nep-ino New Economics Papers
on Innovation
Issue of 2019‒07‒15
thirteen papers chosen by
Uwe Cantner
University of Jena

  1. Antitrust and Innovation: Welcoming and Protecting Disruption By Giulio Federico; Fiona Scott Morton; Carl Shapiro
  2. The Fountain of Knowledge: An Epistemological Perspective on the Growth of U.S. SBIR-Funded Firms By Audretsch, David; Link, Albert
  4. Buyers' Role in Innovation Procurement By De Rassenfosse, Gaétan; Decarolis, Francesco; Iossa, Elisabetta; Leonardo Giuffrida, Leonardo; Mollisi, Vincenzo; Raiteri, Emilio; Spagnolo, Giancarlo
  5. Integration and Competition for Innovations in Science-Based Industries By Tapas Kundu; Seongwuk Moon
  6. Does combining different types of collaboration always benefit firms? Collaboration, complementarity and product innovation in Norway By Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  7. Scientific Education and Innovation: From Technical Diplomas to University STEM Degrees By Nicola Bianchi; Michela Giorcelli
  8. A Theory of Gazelle Growth: Competition, Venture Capital Finance and Policy By Persson, Lars; Kaya, Mehmet Caglar
  9. Cohesion policy incentives for collaborative industrial research: the evaluation of a smart specialisation forerunner programme By Crescenzi, Riccardo; de Blasio, Guido; Giua, Mara
  10. The Impact of Intellectual Property Rights on Labor Productivity: Do Constitutions Matter? By Emanuela Carbonara; Giuseppina Gianfreda; Enrico Santarelli; Giovanna Vallanti
  11. Place-Based Innovation Ecosystems: Volvo companies in Gothenburg (Sweden) By Jens Sorvik; Anna Zingmark; Matilda Ardenfors
  12. Local Rates of New Firm Formation: An Empirical Exploration using Swedish Data By Andersson, Martin; Lavesson, Niclas; Partridge, Mark D.
  13. The Impact of Technological Innovation on the Future of Work By Maarten Goos; Melanie Arntz; Ulrich Zierahn; Terry Gregory; Stephanie Carretero Gomez; Ignacio Gonzalez Vazquez; Koen Jonkers

  1. By: Giulio Federico; Fiona Scott Morton; Carl Shapiro
    Abstract: The goal of antitrust policy is to protect and promote a vigorous competitive process. Effective rivalry spurs firms to introduce new and innovative products, as they seek to capture profitable sales from their competitors and to protect their existing sales from future challengers. In this fundamental way, competition promotes innovation. We apply this basic insight to the antitrust treatment of horizontal mergers and of exclusionary conduct by dominant firms. A merger between rivals internalizes business-stealing effects arising from their parallel innovation efforts and thus tends to depress innovation incentives. Merger-specific synergies, such as the internalization of involuntary spillovers or an increase in the productivity of R&D, may offset the adverse effect of a merger on innovation. We describe the possible effects of a merger on innovation by developing a taxonomy of cases, with reference to recent U.S. and E.U. examples. A dominant firm may engage in exclusionary conduct to eliminate the threat from disruptive firms. This suppresses innovation by foreclosing disruptive rivals and by reducing the pressure to innovative on the incumbent. We apply this broad principle to possible exclusionary strategies by dominant firms.
    JEL: L1 L10 L12 L13 L4 O3
    Date: 2019–06
  2. By: Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The premise of this paper is that a basis for firms receiving Small Business Innovation Research (SBIR) research awards to develop commercializable technologies is not only their proposed creative ideas but also their endowment of attendant knowledge necessary to develop the technology being proposed. Based on this premise, we propose that those firms that have higher growth rates attributable to their SBIR awards are also those firms that are more creative and have more knowledge endowments. Empirically, we quantify a firm's creativity and its sources of research knowledge in terms of its past experiences, and we find that firms with more technical experience and sector experience are those that have realized higher growth rates from their SBIR-funded research.
