nep-ino New Economics Papers
on Innovation
Issue of 2019‒12‒23
fourteen papers chosen by
Uwe Cantner
University of Jena

  1. Greentech homophily and path dependence in a large patent citation network By Nomaler, Onder; Verspagen, Bart
  2. Public R&D and green knowledge diffusion:\r\nEvidence from patent citation data By Gianluca ORSATTI
  3. The Impacts of Patent and R&D Expenditures on the High-Tech Exports of Newly Industrialised Countries: A Panel Cointegration Analysis By Robert Ackrill; Rahmi Cetin
  4. Recalibrating the Reported Returns to Agricultural R&D: What if We All Heeded Griliches? By Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
  5. Top management team nationality diversity, corporate entrepreneurship, and innovation in multinational firms By C Boone; B Lokshin; H Guenter; Rene Belderbos
  6. Coping with societal challenges: Lessons for innovation policy governance By Jan Fagerberg; Gernot Hutschenreiter
  7. Implementing Smart Specialisation: An analysis of practices across Europe By Caroline Cohen
  8. How fast is this novel technology going to be a hit? Antecedents predicting follow-on inventions By Michele Pezzoni; Reinhilde Veugelers; Fabiana Visentin
  9. The Intellectual Spoils of War? Defense R&D, Productivity and International Spillovers By Enrico Moretti; Claudia Steinwender; John Van Reenen
  10. When does it pay off to participate in markets for technology? By Adrián Kovács
  11. Opening the black box of university-suppliers' co-invention: some field study evidence. By Sofia Patsali
  12. DECLINING BUSINESS DYNAMISM By Gert Bijnens; Joep Konings
  13. Skills and Smart Specialisation: The role of Vocational Education and Training in Smart Specialisation Strategies By Ellen Hazelkorn; John Edwards
  14. Radical, Disruptive, Discontinuous and Breakthrough Innovation: More or the same? By Adrián Kovács; Cristina Marullo; Dennis Verhoeven; Alberto Di Minin; Bart Van Looy

  1. By: Nomaler, Onder (UNU-MERIT); Verspagen, Bart (UNU-MERIT, and SBE, Maastricht University)
    Abstract: We propose a method to identify the main technological trends in a very large (i.e., universal) patent citation network comprising all patented technologies. Our method builds on existing literature that implements a similar procedure, but for much smaller networks, each covering a truncated sub-network comprising only the patents of a selected technology field. The increase of the scale of the network that we analyse allows us to analyse so-called macro fields of technology (distinct technology fields related by a coherent overall goal), such as environmentally friendly technologies (Greentech). Our method extracts a so-called network of main paths (NMP). We analyse the NMP in terms of the distribution of Greentech in this network. For this purpose, we construct a number of theoretical benchmark models of trajectory formation. In these models, the ideas of homophily (Green patents citing Green patents) and path dependency (the impact of upstream Green patents in the network) play a large role. We show that a model taking into account both homophily and path dependence predicts well the number of Green patents on technological trajectories, and the number of clusters of Green patents on technological trajectories.
    Keywords: patent citations, citation networks, main path, technological change, green technology, climate change mitigation
    JEL: Q55 Q54 O31 O33 O34
    Date: 2019–12–17
  2. By: Gianluca ORSATTI
    Abstract: The present paper investigates the relationship between public R&D and the diffusion of green knowledge. To do so, we exploit information contained in green patents filed at the European Patent Office from 1980 to 1984. The diffusion of green knowledge is measured by meaning of patent citations. The level of public R&D is instrumented through the policy reaction to the 1986 Chernobyl nuclear accident – that affected the level of public R&D in the energy generation domain – in a difference in differences setting. Results show that a 10% increase in public R&D increases by around 0.7% the number of citations to green patents. Moreover, increasing public R&D fosters the diffusion of green knowledge across traditional (non-green) domains and increases the average technological distance of inventions citing green patents. This evidence suggests that public R&D is a driver of green knowledge diffusion, accelerates the hybridization of traditional innovation processes and fosters technological diversification.
    Keywords: Public R&D, Green innovation, Knowledge diffusion, Patent citations, Environmental policy, Green R&D
    JEL: O30 O32 O33 O38 Q55
    Date: 2019
  3. By: Robert Ackrill; Rahmi Cetin
    Abstract: In this paper, we have sought to complement the extensive literature analysing firm level data on the links between innovation and exports, with an exploration of whether these variables are related at the country-level, for a group of eight NICs. We have been particularly interested with innovation in and export of high-tech products. At the outset, we identified seven hypotheses for testing. Our findings are that, for our panel of eight NICs over the period 1996-2014, patents and R&D expenditures both exert a significant positive effect on these countries’ exports of high-tech goods.
