiro; Koen De Backer; Andrés Fuentes Hutfilter; Marco Kools; Zuzana Smidova
  13. An ecosystem in the air? The instance of start-ups and the arrival of the LGV SEA in Bordeaux By Nathalie Gaussier; Claude Lacour
  14. Modeling the formation of R&D alliances: An agentbased model with empirical validation By Tomasello, Mario Vincenzo; Burkholz, Rebekka; Schweitzer, Frank
  15. Entry barriers and their macroeconomic impact in the EU: an assessment using QUEST III By Cristiana Benedetti-Fasil; Miguel Sanchez-Martinez; Peder Christensen

  1. By: Smith, Stephen; Lence, Sergio H; Hayes, Dermot J.; Alston, Julian; Corona, Eloy
    Abstract: Public and private investments in plant breeding have a proven track record of increasing agricultural productivity, significantly contributing to economic well-being or social welfare. Substantial investments in research and development are required before a new plant variety can be developed and released, which the private sector can only recoup through commercial sales coupled with property rights. We previously published outcomes from economic modeling implementing different categories and hypothetical variants of intellectual property protection (IPP) in the field of plant breeding and biotechnology. Our goal here is to portray these outcomes using examples that will be more immediately familiar to the plant-breeding and policy-making communities. In so doing, we do not add to the analyses and arguments already presented. Our objective here is to make more accessible to a broader audience subject matter already presented in a more formal economic format by Lence et al. (2015). We found that plant variety protection (PVP) and utility patents played important and complementary roles in promoting and adopting innovation. Voluntary licensing under patents had a major contribution to social welfare. Periods of protection longer than the current life span of a utility patent did not contribute maximally to the stock of social welfare. We performed a reality check comparing different types of innovation and assessment of time and risk to commercialization. We hope that this information can contribute to more effective implementation of IPP to further promote genetic gain and thus enable commercially funded plant breeders to maximally contribute to the benefit of society on a global basis.
    Date: 2016–04–15
  2. By: Vincent FRIGANT; Stéphane MIOLLAN; Maëlise PRESSE; David VIRAPIN
    Abstract: This paper wishes to contribute to the Technological Innovation System (TIS) literature. More precisely, we study the geographic delineation issue of a focal TIS. In a first part, we discuss the geographic delineation debate in TIS framework, and we explain why co-patents are a good tool for mapping a TIS. Then considering the Fuel Cell Vehicle (FCV) as a focal TIS, we analyse 10 carmakers’ co-patent networks in FCV technologies between 2000 and 2013. Our database includes 3,250 co-patents. First, we build the networks corresponding to the three periods 2000-2004, 2000-2009, and 2000-2013. Second, we measure the nationalization index of their networks. Third, we study with whom they have established formal collaborations. The results show: 1) the internationalization increased slowly during the time span. We observe an extension of the network until 2009 and then, a consolidation trend; 2) the nationalization index is rather strong for 5 carmakers, and very weak for 3 others; 3) carmakers call upon different kinds of partners, located, moreover, in different places. The final section learns the lessons from the empirical study.
    Keywords: Technological Innovation System, TIS, Fuel Cell Vehicle, Geography of innovation, Co-patent, Automobile.
    JEL: O31 O33 L62
    Date: 2017
  3. By: Baum, Christopher F (Department of Economics, Boston College, Chestnut Hill, MA and Department of Macroe- conomics, DIW Berlin); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper studies firms' capability to recombine internal and local knowledge. It measures the outcome in terms of total productivity growth.Using Swedish data on commuting time for face-to-face contacts across all 290 municipalities, we employ a time sensitive approach for calculating localized knowledge within a municipality and and its close neighbors. Internal knowledge is captured by register data on firms' innovation intensity. The two sources of knowledge are modeled in a production function setting by discrete composite variables with different combinations of input factors. Applying the model on Swedish firm level panel data, we find strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the level of R&D investment.
