nep-ino New Economics Papers
on Innovation
Issue of 2021‒08‒30
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Innovation Strategy and Economic Development By Matias Braun; Luis Felipe Cespedes; Sebastian Bustos
  2. Technological interdependencies predict innovation dynamics By Pichler, Anton; Lafond, François; Farmer, J. Doyne
  3. Linking the ‘Recovery and Resilience Plan’ and Smart Specialisation. The Portuguese Case By Anabela Santos
  4. Knowledge for a warmer world: a patent analysis of climate change adaptation technologies By Hötte, Kerstin; Jee, Su Jung; Srivastav, Sugandha
  5. Exploration and Exploitation in US Technological Change By Carvalho, Vasco M.; Draca, Mirko; Kuhlen, Nikolas
  6. Financing Entrepreneurship and Innovation in China By Lin William Cong; Charles M. C. Lee; Yuanyu Qu; Tao Shen
  7. Open Innovation Business Models : the example of living labs in France By Ingrid Fasshauer
  8. Specialized Investments and Firms’ Boundaries: Evidence from Textual Analysis of Patents By Jan Bena; Isil Erel; Daisy Wang; Michael S. Weisbach
  9. Comparative Analysis of Five Entrepreneurial Ecosystems in Life Sciences By Alvedalen, Janna; Carlsson, Bo
  10. Scaling up in Entrepreneurial Ecosystems: A comparative study of Entrepreneurial Ecosystems in Life Science By Alvedalen, Janna; Carlsson, Bo
  11. Knowledge Economy Classification in African Countries: A Model-Based Clustering Approach By Amavilah, Voxi Heinrich; Otero, Abraham; Andres, Antonio Rodriguez

  1. By: Matias Braun; Luis Felipe Cespedes; Sebastian Bustos
    Abstract: Productivity differentials have been documented as the main determinant of the variation of income per capita across countries. In this paper, we investigate whether the implementation of innovation-intensive or adoption-intensive business strategies by firms can explain differences in productivity levels and productivity growth across industries and countries. We compute a novel innovation-intensity strategy index for firms, based on textual analysis of financial reports issued in the US by firms from developed and developing countries and from a wide range of industries. We show that the index captures dimensions of the innovation process implemented by firms that go beyond R&D efforts. Our empirical results indicate that firms that pursue an innovation-based strategy exhibit higher productivity levels compared to firms that follow an adoption-based strategy. Nonetheless, the optimal business strategy depends on the distance to the world technology frontier. Firms far from the frontier grow faster when implementing an adoption-based strategy, but an innovation-based strategy better suits firms closer to the technological frontier. We provide evidence indicating that a country’s financial market sophistication, competition policy and innovation capabilities –such as educational level, availability of scientists and engineers, and intellectual property protection– are key determinants of the strategy implemented by firms. The empirical evidence suggests that middle-income traps may occur if competition policy, innovation capabilities and financial market sophistication are not enhanced as a country moves closer to the technology frontier.
    Date: 2021–08
  2. By: Pichler, Anton; Lafond, François; Farmer, J. Doyne
    Abstract: We propose a simple model where the innovation rate of a technological domain depends on the innovation rate of the technological domains it relies on. Using data on US patents from 1836 to 2017, we make out-of-sample predictions and fond that the predictability of innovation rates can be boosted substantially when network effects are taken into account. In the case where a technology's neighbourhood further innovation rates are known, the average predictability gain is 28% compared to simpler time series model with do not incorporate network effects. Even when nothing is known about the future, we find positive average predictability gains of 20%. The results have important policy implications, suggesting that the effective support of a given technology must take into account the technological ecosystem surrounding the targeted technology.