    Date: 2019–12
  4. By: Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
    Abstract: Zvi Griliches’ seminal analysis of hybrid corn spawned a large literature seeking to quantify and demonstrate the value of agricultural research and development (R&D) investments. The most important metric for quantifying the rate of return to R&D emerging from this literature is the internal rate of return (IRR), even though Griliches was skeptical of its usefulness as a metric in this context. An alternative metric, also reported by Griliches but not as commonly used in the subsequent returns-to-research literature, is the benefit-cost ratio (BCR). We assess how the implications of the returns to agricultural R&D literature may have differed if the BCR had become the standard rather than the IRR. We reveal that the IRR and BCR produce substantially different rankings of agricultural R&D projects; differences that persist even under substantial commodity and geographical aggregations of the BCR and IRR estimates. The median across 2,627 reported IRRs is 37.5 percent per year. Using data gleaned from 492 research evaluation studies, we developed and deployed a methodology to impute 2,126 BCRs (median of 5.4) and modified internal rates of returns, MIRRs (16.4 percent per year) assuming a uniform 10 percent per year discount rate and a 30-year research timeline.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Research Methods/ Statistical Methods
    Date: 2019–12
  5. By: C Boone; B Lokshin; H Guenter; Rene Belderbos
    Abstract: We integrate insights from upper echelon theory and the literature on innovation and multinational corporations (MNCs) to develop a framework explaining when and why nationality diversity in top management teams (TMTs) affects corporate entrepreneurship—as evidenced by diversity in global knowledge sourcing—and through this innovation performance in MNCs. In a panel of 165 manufacturing MNCs based in 20 countries, we confirm that the positive effects of TMT nationality diversity on corporate entrepreneurship and innovation are only unleashed in TMTs with low social stratification and in MNCs located in home countries that are low in national power distance. Our study contributes to opening up the black box of the upper echelon’s strategic role in spurring entrepreneurship and innovation in MNCs embedded in different cultures.
    Date: 2018–10–23
  6. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo & UNU-MERIT); Gernot Hutschenreiter (Organisation for Economic Co-operation and Development (OECD), Directorate for Science, Technology and Innovation)
    Abstract: Grand societal challenges, such as global warming, can only be adequately dealt with through wide-ranging changes in technology, production and consumption, and ways of life, that is, through innovation. Furthermore, change will involve a variety of sectors or parts of the economy and society, and these change processes must be sufficiently consistent in order to achieve the desired results. This poses huge challenges for policy-making. In this paper we focus on implications for the governance of innovation policy, i.e., policies influencing a country’s innovation performance. Based on a systemic understanding of innovation and the factors shaping it, the paper highlights the need for effective coordination of policies influencing innovation and what changes in innovation policy governance this may require. To throw further light on how this may be realised the paper discusses evidence on national innovation policy practice, from Finland, the Netherlands and Sweden, respectively, drawing on the country reviews of innovation policy conducted by the OECD as well as other sources. It is concluded that for innovation policy to tackle societal challenges effectively, clearer goals and stronger and better coordination among the various actors – both public and private – whose actions matter for innovation performance will be required. Based on the experiences of the three countries the paper particularly considers the role that comprehensive and inclusive innovation policy councils, with the prime minister in a central role, may play in such a process.
    Date: 2019–12
  7. By: Caroline Cohen (European Commission - JRC)
    Abstract: This report seeks to examine how the Smart Specialisation approach was put into practice across European regions and Member States. It builds upon 35 implementation cases, outlining three main types of challenges that policy-makers are seeking to address through the implementation of their Smart Specialisation Strategies: 1) the involvement of stakeholders in a continuous dialogue to drive the territorial innovation process; 2) the development of efficient innovation policy instruments to support the structural transformation of the economy at regional and/or national level; 3) the pursuit of the internationalisation of the regional/national economy as well as the positioning in European value chains. For each key challenges identified, the report sheds light on the success-conducive factors and tools that have been used by policy-makers to manage the Smart Specialisation policy process, as well as the recurring types of outcomes that were achieved thanks to the implementation of Smart Specialisation related policies. The study lays out a broad range of research and innovation support systems that have been developed and that have driven a) a wider implication of stakeholders in innovation projects; b) the articulation and better functioning of innovation ecosystem; c) the reinforcement of transnational cooperation in S3 priority domains, although joint investment is still a weak point at this stage.