    Keywords: knowledge; creativity; entrepreneurship; SBIR program; technology;
    JEL: D83 H43 L26 O33 O38
    Date: 2019–07–01
  3. By: Quentin Plantec (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique, Institut National de la Propriété Industrielle (INPI)); Benjamin Cabanes (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoît Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: University-Industry (U-I) collaborative Ph.D. is one particular channel amongst a wide range of methods for firms to access academic knowledge. While often presented as a mean for firms to hire Ph.D. candidates or to address problem-solving issues, U-I collaborative Ph.D. could constitute an interesting proxy to deeper explore U-I collaborations goals and principles. We focus here on (1) what could be the different archetypes of U-I collaborative Ph.D. in terms of R&D strategies and collaboration forms? (2) In what extent firms and universities contribute to new knowledge co-development and unknown exploration through those collaborations? This exploratory study was based on an original date set of 90 collaboration agreements between laboratories and companies through the French "CIFRE" programme. First, we developed a coding scheme to classify each project between three collaboration forms (outsourcing of knowledge development / knowledge transfer & absorptive capacity / knowledge co-development) and three R&D strategies (process or product improvement / new competences enhancement / new innovation area exploration). Second, we computed descriptive statistical analyses to define four main archetypes of U-I collaborative Ph.D. As a result, the archetypes definition provided a more comprehensive vision of the literature on U-I collaborative Ph.D. projects that were appearing fragmented. We also highlighted that there was a high share of projects aiming at co-developing new knowledge for unknown exploration in our limited sample. We finally discussed (1) institutional factors that could favour this orientation and (2) possibilities to extend the scope of the study.
    Keywords: University -Industry ecosystems,R&D strategies,R&D collaborations,University - Industry PhD student,doctoral programmes
    Date: 2019–06–19
  4. By: De Rassenfosse, Gaétan; Decarolis, Francesco; Iossa, Elisabetta; Leonardo Giuffrida, Leonardo; Mollisi, Vincenzo; Raiteri, Emilio; Spagnolo, Giancarlo
    Abstract: What is the impact of buyers on the performance of innovation procurement? In which phase of the procurement process are buyers most crucial and why? We address these questions by exploiting a novel dataset that links U.S. federal R&D contracts to their follow-on patents, citations and claims. Using the deaths of managers in the offices close to where contracts are performed as shocks to the functioning of these offices, we measure a positive and sizable effect of public buyers on all three outcome measures. The buyer's role is stronger in the pre-award, tender-design phase, where cooperation between different specialists is essential, than in the following contract-management phase typically performed by individual officers. Consistently, bureaus where employees perceive high level of cooperation within the office are associated with better R&D outcomes.
    Keywords: Buyers; Innovation; Management Practices; patents; Procurement; R&D Procurement
    JEL: H11 H57 O31 O32 O38
    Date: 2019–06
  5. By: Tapas Kundu (Oslo Business School, Oslo Akershus University College of Applied Sciences, School of Business and Economics, UiT the Arctic University of Norway); Seongwuk Moon (Sogang University Graduate School of Management of Technology)
    Abstract: We develop a model to understand how competition for innovation affects the organization of research activity and property-rights allocation in science-based industries. We consider a vertical production process with a division of labour between research and commercialization. We analyze firms’ incentive for integration in the presence of upstream competition for innovation. Integration adversely affects an integrated firm’s R&D investment and creates positive externality for the independent firms. For a sufficiently strong externality, a semiintegrated structure appears in equilibrium. The model can thus explain the coexistence of integrated and independent research firms and conforms to the evidence of R&D competition in science-based industries. Interestingly, a non-integrated arrangement can sometime appear in equilibrium even though a semi-integrated arrangement has higher innovation probability and aggregate industry payoff. This is because those who gain from integration cannot commit to compensate the losing parties at the contracting stage. We analyze the effects of resource constraints and inter-customer licensing on the industry structure and their implications for the competition for innovation.
    Keywords: R&D contest; Innovation, Vertical integration; Science-based Industry.
    JEL: L22 O31 O32
    Date: 2017–09–21
  6. By: Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006–2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing “more of all” on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products.
