nep-ino New Economics Papers
on Innovation
Issue of 2023‒10‒16
ten papers chosen by
Uwe Cantner, University of Jena

  1. Bottom-Up Policies Trump Top-Down Missions By Henrekson, Magnus; Stenkula, Mikael
  2. Technological Rivalry and Optimal Dynamic Policy in an Open Economy By Yan Bai; Keyu Jin; Dan Lu
  3. Centralization and Organization Reproduction: Ethnic Innovation in R&D Centers and Satellite Locations By William R. Kerr
  4. Divergent Thinking and Post-Launch Entrepreneurial Outcomes: Non-Linearities and the Moderating Role of Experience By Caliendo, Marco; Rodriguez, Daniel
  5. Individualism, Creativity, and Innovation By Katharina Hartinger
  6. Science, Philanthropy, and American Leadership By Robert W. Conn; Peter F. Cowhey; Joshua S. Graff Zivin; Christopher L. Martin
  7. Leveraging Purchasing Systems to Ensure Access, Stewardship, and Innovation: A Landscape Review of Current and Potential Market Structures for Antimicrobials By Anthony McDonnell; Katherine Klemperer; Morgan Pincombe; Javier Guzman
  8. The global green shift: Where it comes from, how it works, and where it’s heading By Jan Fagerberg
  9. Innovation in forest tree genetics: A comparative economic analysis in the European context By Aline Fugeray-Scarbel; Xavier Irz; Stéphane Lemarié
  10. How is the literature on Digital Entrepreneurial Ecosystems structured? A socio-semantic network approach By Arnauld Bessagnet; Joan Crespo; Jerome Vicente

  1. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Stenkula, Mikael (Research Institute of Industrial Economics (IFN))
    Abstract: Mission-oriented innovation policies are becoming increasingly popular among policymakers and scholars. We maintain that these policies are based on an overly mechanistic view of innovation and economic growth, suggesting that a more bottom-up approach is called for. By invoking an entrepreneurial ecosystem perspective, we point out that innovative entrepreneurship requires many other actors―besides the entrepreneur―whose skills and abilities are necessary to realize an entrepreneurial project. When mission-oriented policies play a large role in the economy, connections between actors in the ecosystem risk becoming distorted. A functioning and well-balanced entrepreneurial ecosystem requires instead an institutional framework that levels the playing field for potential entrepreneurs and encourages productive entrepreneurship. To promote this kind of system, we discuss in more detail eight key areas where appropriate horizontal or bottom-up policy measures can foster innovation and, in the end, the welfare-enhancing productive entrepreneurship policymakers and scholars strive for.
    Keywords: Collaborative innovation bloc; Entrepreneurial ecosystem; Entrepreneurship policy; Institutions; Public choice
    JEL: H50 L26 O31 P16
    Date: 2023–09–28
  2. By: Yan Bai; Keyu Jin; Dan Lu
    Abstract: What are a country's policy options in the face of emerging technologies development in a global economy? To answer this question, we examine optimal dynamic policies in an open economy where technology is endogenously accumulated through R&D innovation. Our key insight is that a country has incentives to influence foreign innovation efforts across sectors and over time---giving rise to optimal policies even when the private innovation allocations are (Pareto) efficient. We derive explicit expressions for optimal taxes linked to both an intratemporal and an intertemporal motive to manipulate foreign technology. A country would want to levy higher tariffs in sectors in which it has a comparative advantage, at the same time invoking domestic innovation subsidies during transition. By contrast, optimal policies under exogenous technology call for uniform tariffs across sectors and no innovation policies.
    JEL: E23 F12 F63 O38
    Date: 2023–09
  3. By: William R. Kerr
    Abstract: We study the relationship between firm centralization and organizational reproduction in satellite locations. For decentralized firms, the ethnic compositions of inventors in satellite locations mostly resemble their host cities, with little link to the inventor composition of their parent firms' R&D headquarters. For highly centralized firms, by contrast, organizational reproduction has an explanatory power equal to half or more of the host city effect. Reproduction is strongest when a firm exhibits a hands-on approach to the satellite facility, such as cross-facility team collaboration or internal talent mobility.