    Keywords: Smart Specialisation, Territorial Development, Innovation Policies, Stakeholders involvement
    Date: 2019–12
  8. By: Michele Pezzoni; Reinhilde Veugelers; Fabiana Visentin
    Abstract: Despite the high interest of scholars in identifying successful inventions, little attention has been devoted to investigate how (fast) the novel ideas embodied in original inventions are re-used in follow-on inventions. We overcome this limitation by empirically mapping and characterizing the trajectory of novel technologies’ re-use in follow-on inventions. Specifically, we consider the factors affecting the time needed for a novel technology to be legitimated as well as to reach its full technological impact. We analyze how these diffusion dynamics are affected by the antecedent characteristics of the novel technology. We characterize novel technologies as those that make new combinations with existing technological components and trace these new combinations in follow-on inventions. We find that novel technologies combining for the first time technological components which are similar and which are familiar to the inventors’ community require a short time to be legitimated but show a low technological impact. In contrast, combining for the first time technological components with a science-based nature generates technologies with a long legitimation time but also high technological impact.
    Keywords: technological novelty, diffusion, combinatorial components, patent data
    Date: 2019–03–08
  9. By: Enrico Moretti; Claudia Steinwender; John Van Reenen
    Abstract: In the US and many other OECD countries, expenditures for defense-related R&D represent a key policy channel through which governments shape innovation, and dwarf all other public subsidies for innovation. We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate models that relate privately funded R&D to lagged government-funded R&D using industry-country level data from OECD countries and firm level data from France. To deal with the potentially endogenous allocation of government R&D funds we use changes in predicted defense R&D as an instrumental variable. In both datasets, we uncover evidence of “crowding in” rather than “crowding out,” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. A 10% increase in government-financed R&D generates 4.3% additional privately funded R&D. An analysis of wages and employment suggests that the increase in private R&D expenditure reflects actual increases in R&D employment, not just higher labor costs. Our estimates imply that some of the existing cross-country differences in private R&D investment are due to cross-country differences in defense R&D expenditures. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in significant productivity gains.
    JEL: O30
    Date: 2019
  10. By: Adrián Kovács
    Abstract: This paper examines the contribution of different technology acquisition strategies to the market value of firms. I exploit a large consolidated dataset on publicly listed US-firms to distinguish between the contributions of patented inventions that these firms acquired via acquisitions of other firms – embodied technology acquisition – and via the outright purchase of standalone technology – disembodied technology acquisition. I develop hypotheses relating firms ability to benefit from both strategies to the size of their internal knowledge stock and their degree of familiarity with the acquired technology. In line with my predictions, I find a positive contribution of embodied technology acquisition on market value, which increases with the size of firms’ internal knowledge stock as well as their familiarity with the acquired technology. Contrary to my predictions, I find a negative contribution of disembodied technology acquisition, except for firms having the largest internal knowledge stocks in my sample. Interestingly, my results reveal that firms are most likely to benefit from the acquisition of familiar technology via the embodied mode whilst at the same time indicating that the negative association between market value and the acquisition of standalone technology is most pronounced when this technology is novel to the acquiring firm. Overall, my findings suggest that the benefits associated with acquiring technology from external sources are only realized when firms possess a minimum degree of absorptive capacity, with the minimum needed to benefit from technology acquisition being significantly higher for technology acquired via the disembodied mode.
    Keywords: Markets for Technology, Patent Assignments, Mergers and Acquisitions, Market Value
    Date: 2019–06–17
  11. By: Sofia Patsali
    Abstract: While there is extensive evidence that the flow of knowledge between academia and industry is important, scholars have noticed that little is known about the actual transmission mechanisms of these influences (Rosenberg and Nelson, 1994; Kenney and Patton, 2009). The paucity of research reflects the fact that university-industry exchanges are a complex process that involves many factors that are difficult to grasp. Furthermore, the practical benefits of most university research for companies stem from interactions and processes that are very much roundabout and indirect (Pavitt, 2005). For instance, a case in point of such processes consists of the technology-intensive interactions between academics and their suppliers of equipment (Perkmann and Walsh, 2007). This paper explores the emergence of dynamic complementarities among researchers’ demand and suppliers’ competencies and aims to identify the dynamic processes through which university labs serve as learning-environment for suppliers. We conducted field-study based on a set of instrumental devices developed in close collaboration between University of Strasbourg laboratories on the one hand, and equipment manufacturers on the other hand. Our case studies illustrate a multitude of patterns through which researchers share their technological knowledge with industrial suppliers. More precisely, our evidence shows the presence of a “procurement-led” innovation phenomenon wherein university researchers provide companies with unique insights by acting both as equipment-demanders as well as suppliers of scientific knowledge about instruments, ultimately allow firms to explore new innovative trajectories.
