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on Innovation |
| By: | Jose Luis Hervas-Oliver; Mario Davide Parrilli; Andres Rodriguez-Pose; Francisca Sempere-Ripoll |
| Abstract: | European Union (EU) innovation policies have for long remained mostly research driven. The fundamental goal has been to achieve a rate of R&D investment of 3% of GDP. Small and medium-sized enterprise (SME) innovation, however, relies on a variety of internal sources —both R&D and non-R&D based— and external drivers, such as collaboration with other firms and research centres, and is profoundly influence by location and context. Given this multiplicity of innovation activities, this study argues that innovation policies fundamentally based on a place-blind increase of R&D investment may not deliver the best outcomes in regions where the capacity of SMEs is to benefit from R&D is limited. We posit that collaboration and regional specificities can play a greater role in determining SME innovation, beyond just R&D activities. Using data from the Regional Innovation Scoreboard (RIS), covering 220 regions across 22 European countries, we find that regions in Europe differ significantly in terms of SME innovation depending on their location. SMEs in more innovative regions benefit to a far greater extent from a combination of internal R&D, external collaboration of all sorts, and non-R&D inputs. SMEs in less innovative regions rely fundamentally on external sources and, particularly, on collaboration with other firms. Greater investment in public R&D does not always lead to improvements in regional SME innovation, regardless of context. Collaboration is a central innovation activity that can complement R&D, showing an even stronger effect on SME innovation than R&D. Hence, a more collaboration-based and place-sensitive policy is required to maximise SME innovation across the variety of European regional contexts. |
| Keywords: | regional innovation; SMEs; R&D; place-based; collaboration; EU regions |
| JEL: | O31 O32 L11 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2122&r= |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Kärnä, Anders (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Institute for Economic and Business History Research) |
| Abstract: | Differentiating various types of entrepreneurs provides clues to the puzzle of why top-down policies often fail to create Schumpeterian entrepreneurship and the ecosystems where it thrives. Schumpeterian entrepreneurship is intrinsically contrarian, whereas public policy has a bias toward incremental innovation and replication of past success. If central planners knew what the next radical innovation would be, there would be no need for Schumpeterian entrepreneurs. Schumpeterian entrepreneurs create not only companies but also institutions in the entrepreneurial support system. These ever-evolving structures are too complex to design, and central planning instead reduces the space for organic institutional innovation. |
| Keywords: | Entrepreneurship policy; High-impact entrepreneurship; Innovation; Institutions; Schumpeterian entrepreneurship |
| JEL: | M13 O31 P14 |
| Date: | 2021–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1395&r= |
| By: | Laurence Jacquet; Stéphane Robin (CY Cergy Paris Université, THEMA) |
| Abstract: | We examine the R&D, innovation and productivity effects of R&D tax credits (R&DTC) in 8 EU countries, in the context of a proposed EU-wide "super deduction" on R&D expenditures. Our econometric analysis, performed on industry-level panel data, shows that past R&D feeds current R&D, whether it is conducted under an R&DTC or not. Our estimate of additionality during an R&DTC phase is generally close to 1. R&D intensity also affects patenting intensity positively in Belgium, Czech Republic, France, Spain and the UK, but this relationship is R&DTC-related only in Belgium, France and Spain. Only in France and the UK do we observe a full (yet fragile) R&D – innovation – productivity relationship. In the UK, this relationship is not affected by the R&DTC scheme. In France, a 1% increase in R&D conducted under the second to fourth phases of R&DTC (1999-2017) entails a cumulated 0.37% increase in patenting intensity, which translates to a 0.16% increase in productivity. The main policy implication of these results is that a "super-deduction" on R&D is likely to help the EU reach its "R&D at 3% of GDP" objective, but only time will tell how generous it must be to really spur innovation and productivity. |
| Keywords: | R&D Tax Credits, Public Support to R&D, Science and Technology Policy, European Policy |
| JEL: | O38 H25 H54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2021-14&r= |
| By: | Jason Deegan; Tom Broekel; Rune Dahl Fitjar |
| Abstract: | This paper examines which economic domains regional policy-makers aim to develop in regional innovation strategies, focusing in particular on the complexity of those economic domains and their relatedness to other economic domains in the region. We build on the economic geography literature that advises policy-makers to target related and complex economic domains (e.g. Balland et al. (2018a), and assess the extent to which regions actually do this. The paper draws on data from the smart specialisation strategies of 128 NUTS-2 regions across Europe. While regions are more likely to select complex economic domains related to their current economic domain portfolio, complexity and relatedness figure independently, rather than in combination, in choosing priorities. We also find that regions in the same country tend to select the same priorities, contrary to the idea of a division of labour across regions that smart specialisation implies. Overall, these findings suggest that smart specialisation may be considerably less place-based in practice than it is in theory. There is a need to develop better tools to inform regions’ priority choices, given the importance of priority selection in smart specialisation strategies and regional innovation policy more broadly. |
| Keywords: | Smart Specialisation, Regional Policy, Complexity, Relatedness, Innovation Policy, European Cohesion Policy |
| JEL: | O25 O38 R11 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2123&r= |
| By: | Foreman-Peck, James (Cardiff Business School); Zhou, Peng (Cardiff Business School) |
| Abstract: | This paper shows that EU and national innovation subsidy policies stimulated Central and East-ern Europe Countries (CEEC) productivity in the years after their entry to the EU. However, the average effectiveness of national funding was higher for the Western control group coun-tries than for the CEEC sample. EU innovation subsidies partly compensated the CEEC for the greater innovation effectiveness and impact of western economies. Although they crowded out innovation projects or funding of local governments at the country level, the subsidies crowded in national and local projects at the firm level. Local/regional state innovation aid to enterprises encouraged no increase in labour productivity in all but one of sample CEEC countries. These impacts are assessed in a sequential structural econometric model estimated using Eurostat’s collection of Community Innovation Surveys covering the years 2006-2014. |
| Keywords: | innovation policy; European Union; R&D; subsidies |
| JEL: | L53 L21 H71 H25 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/15&r= |
| By: | Giovanni Dosi (LEM - Laboratory of Economics and Management - SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]); Andrea Roventini; Emmanuele Russo (SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]) |
| Abstract: | In this paper, we study the effects of industrial policies on international convergence using a multi-country agent-based model which builds upon Dosi et al. (2019b). The model features a group of microfounded economies, with evolving industries, populated by heterogeneous firms that compete in international markets. In each country, technological change is driven by firms' activities of search and innovation, while aggregate demand formation and distribution follows Keynesian dynamics. Interactions among countries take place via trade flows and international technological imitation. We employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders: market-friendly policies;industrial policies targeting the development of firms' capabilities and R&D investments, as well as trade restrictions for infant industry protection; protectionist policies focusing on tariffs only. We find that markets cannot do the magic: in absence of government interventions, laggards will continue to fall behind. On the contrary, industrial policies can successfully drive international convergence among leaders and laggards, while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle-income trap. Finally, in a global trade war, where developed economies impose retaliatory tariffs, both laggards and leaders are worse off and world productivity growth slows down. |
| Keywords: | Endogenous growth,Catching up,Technology-gaps,Industrial policies,Agent-based models |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03242369&r= |