    JEL: F22 F23 J61 L22 L25 M51 O31 O32 R11 R12
    Date: 2023–09
  4. By: Caliendo, Marco (University of Potsdam); Rodriguez, Daniel (University of Potsdam)
    Abstract: Divergent thinking is the ability to produce numerous and diverse responses to questions or tasks, and it is used as a predictor of creative achievement. It plays a significant role in the business organization's innovation process and the recognition of new business opportunities. Drawing upon the cumulative process model of creativity in entrepreneurship, we hypothesize that divergent thinking has a lasting effect on post-launch entrepreneurial outcomes related to innovation and growth, but that this relation might not always be linear. Additionally, we hypothesize that domain-specific experience has a moderating role in this relation. We test our hypotheses based on a representative longitudinal sample of 457 German business founders, which we observe up until 40 months after start-up. We find strong relative effects for innovation and growth outcomes. For survival we find conclusive evidence for non-linearities in the effects of divergent thinking. Additionally, we show that such effects are moderated by the type of domain-specific experience that entrepreneurs gathered pre-launch, as it shapes the individual's ideational abilities to fit into more sophisticated strategies regarding entrepreneurial creative achievement. Our findings have relevant policy implications in characterizing and identifying business start-ups with growth and innovation potential, allowing a more efficient allocation of public and private funds.
    Keywords: survival, entrepreneurial performance, divergent thinking, business expansion, innovation
    JEL: L25 L26 M13 M51
    Date: 2023–09
  5. By: Katharina Hartinger (Johannes Gutenberg-University Mainz, Germany)
    Abstract: Individualist societies are more innovative, but little is known about the underlying individual behaviors. I use international labor-market and patent data to show that individualism—the cultural dimension that emphasizes individual achievements over collective action—positively affects individual innovation. Comparing migrants from different cultural origins within the same destination country and using variation in individualism at the country, region, and person level, I find that more individualist migrants select into more innovative occupations—including research, creative jobs, and ambitious entrepreneurship. Individualists also engage more readily in knowledge diffusion on the job—even when accounting for occupational selection—by investing more time in active learning. Taken together, those innovation choices account for 44 percent of the individualism productivity premium. Individualism also positively affects patenting behavior as a direct innovation output measure.
    JEL: O31 D91 J24 Z13
    Date: 2023–09–27
  6. By: Robert W. Conn; Peter F. Cowhey; Joshua S. Graff Zivin; Christopher L. Martin
    Abstract: Investments in the US Science, Technology, Engineering, Medicine and Innovation (STEMI) enterprise come from many different sectors and their combined effect crucially enhances the nation’s competitiveness. Philanthropy is an under-appreciated component of this ecosystem, providing $21.5 billion of research funding at universities and non-profits in 2021 or roughly 42% of the federal outlay at these institutions. In this paper, we argue that these decentralized and diverse set of philanthropic funders alter the incentives and behavior within the US research enterprise to make it more risk tolerant and more innovative than government or business funding alone would yield. It also enables significant innovation in the development of human capital in STEMI areas. We conclude with a comparison of the US research ecosystem to that of China to understand how the two systems differ, with a particular emphasis on the differentiating role that philanthropy may play in influencing the scientific and economic competitiveness of each nation.
    JEL: H4 L30 O30
    Date: 2023–09
  7. By: Anthony McDonnell (Center for Global Development); Katherine Klemperer (Center for Global Development); Morgan Pincombe (Center for Global Development); Javier Guzman (Center for Global Development)
    Abstract: This working paper aims to synthesise existing research and thinking on how antimicrobials are procured and ways to improve the current purchasing system. It examines interventions designed to improve innovation, access, and stewardship of antimicrobials and seeks to lay the foundation for a new CGD working group, A New Grand Bargain for Antimicrobial Procurement: Improving Purchasing Systems to Enhance Access, Stewardship, and Innovation for Antimicrobials in Low- and Middle-Income Countries (LMICs). We conducted a systematic review of academic and grey literature and identified 141 papers. We also interviewed 28 stakeholders with a broad range of expertise in this field. Key findings include: • The literature is overly focused on high-income countries (HICs). Whilst 51 percent of papers mention an LMIC (72/141), fewer than 10 percent exclusively focus on LMICs (14/141). Also, just 12.5 percent of papers with listed authors (16/128) have any authors based in an LMIC. LMIC- and HIC-based groups have very different priorities, as evidenced in both the interviews and the literature. Those in the former group focus more on access to drugs, while the latter are more concerned about innovation. Both groups highlighted stewardship as a priority. • There is broad agreement that a new purchasing system is needed for antimicrobials in LMICs. Although the literature lacks consensus about the best way to reform purchasing systems, interview findings suggest a more recent coalescence around subscription models in HICs. In these models, purchasers pay annually for a drug, regardless of how many units are needed. The National Health System in the United Kingdom is currently piloting such a system with two drugs, and the US Congress is considering its own version with the PASTEUR Act. There is less clarity on the optimal system for LMICs. • There is insufficient research on how to implement policies and—with the exception of the GAIN Act, a 2012 piece of US legislation that grants an additional five years of exclusivity for qualifying antimicrobials—a dearth of research evaluating previously implemented initiatives.