    Keywords: University-industry interactions; scientific instrumentation; technology co-development; public procurement.
    JEL: D22 D83 H57 O33
    Date: 2019
  12. By: Gert Bijnens; Joep Konings
    Abstract: We build on Decker et al. (2016) who show that business dynamism and entrepreneurship in the U.S. have declined over recent decades and that the characteristics of this decline changed around 2000. Since 2000 the U.S. decline in dynamism has been accompanied by a decline in high-growth, young firms. Using 30 years of data from all for-profit firms incorporated in Belgium, we now offer evidence that Belgium, a far more rigid economy than the U.S., experienced a similar decline in dynamism. Furthermore, the decline set in around 2000 as well. We attribute this not only to the declining share of young firms that become high-growth firms, but more importantly also to the declining propensity for small (not necessarily young) firms to experience fast growth. We do not yet know what caused this decline. Since there are remarkable similarities between Belgium and the U.S. with respect to the secular decline in business dynamism, global trends rather than country specific changes are most likely to be at the basis of this evolution. A possible global trend causing dynamism to decline, is the ICT revolution that started the second half of the ’90s. We find preliminary indications that industries with higher ICT intensity have experienced a dynamism trend change during that same period and show a steeper dynamism decline.
    Date: 2018–01
  13. By: Ellen Hazelkorn; John Edwards (European Commission - JRC)
    Abstract: The Smart Specialisation approach has been part of EU regional innovation policy since 2010 and yet the role of skills and vocational education and training in implementing Smart Specialisation Strategies has only recently attracted attention. Despite being raised in earlier policy documents, it was the 2017 Communication on Strengthening Innovation in Europe's Regions, drawing on experience of implementing smart specialisation in practice, which illustrated its significance for regional innovation policy. In the proposals for Cohesion Policy post 2020, education and skills for innovation are important priorities. Therefore, this technical report is timely since it explores trends in Vocational Education and Training (VET), looks at where it has contributed to Smart Specialisation in specific cases, and highlights elements to consider in regional strategies.
    Keywords: Vocational Excellence, Smart Specialisation, Local and Regional Development
    Date: 2019–12
  14. By: Adrián Kovács; Cristina Marullo; Dennis Verhoeven; Alberto Di Minin; Bart Van Looy
    Abstract: The scholarship on innovation has stressed the importance of distinguishing ‘exceptional’ innovation from ‘run-of-the-mill’ innovation in both conceptual and empirical terms. Over recent decades, various labels have been coined to denote the exceptional nature of innovation. At the same time, research on this topic has been critiqued for its ambiguity in accurately defining and delineating the phenomena under study and, consequently, putting in jeopardy the development of a cumulative body of understanding. We revisit this concern by systematically reviewing three decades of research advanced under the labels of radical, disruptive, breakthrough and discontinuous innovation. We combine two bibliometric techniques – bibliographic coupling and co-citation analysis – to (i) explore the theoretical foundations of these labels and (ii) delineate the thematic orientation of the scholarship pursued under these labels. Our results reveal a dense and growing network of publications that build, in large measure, on the same scientific foundations. In terms of thematic orientation, five overlapping clusters are present, with specific labels scattered across the thematic landscape. These findings suggest that the different labels do not denote clearly distinct bodies of academic scholarship. A subsequent content analysis of the definitions advanced in the most cited papers reveals two discrete underlying dimensions: novelty and impact. Yet, none of the labels characterize innovations across these two dimensions with any consistency. Although this ‘lack of rigor’ would seem to yield no detrimental effects in terms of growth (of scholarship), we argue that conflating novelty and impact can result in ambiguous results. We conclude, therefore, that consistency in the use (and operationalization) of both dimensions would benefit our (cumulative) understanding of the (complex) phenomena involved.
    Keywords: radical innovation, disruptive innovation, discontinuous innovation, breakthrough innovation, bibliometric analysis
    Date: 2019–04–24

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