    Keywords: innovation; firms; scientific and supply-chain collaboration; interaction; Norway
    JEL: O31 O32 O33
    Date: 2019–07–01
  7. By: Nicola Bianchi; Michela Giorcelli
    Abstract: This paper studies the effects of university STEM education on innovation and labor market outcomes by exploiting a change in enrollment requirements in Italian STEM majors. University-level scientific education had two direct effects on the development of patents by students who had acquired a STEM degree. First, the policy changed the direction of their innovation. Second, it allowed these individuals to reach top positions within firms and be more involved in the innovation process. STEM degrees, however, also changed occupational sorting. Some higher-achieving individuals used STEM degrees to enter jobs that required university-level education, but did not focus on patenting.
    JEL: I21 I25 I28 J24 O30
    Date: 2019–06
  8. By: Persson, Lars (Research Institute of Industrial Economics (IFN)); Kaya, Mehmet Caglar (Department of Economics)
    Abstract: This paper proposes a theory of gazelle growth in which gazelles can either grow organically or by acquisitions. In the model, there are three types of firms: incumbent, target, and gazelle. We show that the lower cost of organic growth can increase the incentives for acquisition growth. The reason for this is that the incumbent understands that if it acquires the target firm, the gazelle will then invest organically anyway to grow, and therefore, the acquisition will not be sufficient to protect the incumbent's market power. The gazelle could then acquire the target firm at a good price. We also show that financial support for the organic growth of gazelles can increase gazelles' growth by acquisitions since incumbents' preemptive motives are reduced.
    Keywords: Gazelles; Acquisitions; Organic growth; Entrepreneurial policy; Venture capital; Financial support
    JEL: G24 G34 G38 L10 L26
    Date: 2019–07–02
  9. By: Crescenzi, Riccardo; de Blasio, Guido; Giua, Mara
    Abstract: This paper evaluates a programme of subsidies for Collaborative Industrial Research (co-)funded by the EU Cohesion Policy in Italy mobilising over 1 billion euros. This programme in the 2007-2013 funding cycle was a precursor to some of the key features of Smart Specialisation Strategy (S3) programmes, offering evidence-based insights on potential challenges to the practical application of the S3 approach. The programme was not successful in boosting investments, value added or employment of beneficiary firms. The collaborative dimension of the projects added limited value and a more generous funding level would not have improved effectiveness. However, positive impacts emerged in low-tech sectors.
    Keywords: Cohesion Policy; Smart Specialisation; Policy Evaluation; Innovation; European Union
    JEL: J1
    Date: 2018–08–23
  10. By: Emanuela Carbonara (Università di Bologna); Giuseppina Gianfreda (Università della Tuscia); Enrico Santarelli (Università di Bologna); Giovanna Vallanti (LUISS "Guido Catli")
    Abstract: Focusing on 22 OECD countries we estimate the impact of constitutional provisions and of lower-rank norms aimed at protecting intellectual property rights (IPR) on labor productivity at industry level. Our analysis allows us to answer the following questions: Are IPR more likely to be enforced if they are envisaged in the constitution rather than provided for in ordinary legislation? And if constitutional protection implies an accrued defense or enforcement of those principles, is this difference relevant enough to translate into a higher impact on firms’ outcome? By using IV techniques and controlling for a full set of year-, industry- and country fixed effects (and their interactions), we show that constitutional provisions protecting IPR positively affect the differential in labor productivity between high and low R&D intensive sectors. This effect is driven by the impact of IPR protection on R&D investment of the highly innovative sectors. Our results hold after controlling for lower-rank norms. Furthermore, the interaction between constitutional norms and lower legislation is negative, suggesting that the two are substitutes: the impact of constitutions is stronger in those countries where IPR protection by lower norms is weaker. On turn, in those countries where IPR are protected by constitutional norms, lower norms do not have a significant effect on the productivity of high R&D intensive sectors.