    Keywords: Innovation strategies; localized knowledge; patents; TFP growth; panel data
    JEL: C23 O31 O32
    Date: 2017–12–12
  4. By: Jacob Rubak Holm (Aalborg University); Bram Timmermans (Aalborg University); Christian Richter Ostergaard (Aalborg University)
    Abstract: This report analyses the role of multinational R&D intensive firms in job polarization. It also investigates how these firms affect the labour market in terms of wage growth and labour mobility. Firms appearing on the EU Industrial R&D Investment Scoreboard account for a significant share of economic activity in Denmark measured by employment, innovation activity, and R&D expenditures. Domestic firms listed on the scoreboard are the largest and most innovative, but subsidiaries of foreign scoreboard firms are still larger and more innovative compared to non-scoreboard firms. Relying on information from register data the report demonstrates that R&D spending among scoreboard firms is a complement to high skill jobs, while it substitutes low skill jobs. Thus, scoreboard firms are more involved in upgrading than polarization. Organisational change has an effect similar to that of R&D, while there is indication that innovation is a complement for low skilled jobs. Labour flows, particularly of high skilled workers, are stronger among scoreboard firms than between scoreboard firms and other firms. Thus, labour flows in networks instead of appearing in labour market pools, and non-scoreboard firms are kept out of the "knowledge spill-over" loops, providing them with fewer opportunities to learn from the scoreboard firms.
    Keywords: MNC, R&D, employment, skill, job polarization
    Date: 2017–11
  5. By: Alex Coad (CENTRUM Católica Graduate Business School, Pontificia Universidad Católica del Perú, Lima, Perú); Antonio Vezzani (European Commission - JRC)
    Abstract: Because of its positive contribution to employment and economic growth, the EU has set a manufacturing target of 20%. This could also boost R&D, productivity and exporting. Our analyses do not find empirical evidence that a large manufacturing sector has a direct influence on exporting activity or productivity growth. We find a positive association between manufacturing and R&D investment. The EU manufacturing strategy could help reaching the 3% R&D intensity target. However, the link between manufacturing and R&D depends on the industrial structure of a country. Support to new high-tech sectors should be coupled with actions to encourage technological upgrade in existing ones.
    Keywords: Manufacturing, R&D, exporting, productivity, industrial policy, industrial renaissance
    Date: 2017–11
  6. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: This study has examined how information and communication technology (ICT) influences openness to improve the conditions of doing business in sub-Saharan Africa. The data is for the period 2000-2012. ICT is proxied with Internet and mobile phone penetration rates whereas openness is measured in terms of financial and trade globalisation. Ten indicators of doing business are used, namely: (i) cost of business start-up procedures; (ii) procedure to enforce a contract; (iii) start-up procedures to register a business; (iv) time required to build a warehouse; (v) time required to enforce a contract; (vi) time required to register a property; (vii) time required to start a business; (viii) time to export; (ix) time to prepare and pay taxes and (x) time to resolve an insolvency. The empirical evidence is based on Generalised Method of Moments with forward orthogonal deviations. While we find substantial evidence that ICT complements openness to improve conditions for entrepreneurship, the effects are contingent on the dynamics of openness, ICT and entrepreneurship. Theoretical and practical policy implications are discussed. The inquiry is based on two contemporary development concerns: the need for policy to leverage on the ICT penetration potential in the sub-region and the relevance of entrepreneurship in addressing associated issues of population growth such as unemployment.
    Keywords: Openness; ICT; Entrepreneurship; Africa
    JEL: F40 O38 O40 O55 P37
    Date: 2017–01
  7. By: Marek Dabrowski
    Abstract: The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission. The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
    Keywords: monetary policy, financial innovation, electronic money
    JEL: E41 E44 E51 E52 E58 G21
    Date: 2017–07
  8. By: Kander, Astrid (Department of Economic History, Lund University); Taalbi, Josef (Department of Economic History, Lund University); Oksanen, Juha; Sjöö, Karolin; Rilla, Nina
    Abstract: We examine trends in innovation output for two highly ranked innovative countries: Finland and Sweden (1970-2013). Our novel dataset, collected using the LBIO (literature-based innovation output) method, suggests that the innovation trends are positive for both countries, despite an extended downturn in the 1980s. The findings cast some doubt on the proposition that the current stagnation of many developed countries is due to a lack of innovation and investment opportunities. Our data show that Finland catches up to, and passes, Sweden in innovation output in the 1990s. In per capita terms, Finland stays ahead throughout the period. We find that the strong Finnish performance is largely driven by innovation increase in just a handfull of industries. Both countries saw a rise in innovation during the dot-com era and the structural changes that followed. Since 2000 however, Sweden has outperformed Finland in terms of total innovations, especially in machinery and ICT, while the Finnish rate of innovation has stabilized. We suggest that these patterns may be explained by different paths of industrial renewal.
