nep-ino New Economics Papers
on Innovation
Issue of 2021‒12‒20
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Mission-oriented innovation policy: From ambition to successful implementation By Lindner, Ralf; Edler, Jakob; Hufnagl, Miriam; Kimpeler, Simone; Kroll, Henning; Roth, Florian; Wittmann, Florian; Yorulmaz, Merve
  2. The Fallacy in Productivity Decomposition By Simon Bruhn; Thomas Grebel; Lionel Nesta
  3. The Dynamics of French Universities in Patent Collaboration Networks By Isabel Cavalli; Charlie Joyez
  4. Green technologies, complementarities, and policy By Nicolo Barbieri; Alberto Marzucchi; Ugo Rizzo
  5. For the rest of our lives: Flexibility and innovation in Italy. By Dughera, Stefano; Quatraro,Francesco; Ricci,Andrea; Vittori,Claudia
  6. What Drives Innovation? Lessons from COVID-19 R&D By Ruchir Agarwal; Patrick Gaulé
  7. Inequality in the use frequency of patent technology codes By Jos\'e Alejandro Mendoza; Faustino Prieto; Jos\'e Mar\'ia Sarabia
  8. Entrepreneurial Ecosystems and Regional Persistence of High Growth Firms: A 'Broken Clock' Critique By Coad, Alex; Srhoj, Stjepan
  9. Why U.S. Immigration Matters for the Global Advancement of Science By Ruchir Agarwal; Geoff Smith; Patrick Gaulé
  10. A procedural perspective on academic spin-off creation: The changing relevance of academic and commercial logics By Uwe Cantner; Philip Doerr; Maximilian Goethner; Matthias Huegel; Martin Kalthaus
  11. Social compensation, retraining, shorter working hours? Citizen's social policy priorities for the age of automation By Busemeyer, Marius R.; Tober, Tobias

  1. By: Lindner, Ralf; Edler, Jakob; Hufnagl, Miriam; Kimpeler, Simone; Kroll, Henning; Roth, Florian; Wittmann, Florian; Yorulmaz, Merve
    Abstract: The major problems facing society, the so-called »Grand Challenges«, call for mission-oriented innovation policy. We aim to make a conceptual contribution here and identify the main components.
    Date: 2021
  2. By: Simon Bruhn (Ilmenau University of Technology, Ilmenau, Germany); Thomas Grebel (Ilmenau University of Technology, Ilmenau, Germany); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School)
    Abstract: This paper argues that the typical practice of performing growth decompositions based on log-transformed productivity values induces fallacious conclusions: using logs may lead to an inaccurate aggregate growth rate, an inaccurate description of the microsources of aggregate growth, or both. We identify the mathematical sources of this log-induced fallacy in decomposition and analytically demonstrate the questionable reliability of log results. Using firm-level data from the French manufacturing sector during the 2009-2018 period, we empirically show that the magnitude of the log-induced distortions is substantial. Depending on the definition of accurate log measures, we find that around 60-80% of four-digit industry results are prone to mismeasurement. We further find significant correlations of this mismeasurement with commonly deployed industry characteristics, indicating, among other things, that less competitive industries are more prone to log distortions. Evidently, these correlations also affect the validity of studies that investigate the role of industry characteristics in productivity growth.
    Keywords: productivity decomposition, growth, log approximation, geometric mean, arithmetic mean
    JEL: C18 L22 L25 O47
    Date: 2021–12
  3. By: Isabel Cavalli (Université Côte d'Azur, France; CNRS, GREDEG; Institute of Economics, Scuola Superiore Sant'Anna, Italy); Charlie Joyez (Université Côte d'Azur, France; CNRS, GREDEG)
    Abstract: Innovation is a dynamic process whose complexity lies in networks among heterogeneous actors, with collaboration often ending in patent co-ownership. Governments introduced many policies to redefine the role of universities in research collaboration once acknowledging their value in scientific knowledge. This paper explores how patent co-ownership evolved in France after decisive policy interventions (1999, 2006, 2007). Using French copatent data (1978-2018), we first employ Network Analysis to capture the evolution of centrality of French Universities. We then apply a Dif-in-Dif, incorporating a Propensity Score Matching (PSM), to investigate the potential causal relationship between policy interventions and the evolution of universities' centrality, contrasting with with French Public Research Organizations as well as German and Italian universities. Our results point to the increasing centrality gained by French universities in patenting co-ownership over the years and its essential role, as an innovator actor, in the French innovation system. Although the Innovation Act (1999) positively impacted their centrality, the impact of 2006-on legislation is either null or even negative, offsetting the initial trend.