    Keywords: AMR, Antimicrobial resistance, procurement
    JEL: I11 H57
    Date: 2022–06–28
  8. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: This chapter analyses the ongoing global green shift from an evolutionary (Schumpeterian) perspective. Understanding such large techno-economic shifts, their causes, dynamics, and implications, has been a recurrent theme in evolutionary economics, from Schumpeter onwards. Following this perspective, what primarily characterizes large techno-economic shifts is that the radical changes they entail concern not just one but a whole range of industries and sectors, including ways of life, the organization of work, and infrastructure. The driving forces behind such shifts, according to Christopher Freeman, Carlota Perez and other contributors to the literature, are key inputs (or factors) characterized by rapidly declining costs, almost unlimited supply, and very broad applicability. This chapter argues that the global green shift, currently unfolding, is a techno-economic shift of a similar (or even larger) magnitude as the earlier shifts discussed by Freeman and Perez and others. The analysis shows that the green shift is driven by interaction of innovations in three interrelated areas, that is, renewable energy innovation; innovation in energy-using sectors; and energy infrastructure innovation, e.g., energy storage and distribution. A number of key innovations from these three areas are identified and their development and spread during the last hundred years or so explored. Particular attention is given to the various factors, including policy, that have influenced these processes. Finally, the lessons for policymaking supporting the global green shift are considered.
    Date: 2023–09
  9. By: Aline Fugeray-Scarbel (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Xavier Irz (Helsingin yliopisto = Helsingfors universitet = University of Helsinki); Stéphane Lemarié (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)
    Abstract: In the context of global environmental change, European forests are expected to fulfil a broad range of functions, including the supply of raw materials to the bioeconomy, biodiversity preservation, and the provision of ecological services. Given fast progress in applied genetics, the selection and diffusion of genetically improved forest reproductive material (FRM) has a role to play towards the achievement of some of those goals. We therefore investigate European forest tree breeding conceived as an innovative activity on the basis of four case studies (eucalyptus in Portugal, maritime pine in France, and Norway spruce in Sweden and Finland), using a conceptual framework combining the innovation system approach and the economics of innovation. The genetic progress achieved for each of those species has been steady since the beginning of tree breeding activities. Despite that, we identify both systemic issues and market failures that hinder FRM genetic innovation and make the prospects of a forest tree breeding revolution unlikely. While the innovation systems in the studied countries are structurally sound, we identify several functional deficiencies. We also identify incentive problems limiting both supply and demand of genetically improved FRM. On the demand side, forest owners value improved FRM only moderately because of long lags between plantation and harvest, imperfect knowledge of the potential gains from adoption of genetically improved FRM, and risk aversion. On the supply side, returns to investments in genetic improvement are heavily constrained by the slowness of the breeding process, capacity constraints related to FRM production, limited demand-pull and regulatory uncertainty. Those incentive problems are partially overcome in situations where the industry is vertically integrated, from FRM production to wood processing, as observed in the case of eucalyptus in Portugal or Norway spruce in Sweden. In the other cases, public support for breeding programmes is paramount.
    Keywords: Forest tree breeding, Case studies, France, Portugal, Sweden, Finland, Market failure, Systemic failure, Genetic selection
    Date: 2023
  10. By: Arnauld Bessagnet; Joan Crespo; Jerome Vicente
    Abstract: The paper provides a socio-semantic analysis of a scientific field which is of a growing importance to the academic community and policy makers: the field of digital entrepreneurial ecosystems. The purpose is to understand the way in which the ideas, theories and knowledge domains that nourish the field are structured. For this, we propose a methodology that combines the analysis of the structural properties of the co-authorship network with the semantic specificities that shape the sub-communities that interact within the field. The results show that despite the sign of a scientific integration, some key scientific issues on digital entrepreneurial ecosystems remain under-explored. We conclude on the importance of the method to identify knowledge gaps to be filled and better frame private and public incentives for future collaborations.
    Keywords: Digital Entrepreneurial Ecosystems; State-of-the-art review; Socio-semantic networks, scientometrics
    Date: 2023–10

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