    Keywords: innovation; literature-based innovation output; industrial renewal; structural decomposition; structural change
    JEL: N14 O30 O47
    Date: 2017–12–06
  9. By: Gianluca Misuraca (European Commission - JRC); Giulio Pasi (European Commission - JRC); Maria Cesira Urzi Brancati (European Commission - JRC)
    Abstract: This report presents the results of the JRC-led research on ‘ICT-enabled Social Innovation to support the implementation of the Social Investment Package’ (IESI) conducted in partnership with the Directorate General for Employment, Social Affairs and Inclusion. The IESI research is set out to help policymakers and practitioners use ICT-enabled social innovation to modernise welfare systems, provide better and more efficient social services, and ultimately increase the wellbeing and quality of life of citizens. The original research design, its theoretical framework and empirical findings contribute to the growing scientific interest on ICT-enabled social innovation in the field of social policy reforms, within the scope of the implementation of the social investment approach. Based on the analysis of evidence gathered through a documented collection of initiatives across the EU, the research also advances a proposal for developing a methodological framework to assess the social and economic impact of ICT enabled social innovation. The approach proposed is expected to support policymakers and relevant stakeholders in designing, monitoring and evaluating ICT-enabled social innovation initiatives, which could be transferred, scaled-up and replicated across Europe. Insights from the research contribute to the policy debate on the implementation of the European Pillar of Social Rights and the future of the Welfare State in the EU.
    Keywords: ICT-enabled social innovation, social investment, social policy innovation
    JEL: O38 O52
    Date: 2017–11
  10. By: Gianluca Misuraca (European Commission – JRC); Luigi Geppert; Cristiano Codagnone
    Abstract: This report presents the final proposal for developing a methodological framework to assess the impacts generated by social policy innovations which promote social investment in the EU, in short i-FRAME. This framework has the objective to provide a structured approach that shall serve as a comprehensive framework for conducting analysis of the economic and social returns on investments of social policy innovations. It also aims to act as a guide to gather insights into replicability and transferability of initiatives which promote social investment across the EU. The report outlines the reviewed and improved theoretical and methodological approach developed by the JRC with help from external experts, and validated by testing the operational components proposed on a number of case studies and scenarios of use. After outlining the conceptual and methodological approach underpinning the i-FRAME (V1.0), the report discusses the proposal for building its operational components according to a structured theoretical framework of a dynamic simulation model for social impact assessment (V1.5). The final proposal for i-FRAME (V2.0) and an overview of the operational components for its implementation are then presented discussing the key elements that should be developed to build a comprehensive i-FRAME Web-Platform and simulator for social impact assessment. Conclusions are then offered in terms of implications for policy and directions for future research. These were drawn after consulting experts from different research disciplines, practitioners and representatives of relevant stakeholders and policymakers, and they include .recommendations for further developing the operational components proposed, paving the way towards building the i-FRAME (V3.0) and beyond.
    Keywords: Social policy, innovation, ICT, social investment, social policy innovation, SIP, Social Investment Package, social economy, social enterprise, ICT enabled social innovation, ICT, services, social protection, welfare, mapping, welfare reforms, wellbeing, resilience
    JEL: I31 I38 O33
    Date: 2017–11
  11. By: Elisabetta Marinelli (European Commission - JRC); Inmaculada Perianez Forte (European Commission - JRC)
    Abstract: The term Entrepreneurial Discovery Process (or EDP) originally referred to the identification of areas for investment in research and innovation (i.e. priority-areas), through an inclusive and evidence-based process grounded in stakeholders’ engagement. The experience of the S3 Platform has highlighted, on the one hand, that the concept itself has evolved from being a process limited to the identification of investment-priorities in the design-phase of a Smart Specialisation Strategy, into a continuous activity, which keeps going throughout the strategy’s implementation; on the other, that there was a significant gap in understanding how different actors engaged in the EDP. Such continuous EDP implies that stakeholders are kept engaged in the refinement of priority-areas, the identification of instruments that would implement them, as well as the RIS3 governance and monitoring mechanisms that would allow the expected competitive advantages to emerge. With this report, we address both issues. Firstly, we submit the concept of continuous EDP to an empirical test. Secondly, we look in depth at the role of different stakeholders in the EDP (especially in the design phase of RIS3). To do so, we present the results of a survey run in the S3 Platform, aimed at monitoring current practices in the EDP. The survey provides information on how the 4-ple helix has taken part in the EDP and provides insights on the relationship between the different actors and the public body responsible for the EDP. The results confirm that once investment priorities have been identified with the involvement of stakeholders, various mechanisms that keep them engaged in following the development of such priorities are often put in place. Finally, the results indicate that the EDP, as a continuous process, is proving positive and satisfactory.
