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on Innovation |
| By: | Teichgraeber, Andreas; Van Reenen, John |
| Abstract: | What research and innovation (R&I) policies should Europe adopt? The world faces a challenge to rebuild after the pandemic, but also faces the same structural slowdown of productivity growth that occurred in the decades before the COVID crisis. We need to have a plan around innovation policy to address the challenge. We show that Europe is less innovative on many dimensions compared to other advanced regions, such as the US and parts of Asia. We review the econometric evidence on R&I policies and argue that there is good evidence for the efficacy of many of them. A mix of R&D subsidies, reinvigorated competition and a big push on expanding the quantity and quality of human capital is needed. These could be bound together around the need for green innovation in order to achieve the mission to radically reduce carbon emissions. |
| Keywords: | innovation; R&D; human capital; Europe |
| JEL: | O31 O32 J24 |
| Date: | 2022–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117801&r=ino |
| By: | Cesare Righi; Davide Cannito; Theodor Vladasel |
| Abstract: | Despite their growing importance for rm innovation strategy and frequent appearance in U.S. patent policy debates, how continuing patent applications are used remains unclear. Turn-of-the-century reforms strongly limited opportunities to extend patent term and surprise competitors, but continuing applications have steadily risen since. We argue that they retain a subtle use, as applicants can file continuations to keep prosecution open and change patent scope after locking in gains with the initial patent. We document a sharp drop in parent abandonment and rise in continuations per original patent after the reforms. Continuing applications are more privately valuable than original patents, are led in more uncertain contexts, for higher value technologies, by more strategic applicants, and react strongly to the notice of allowance. The evidence supports a current strategic use of continuing applications to craft claims over time. |
| Keywords: | Intellectual property, patent scope, continuation, divisional, innovation. |
| JEL: | O31 O34 O38 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1855&r=ino |
| By: | Dittmar, Jeremiah; Meisenzahl, Ralf R. |
| Abstract: | We examine the role of universities in knowledge production and industrial change using historical evidence. Political shocks led to a profound pro-science shift in German universities around 1800. To study the consequences, we construct novel microdata. We find that invention and manufacturing developed similarly in cities closer to and farther from universities in the 1700s and shifted towards universities and accelerated in the early 1800s. The shift in manufacturing was strongest in new and high knowledge industries. After 1800, the adoption of mechanized technology and the number and share of firms winning international awards for innovation were higher near universities. |
| Keywords: | industrialization; invention; universities; cities |
| JEL: | O14 O18 O30 N13 R10 |
| Date: | 2022–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117904&r=ino |
| By: | Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin |
| Abstract: | This paper investigates the long-run effects of prolonged air pollution on firm-level human capital, knowledge and innovation composition. Using a novel firm-level dataset covering almost all industrial firms engaged in science and technology activities in China, and employing a regression discontinuity design, we show that prolonged pollution significantly diminishes both the quantity and the quality of human capital at the firm level. More specifically, we show that air pollution affects firm-level human capital composition by reducing the share of employees with a PhD degree and master’s degree, but instead increasing the share of employees with bachelor’s degree. Moreover, the difference in the composition of human capital materially change the knowledge and innovation structure of the firms, with our estimates showing that pollution decreases innovations that demand a high level of creativity, such as publications and inventions, while increasing innovations with a relatively low level of creativity, such as design patents. Quantitatively, on the intensive margin, one μg/m3 increase in the annual average PM2.5 concentration leads to a 0.188 loss in the number of innovations per R&D employee. Overall, we show that air pollution has created a gap in human capital, knowledge, and innovation between firms in the north and south of China, highlighting the importance of environmental quality as a significant factor for productivity and welfare. |
| Keywords: | Pollution, human capital, knowledge, innovation and China |
| JEL: | O15 O30 O44 Q51 Q56 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2023-01&r=ino |
| By: | Hardik Rajpal; Omar A Guerrero |
| Abstract: | The problem of inferring the technological structure of production processes and, hence, quantifying technological sophistication, remains largely unsolved; at least in a generalizable way. This reflects in empirical literature that either focuses on outputs instead of transformative processes, or preemptively assumes the nature of technology. Building on recent advances in information theory, we develop a method to quantify technological sophistication. Our approach explicitly addresses the transformative process where inputs interact to generate outputs; providing a more direct inference about the nature of technology. More specifically, we measure the degree to which an industry's inputs interact in a synergistic fashion. Synergies create novel outputs, so we conjecture that synergistic technologies are more sophisticated. We test this conjecture by estimating synergy scores for industries across nearly 150 countries using input-output datasets. We find that these scores predict popular export-based measures of economic complexity that are commonly used as proxies for economic sophistication. The method yields synergistic interaction networks that provide further insights on the structure of industrial processes. For example, they reveal that industries from the tertiary sector tend to be disassortative sector-wise. To the extent of our knowledge, our findings are the first data-driven inference of technological sophistication within production processes (on an industrial scale). Thus, they provide the technological foundations of economic complexity and represent an important step toward its empirical microfoundations. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2301.04579&r=ino |
| By: | Gerard Llobet (CEPR); Damien Neven (IHEID, Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | At which stage in the production chain should patent licensing takes place? In this paper we show that under realistic circumstances a patent holder would be better off by licensing downstream. This occurs when the licensing revenue can depend on the downstream value of the product either directly or through the use of ad-valorem royalties. We show that the results are similar when, instead, we assume that the downstream licensee is less informed about the validity of the patent. In most cases, downstream licensing increases allocative efficiency. However, it might reduce the incentives to invest by the manufacturers and thereby reduce welfare. We characterize the circumstances under which a conflict arises between the stage at which patent holders prefer to license their technology and the stage at which it is optimal from a social standpoint that licensing takes place. |
| Keywords: | Royalty Neutrality; Standard Setting Organizations; Patent Licensing; R&D Investment. |
| JEL: | L15 L24 O31 O24 |
| Date: | 2022–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp30-2022&r=ino |
| By: | Luca Sandrini (Research Centre of Quantitative Social and Management Sciences, Budapest University of Technology and Economics) |
| Abstract: | This article shows that the usual result of full adoption of a superior technology induced by pure royalty licensing may not hold when firms have different production technologies. By modeling a licensing game with an external innovator offering per-unit royalty contracts to downstream firms, this article shows that full adoption of the innovation occurs only if i) the new technology is sufficiently more efficient than the best one available in the market or ii) if the firms have similar efficiency levels. Moreover, I disentangle two distinct forces that influence the innovator's choice: a price effect (PE) and a market share effect (MSE). The former highlight the asymmetry in willingness to pay for the new technology. The inefficient firms, which benefit the most from the cost-reducing innovation, are willing to pay a higher price than their efficient rivals to become licensees. The latter illustrates the innovator's aim to maximize the volume of royalties collected by licensing to many firms. When PE dominates MSE, the patent holder sets a higher royalty rate and attracts fewer, less efficient firms. Otherwise, if MSE dominates, the patent holder lowers the royalty rate and attracts more firms to reach as many consumers as possible. From a policy perspective, I show that royalty licensing improves consumer surplus and that the positive effect increases with the number of licensees. |
| Keywords: | Innovation; Licensing; Royalties; Price Effect; Market Share Effect |
| JEL: | L13 L24 O31 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:azp:qsmswp:2302&r=ino |