    Keywords: Constitutions; Intellectual Property Rights; R&D; Labor productivity; OECD countries
    JEL: D24 K10 O47
    Date: 2019
  11. By: Jens Sorvik; Anna Zingmark; Matilda Ardenfors
    Abstract: There is a revival in the automotive sector in West Sweden, whereby several new companies set around the vehicle industry are attracting fresh capital and expertise into the region. An increasingly dynamic entrepreneurial ecosystem is generating new innovation intermediaries who provide added-value functions. The emergence of these innovation intermediaries is being driven by political, market-related, socio-cultural, relational and technological factors. These include societal challenges and trends that drive political interest, such as environmental issues and climate change. There is also a political interest in adapting to globalisation, to secure regional competitiveness and resilience. New technology developments include the electrification of vehicles, automation and connected vehicles. This is driving an interest from industry and academia in attracting talent and securing competences. There is also a tradition and experience of collaboration in the region. Volvo Group (AB Volvo) and Volvo Cars are very interested in continuing to nurture the regional ecosystem, by attracting other companies to the region. Civil society is eventually involved in the innovation ecosystem as user of technology, where user behaviour is analysed as an input to development processes. A common view among respondents is that it should be the needs of the stakeholders to drive the setting-up of innovation support actors or collaborative projects. These initiatives should support not only single companies but also many actors in the system, and be conducive to collaborative activities.
    Keywords: Place-based, innovation ecosystem, Gothenburg, Sweden, Volvo, quadruple helix, smart specialisation, territorial development, new technologies, automatation, connected vehicles
    Date: 2019–06
  12. By: Andersson, Martin (Department of Economics, Blekinge Institute of Technology); Lavesson, Niclas (CIRCLE, Lund University); Partridge, Mark D. (Ohio State University)
    Abstract: We assess the empirical literature on the determinants of spatial variations in new-firm formation rates by undertaking a systematic empirical analysis of the relative roles of different demand- and supply-side factors. Using instrumental variables to address endogeneity, we find that local growth drives local entrepreneurship exclusively in services industries. Average establishment size has a robust negative influence on local new-firm formation rates, but its effect varies across industries. Local industry diversity is only positive for new-firm formation in high-tech and knowledge-intensive activities. There is also some evidence of that longer distances to urban centers is associated with higher new-firm formation rates. The only local factor with a consistent positive effect on new-firm formation across industries is local density of skilled workers. We conclude that industry structure, geography and agglomeration matter, but in the end, new firms are started by people, so it is unsurprising that the main factor driving local entrepreneurship is the characteristics of the local residents.
    Keywords: Entrepreneurship; New firm formation; Geography; Human capital; Agglomeration; Local growth; Startups
    JEL: L26 M13 R11 R30
    Date: 2019–06–27
  13. By: Maarten Goos (Utrecht School of Economics); Melanie Arntz (ZEW and University of Heidelberg); Ulrich Zierahn (ZEW); Terry Gregory (ZEW); Stephanie Carretero Gomez (European Commission - JRC); Ignacio Gonzalez Vazquez (European Commission - JRC); Koen Jonkers (European Commission - JRC)
    Abstract: New digital technologies more and more diffuse into the economy. Due to this digitisation, machines become increasingly able to perform tasks that previously only humans could to. Production processes and organizations are changing, new products, services and business models emerge. These trends have important implications for European labour markets. This working paper presents up-to date evidence on the consequences of technological innovations on labour markets based on the academic literature and discusses the resulting policy challenges along with examples of policy responses. One key finding is that so far recent technological change has had little effect on the aggregate number of jobs but leads to significant restructuring of jobs. This implies three key challenges for European labour markets: first, digitisation induces shifts in skill requirements, and workers’ fate in changing labour markets crucially depends on their ability to keep up with the change. Secondly, digitisation is not a purely technological process, but requires an accompanying process of organisational change. Thirdly, digitisation comes along with rising shares of alternative work arrangements, due to more outsourcing, standardisation, fragmentation, and online platforms. These alternative work arrangements imply both new opportunities and challenges. These challenges require adequate policy responses at the European, national and regional level, which the working paper outlines for education and training policies, active labour market policies, income policies, tax systems and technology policies.
    Keywords: Technical Change, Structural Change, Labour Markets, Europe
    Date: 2019–06

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