    Keywords: RIS3, S3, Smart Specialisation, Entrepreneurial Discovery Process, EDP, Stakeholders’ engagement, 4-ple Helix, Triple Helix
    Date: 2017–11
  12. By: Naomitsu Yashiro; Koen De Backer; Andrés Fuentes Hutfilter; Marco Kools; Zuzana Smidova
    Abstract: Stronger integration in global value chains would speed up economic convergence to advanced OECD economies and raise living standards. Participation in global value chains (GVCs) offers opportunities for boosting productivity through knowledge transfer and intensive use of technologically advanced inputs. It also enables Latvia to diversify exports into high value added goods and services. Latvia’s participation in GVC lags behind its Baltic and Central European peers. It also draws less value added from GVCs compared to many OECD economies. Nevertheless, GVC participation boosts the productivity of Latvian firms and enables them to increase employment and wages. Strong skills, high innovation capabilities and efficient resource allocation are essential for Latvian firms to engage in more knowledge intensive activities within GVCs. Improving access to higher education, promoting innovation cooperation between Latvian firms and foreign research institutes, reducing the large informal economy and establishing an effective judiciary and insolvency regime would unlock productivity growth through stronger integration in GVCs. This Working Paper relates to the 2017 OECD Economic Survey of Latvia. ( y-latvia.htm).
    Keywords: education, global value chains, innovation
    JEL: F12 F43 O38
    Date: 2017–11–27
  13. By: Nathalie Gaussier; Claude Lacour
    Abstract: According to the economic, institutional and political agents, the arrival of the High Speed Line South Europe Atlantic LGV SEA in Bordeaux would trigger or boost a \"Bordeaux regional entrepreneurial ecosystem\". This present paper examines this concept of ecosystem and offers to show its main characteristics, stressing the part played by start-ups, and assessing the economic and spatial logics involved. In a first part, the point is to understand to what extend the start-ups that politicians claim to be the spear-heads of those ecosystems, would constitute new stakes of operating in ecosystems. The survey enables to re-examine the concepts of ecosystem and of entrepreneurial system, to place them into prospect in the frame of regional science and of models of regional development. In a second part, we highlight the characteristic elements of this bordelais ecosystem, using what we call its fundamental DNA: the bordelais entrepreneurial ecosystem is grounded on numerous start-ups whose nature as well as personal and spatial components put into question the emergence of new forms of organization and relationships with the major companies and research laboratories.
    Keywords: Ecosystem, start-up, entrepreneurial system, creative creation
    JEL: L26 M13 P00 R10 R58
    Date: 2017
  14. By: Tomasello, Mario Vincenzo; Burkholz, Rebekka; Schweitzer, Frank
    Abstract: The authors develop an agent-based model to reproduce the size distribution of R&D alliances of firms. Agents are uniformly selected to initiate an alliance and to invite collaboration partners. These decide about acceptance based on an individual threshold that is compared with the utility expected from joining the current alliance. The benefit of alliances results from the fitness of the agents involved. Fitness is obtained from an empirical distribution of agent's activities. The cost of an alliance reflects its coordination effort. Two free parameters ac and a1 scale the costs and the individual threshold. If initiators receive R rejections of invitations, the alliance formation stops and another initiator is selected. The three free parameters (ac; a1; R) are calibrated against a large scale data set of about 15,000 firms engaging in about 15,000 R&D alliances over 26 years. For the validation of the model the authors compare the empirical size distribution with the theoretical one, using confidence bands, to find a very good agreement. As an asset of our agent-based model, they provide an analytical solution that allows to reduce the simulation effort considerably. The analytical solution applies to general forms of the utility of alliances. Hence, the model can be extended to other cases of alliance formation. While no information about the initiators of an alliance is available, the results indicate that mostly firms with high fitness are able to attract newcomers and to establish larger alliances.
    Keywords: R&D network,alliance,collaboration,agent
    JEL: L14
    Date: 2017
  15. By: Cristiana Benedetti-Fasil (European Commission – JRC); Miguel Sanchez-Martinez (European Commission - JRC); Peder Christensen (European Commission - JRC)
    Abstract: Entry barriers make markets less contestable and thereby reduce competition, resulting in lower TFP, GDP and employment growth. Following the Lisbon strategy, Member States increasingly adopted measures to reduce the costs of starting a business. This paper quantifies the macroeconomic impact of such policies and identifies the main structural characteristics still driving the differences across Member States. In general, countries with high entry barriers and a less developed R&D sector seem to benefit proportionally more from a reduction of the so-called red tape barriers. Growth of GDP, TFP and employment could be further enhanced by also improving access to finance. Countries with a more developed R&D sector experience stronger growth in the long run when the reduction of the red tape barriers is accompanied by an improved access to finance.
    Keywords: Entry barriers, innovation, economic growth, macroeconomic modelling
    Date: 2017–11

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