    Keywords: Innovation dynamics, Universities, Collaborative Patents, Network centrality, treatment effect
    JEL: C54 D85 O32 O33 O34 O38
    Date: 2021–12
  4. By: Nicolo Barbieri (Department of Economics and Management, University of Ferrara, Ferrara, Italy); Alberto Marzucchi (Gran Sasso Science Institute, Social Sciences, L’Aquila, Italy); Ugo Rizzo (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy)
    Abstract: The present study explores the technological complementarities between green and non green inventions. First, we look at whether inventive activities in climate-friendly domains de pend on patenting in related technological domains that are not green. Based on patent data filed over the 1978–2014 period, we estimate a spatial autoregressive model using co-occurrence matrices to capture technological interdependencies. Our first finding highlights that the develop ment of green technologies strongly relies on advances in other green and in particular non-green technological domains, whose relevance for the green economy is usually neglected. Building on this insight, we detect the non-green complementary technologies that co-occur with green ones and assess whether environmental policies affect this particular instantiation of technologies at the country level. The results of the instrumental variable approach confirm that while envi ronmental policies spur green patenting, they do not displace the development of the non-green technological pillars upon which green inventions develop.
    Keywords: Green technology, patent data, environmental policy, network-dependent innovation
    Date: 2021–11
  5. By: Dughera, Stefano; Quatraro,Francesco; Ricci,Andrea; Vittori,Claudia (University of Turin)
    Abstract: We study the effect of temporary workers on innovation both theoretically and empirically. First, we develop a model where a representative firm chooses between different types of projects (routine vs innovative) and different types of labor contracts (temporary vs permanent). In doing so, it considers the effect of these different strategies on the workers’ incentives to invest in firm-specific skills. Our key finding is that firms offering temporary contracts are less likely to invest in innovative projects, and that this is effect is stronger in industries characterized by a “garage-business” innovation regime. Second, we test our hypotheses using firm-level data on employment composition and patent filing. Consistently with our theoretical predictions, we find that temporary workers are detrimental to innovation, and that this effect is mitigated by the concentration of patent-filing at the industry-level.
    Date: 2021–09
  6. By: Ruchir Agarwal; Patrick Gaulé
    Abstract: To examine the drivers of innovation, this paper studies the global R&D effort to fight the deadliest diseases and presents four results. We find: (1) global pharmaceutical R&D activity—measured by clinical trials—typically follows the ‘law of diminishing effort’: i.e. the elasticity of R&D effort with respect to market size is about ½ in the cross-section of diseases; (2) the R&D response to COVID-19 has been a major exception to this law, with the number of COVID-19 trials being 7 to 20 times greater than that implied by its market size; (3) the aggregate short-term elasticity of science and innovation can be very large, as demonstrated by aggregate flow of clinical trials increasing by 38% in 2020, with limited crowding out of trials for non-COVID diseases; and (4) public institutions and government-led incentives were a key driver of the COVID-19 R&D effort—with public research institutions accounting for 70 percent of all COVID-19 clinical trials globally and being 10 percentage points more likely to conduct a COVID-19 trial relative to private firms. Overall, while economists are naturally in favor of market size as a driving force for innovation (i.e.“if the market size is sufficiently large then innovation will happen”), our work suggests that scaling up global innovation may require a broader perspective on the drivers of innovation—including early-stage incentives, non-monetary incentives, and public institutions.
    Keywords: COVID-19; Innovation; Market Size; Pharmaceutical Industry
    Date: 2021–02–19
  7. By: Jos\'e Alejandro Mendoza; Faustino Prieto; Jos\'e Mar\'ia Sarabia
    Abstract: Technology codes are assigned to each patent for classification purposes and to identify the components of its novelty. Not all the technology codes are used with the same frequency - if we study the use frequency of codes in a year, we can find predominant technologies used in many patents and technology codes not so frequent as part of a patent. In this paper, we measure that inequality in the use frequency of patent technology codes. First, we analyze the total inequality in that use frequency considering the patent applications filed under the Patent Co-operation Treaty at international phase, with the European Patent Office as designated office, in the period 1977-2018, on a yearly basis. Then, we analyze the decomposition of that inequality by grouping the technology codes by productive economic activities. We show that total inequality had an initial period of growth followed by a phase of relative stabilization, and that it tends to be persistently high. We also show that total inequality was mainly driven by inequality within productive economic activities, with a low contribution of the between-activities component.