    Keywords: innovation, technology, network, forecasting, patents, spacial econometrics
    Date: 2020–03
  3. By: Anabela Santos (European Commission - JRC)
    Abstract: Based on the case study of Portugal, the present study aims to analyse the alignment of investments in the Portuguese ‘Recovery and Resilience Plan’ with the Smart Specialisation Strategies priorities (2021-2027) of this territory, and then identify opportunities for potential synergies and complementary between funding instruments. With the information available in the Plan and its annex, a detailed analysis is performed to identify investments able to enhance Research & Development, and Innovation and/or to improve the regional innovation eco-systems. The analysis shows that up to €6 Billion of the Plan (37%) may potentially support directly and indirectly the Smart Specialisation in Portugal. However, the effect of such contribution will strongly depend on the final beneficiaries, projects selected, absorption capacity, and governance model. The paper also explains the relevance of Smart Specialisation in the Covid-19 recovery and draft some policy recommendations.
    Keywords: Covid-19 crisis; Innovation; Government Policy; Portugal.
    JEL: E32 O31 G38
    Date: 2021–08
  4. By: Hötte, Kerstin; Jee, Su Jung; Srivastav, Sugandha
    Abstract: Technologies help adapt to climate change but little systematic research about these technologies and their interaction with mitigation exists. We identify climate change adaptation technologies (CCATs) in US patent data to study the technological frontier in adaptation. We find that patenting in CCATs was roughly stagnant over the past decades. CCATs form two main clusters: (1) science-intensive CCATs related to agriculture, health and monitoring technologies; and (2) engineering-based for coastal, water and infrastructure adaptation. 25% of CCATs help in climate change mitigation, and we infer that synergies can be maximized through well designed policy. CCATs rely more on public R&D than other inventions, and CCAT patents are citing more science over time, indicating a growing relevance of research as a knowledge source for innovation. Policymakers can use these results to get greater clarity on where R&D support for CCATs can be directed.
    Date: 2021–08
  5. By: Carvalho, Vasco M. (University of Cambridge); Draca, Mirko (University of Warwick and CAGE); Kuhlen, Nikolas (University of Cambridge and The Alan Turing Institute)
    Abstract: How do firms and inventors move through ‘knowledge space’ as they develop their innovations? We propose a method for tracking patterns of ‘exploration and exploitation’ in patenting behaviour in the US for the period since 1920. Our exploration measure is constructed from the text of patents and involves the use of ‘Bayesian Surprise’ to measure how different current patent-based innovations are from existing portfolios. Our results indicate that there are distinct ‘life-cycle’ patterns to firm and inventor exploration. Furthermore, exploration activity is more geographically concentrated than general patenting, but this concentration is centred outside the main hubs of patenting.
    Keywords: JEL Classification:
    Date: 2021
  6. By: Lin William Cong; Charles M. C. Lee; Yuanyu Qu; Tao Shen
    Abstract: This study reports on the current state-of-affairs in the funding of entrepreneurship and innovations in China and provides a broad survey of academic findings on the subject. We also discuss the implications of these findings for public policies governing the Chinese financial system, particularly regulations governing the initial public offering (IPO) process. We also identify and discuss promising areas for future research.
    Date: 2021–08
  7. By: Ingrid Fasshauer (Université Gustave Eiffel, DICEN-IDF - Dispositifs d'Information et de Communication à l'Ère du Numérique - Paris Île-de-France - UPN - Université Paris Nanterre - CNAM - Conservatoire National des Arts et Métiers [CNAM] - Université Gustave Eiffel)
    Abstract: Livings labs, emerging forms of collaborative innovation including users in their real-life context, are more and more numerous in France. Even if part of them is organized in a network, they are very diverse in terms of portage, legal structure and above all business model. The latter is all the more crucial since Schuurman (2015) notes a mortality rate of 40% on living labs labeled by the largest network of living labs, European Network of Living Labs (ENoLL). A large number of living labs thus have an unwanted temporary nature (Leminen et al., 2012). Based on a survey, it highlights that three forms of value are generated by the living labs studied: knowledge creation, social impact and economic value. Revenues can be exclusively public, exclusively private or mixed. As for the sharing of value, it is a concern for several living labs which respond by ensuring the dissemination of their innovations to a wide audience. Only research-oriented laboratories have intellectual property protection practices. By taking these three dimensions into account, we propose a typology distinguishing between four categories of living labs.
    Keywords: Living Lab,Open Innovation,Business Model,Value sharing
    Date: 2020–09–02
  8. By: Jan Bena; Isil Erel; Daisy Wang; Michael S. Weisbach
    Abstract: Inducing firms to make specialized investments through bilateral contracts can be challenging because of potential hold- up problems. Such contracting difficulties have long been argued to be an important reason for acquisitions. To evaluate the extent to which this motivation leads to mergers, we perform a textual analysis of the patents filed by the same lead inventors of the target firms before and after the mergers. We find that patents of inventors from target firms become 28.9% to 46.8% more specific to those of acquirers’ inventors following completed mergers, benchmarked against patents filed by targets and a group of counterfactual acquirers. This pattern is stronger for vertical mergers that are likely to require specialized investments. There is no change in the specificity of patents for mergers that are announced but not consummated. Overall, we provide empirical evidence that contracting issues in motivating specialized investment can be a motive for acquisitions.
    JEL: G34 L14 L22
    Date: 2021–08
  9. By: Alvedalen, Janna (CIRCLE, Lund University); Carlsson, Bo (Case Western Reserve University)
    Abstract: Entrepreneurial ecosystem (EE) is a popular concept in entrepreneurship studies that describes all actors and the interaction between actors in a specific geographical area. While studies have focused on a single case, this paper explores and compares the nature of five EEs in Life Sciences in Sweden and the US, based on own data collection in all five areas. The paper outlines commonalities and differences between how EEs operate and function in different territorial contexts. It also explores how national and local factors influence the rate and nature of entrepreneurship at the regional level. The paper shows how important it is to take a territorial perspective on EE, because EEs look different in distinct geographical and institutional contexts.
    Keywords: Entrepreneurial Ecosystem; Life Sciences; Sweden; US
    JEL: L26 M21 O33
    Date: 2021–08–20
  10. By: Alvedalen, Janna (CIRCLE, Lund University); Carlsson, Bo (Case Western Reserve University)
    Abstract: Scaling-up is still underexplored in the Entrepreneurial Ecosystem literature. This paper presents a comparative analysis of five Entrepreneurial Ecosystems in Life Sciences in Sweden and the US, based on own data collection. It examines the factors that support or impede the scale-up process of firms in different geographical contexts. The paper outlines firm-specific and firm-external factors important to high-growth firms in Life Science and shows these factors differentiate across distinct geographical contexts. The study sheds light on key enablers and barriers to scaling-up in Entrepreneurial Ecosystems and the roles of different actors including growth ambition, technological expertise, management competence, business model alteration, funding, global firms, human capital, support organizations, local growth culture, hospitals and universities.
    Keywords: Entrepreneurial Ecosystem; scale-up; high-growth firms; Life Sciences; Sweden; U.S.
    JEL: L26 M21 O33
    Date: 2021–08–20
  11. By: Amavilah, Voxi Heinrich; Otero, Abraham; Andres, Antonio Rodriguez
    Abstract: Knowledge economy (KE) has been a central issue in the political economic literature of advanced economies, but little research has focused on the transition towards a KE in Africa. Using a latent profile analysis, six clusters of the KE were found in the region. The clusters range from very prepared with good performance in all KE dimensions (institutional, education, and innovation output) to very unprepared with low performance inf each KE dimension. Lastly, we offer policy recommendations that shed some light on the national and international economic policies towards a more knowledge-oriented environment. One such recommendation is that effective policies should consider both the similarities and dissimilarities of African knowledge economies. How precise that can be done is one direction future research can take.
    Keywords: Africa, model-based clustering; knowledge economy; cross-country comparisons; exploratory analysis
    JEL: C45 O10 O34 O35 O55 P00 P48
    Date: 2021–03–15

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