    Date: 2021–11
  8. By: Coad, Alex; Srhoj, Stjepan
    Abstract: The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004-2019, and Slovenia for 2008-2014). Overall, there is no clear persistence in regional HGF shares - regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a 'broken clock' critique - just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outcomes (HGF shares) are predicted using time-invariant variables (such as local universities, institutions and infrastructure).
    Keywords: High-Growth Firms,Persistence,Regional Persistence,Entrepreneurial Ecosystems,Clusters,Sectoral Systems of Innovation
    JEL: L25
    Date: 2021
  9. By: Ruchir Agarwal; Geoff Smith; Patrick Gaulé
    Abstract: This paper studies the impact of U.S. immigration barriers on global knowledge production. We present four key findings. First, among Nobel Prize winners and Fields Medalists, migrants to the U.S. play a central role in the global knowledge network—representing 20-33% of the frontier knowledge producers. Second, using novel survey data and hand-curated life-histories of International Math Olympiad (IMO) medalists, we show that migrants to the U.S. are up to six times more productive than migrants to other countries—even after accounting for talent during one’s teenage years. Third, financing costs are a key factor preventing foreign talent from migrating abroad to pursue their dream careers, particularly for talent from developing countries. Fourth, certain ‘push’ incentives that reduce immigration barriers—by addressing financing constraints for top foreign talent—could increase the global scientific output of future cohorts by 42 percent. We concludeby discussing policy options for the U.S. and the global scientific community.
    Keywords: Immigration;Science;Talent;Universities;WP;IMO medalist;migrants to the U.S.;IMO participant;productivity regression;IMO point; Migration; Productivity; Income; Global
    Date: 2021–02–19
  10. By: Uwe Cantner (Friedrich Schiller University Jena, and University of Southern Denmark); Philip Doerr (Friedrich Schiller University Jena); Maximilian Goethner (Friedrich Schiller University Jena, and IZA - Institute of Labor Economics, and University of Twente); Matthias Huegel (Friedrich Schiller University Jena); Martin Kalthaus (Friedrich Schiller University Jena)
    Abstract: We analyze the influence of two contradicting settings on the success in the academic spin-off creation process. Scientists, who are embedded in the academic setting, have to reach out and adapt to the logics of the commercial setting to successfully found their firm. However, along this process, many scientists fail because they cannot overcome the contradictions between these logics. We provide the first empirical evidence on the relevance of these two contradicting logics along the spin-off creation process. Based on a phase-based conceptualization of the spin-off process, we hypothesize a decreasing relevance of the academic setting and an increasing relevance of the commercial setting for successful transitions between the process phases. We test these relationships with a representative sample of German scientists using dominance analysis to determine the relative importance of the two settings. Our findings show a decreasing relative importance of the academic setting along the spin-off creation process, in line with our hypotheses. The relevance of the commercial setting initially increases before it decreases in the latest stage of the process, contrary to our hypothesis. Additionally, we find that the commercial setting is generally more important than the academic setting, especially in the beginning of the process. Our results provide a deepened understanding of the academic spin-off creation process and extend existing theories. Furthermore, they provides intervention points for policy along the spin-off creation process.
    Keywords: Academic Entrepreneurship, Transition Process, Phase Model, Dominance Analysis
    JEL: L26 O31 O33
    Date: 2021–12–09
  11. By: Busemeyer, Marius R.; Tober, Tobias
    Abstract: Robotization, automation and digitalization are transforming labor markets around the globe - more than ever now that a pandemic has shown that our economy is fragile and dependent on specific, often unrecognized jobs. What do citizens expect from their governments in response? Our study of 24 OECD countries shows deep concerns about tech-related job risks. But technological change also raises many positive expectations. Education and training measures for those affected by tech-related change are greeted with widespread approval. Disadvantaged workers, however, would prefer short-term compensations for the potential loss of their jobs. Governments are advised to strike a balance between making social investments in the digital knowledge economy and awarding social transfers.
    Date: 2021

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