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on Innovation |
| By: | Kapetaniou, Chrystalla; Pissarides, Christoforos Antoniou |
| Abstract: | In a model with robots, and automatable and non-automatable human tasks, we examine robot-labour substitutions and show how they are influenced by a country's 'innovation system'. Substitution depends on demand and production elasticities, and other factors influenced by the innovation system. Making use of World Economic Forum data we estimate the relationship for thirteen countries and find that countries with poor innovation capabilities substitute robots for workers much more than countries with richer innovation capabilities, which generally complement them. In transport equipment and non-manufacturing robots and workers are stronger substitutes than in other manufacturing. |
| Keywords: | robots-employment substitution; automatable tasks; complementary task creation; innovation environment; industrial allocations |
| JEL: | J23 L60 O33 O52 |
| Date: | 2023–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121320&r=ino |
| By: | Bøler, Esther Ann; Moxnes, Andreas; Ulltveit-Moe, Karen Helene |
| Abstract: | This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation and productivity. Using matched firm-bank data for Norway, we find that bank borrowing increased for firms affected by the reform relative to the control group. We also find an increase in the capital stock, employment and innovation as well as equity funding. We interpret the results through the lens of a model of monopolistic competition with potentially collateral constrained heterogeneous firms. Parameterizing the model using well-identified moments from the reduced form exercise, we find quantitatively large gains in output per worker in the sectors in the economy dominated by constrained (and intangible-intensive) firms. The gains are primarily driven by capital deepening, whereas within-industry misallocation plays a smaller role. |
| Keywords: | intangible capital; patents; credit constraints; misallocation; productivity |
| JEL: | G32 L25 O34 O47 |
| Date: | 2023–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121322&r=ino |
| By: | Josh Lerner; Henry J. Manley; Carolyn Stein; Heidi L. Williams |
| Abstract: | University-based scientific research has long been argued to be a central source of commercial innovation and economic growth. Yet at the same time, there have been long-held concerns that many university-based discoveries never realize their potential social benefits. Looking across universities, research and commercialization activities such as start-up formation vary tremendously – variation that could reflect the composition and orientation of faculty research, university-level factors such as patenting and licensing efforts, or broader place-based factors such as location in a technology cluster. We take a first step towards unpacking this heterogeneity in university commercialization by analyzing how the propensity of academic research to spill over to commercial innovation changes when academics move across universities. Our estimates suggest that at least 15–25% of geographic variation in commercial spillovers from university-based research is attributable to place-specific factors. |
| JEL: | O34 R11 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32069&r=ino |
| By: | Ribeiro, Beatriz Couto (Technical University of Berlin (TUB) and University of Campinas (UNICAMP)); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | With the rise of renewable and distributed energy sources, electricity distribution and transmission utilities are facing increasing demand by regulators to innovate and adopt new technologies and transit to smart grids. However, these regulated natural monopolies often lack economic incentives to develop and adopt new technologies. To overcome this barrier, some regulatory authorities have introduced the so-called "innovation-stimuli" regulations to foster experimentation, technological adoption, and innovative solutions. We analyze and compare the effectiveness of two different innovation-stimuli regulations, the cost-pass through and WACC approaches, in the UK and Italy, respectively. To assess the impact of these different regulations on innovation, we use synthetic control (SC) and synthetic difference-in-differences (SDID) methods, which constitute causal inference techniques for small-n case study design and, for the first time, are employed to assess the impact of regulations on innovation outputs. Our panel data encompasses 13 European countries covering 1995 to 2013 and used smart grid projects and patent applications as dependent variables. Differently from what one might expect, not every innovation-stimuli regulation effectively supports innovation outputs. Meanwhile, cost-pass-through significantly and positively affected patent applications in the UK. In Italy, WACC did not affect patent applications, and European Commission-funded projects mostly drove the increases in smart-grid projects. |
| Keywords: | Innovation; Electricity sector; Regulation |
| JEL: | K23 O31 Q48 |
| Date: | 2024–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_007&r=ino |
| By: | Almeida, Derick (University of Coimbra); Naudé, Wim (RWTH Aachen University); Sequeira, Tiago Neves (University of Coimbra) |
| Abstract: | Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) may counter this and even cause an economic growth explosion. In this paper, we critically analyse this claim. We clarify how AI affects the ideas production function (IPF) and propose three models relating innovation, AI and population: AI as a research-augmenting technology; AI as researcher scale enhancing technology; and AI as a facilitator of innovation. We show, performing model simulations calibrated on USA data, that AI on its own may not be sufficient to accelerate the growth rate of ideas production indefinitely. Overall, our simulations suggests that an economic growth explosion would only be possible under very specific and perhaps unlikely combinations of parameter values. Hence we conclude that it is not imminent. |
| Keywords: | automation, artificial intelligence, economic growth, innovation, ideas production function |
| JEL: | O31 O33 O40 J11 J24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16766&r=ino |
| By: | Yi Yiang; Richard S. J. Tol |
| Abstract: | In the era of sustainability, firms grapple with the decision of how much to invest in green innovation and how it influences their economic trajectory. This study employs the Crepon, Duguet, and Mairesse (CDM) framework to examine the conversion of R&D funds into patents and their impact on productivity, effectively addressing endogeneity by utilizing predicted dependent variables at each stage to exclude unobservable factors. Extending the classical CDM model, this study contrasts green and non-green innovations' economic effects. The results show non-green patents predominantly drive productivity gains, while green patents have a limited impact in non-heavy polluting firms. However, in high-pollution and manufacturing sectors, both innovation types equally enhance productivity. Using unconditional quantile regression, I found green innovation's productivity impact follows an inverse U-shape, unlike the U-shaped pattern of non-green innovation. Significantly, in the 50th to 80th productivity percentiles of manufacturing and high-pollution firms, green innovation not only contributes to environmental sustainability but also outperforms non-green innovation economically. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.16030&r=ino |
| By: | Azoulay, Pierre; Qiu, Shumin; Steinwender, Claudia |
| Abstract: | In recent decades, Chinese researchers have become preeminent contributors to the scientific enterprise, as reflected by the number of publications originating from Chinese research institutions. China's rise in science has the potential to push forward the global frontier, but mere production of knowledge does not guarantee that others are able to build on it. In this manuscript, we study how fertile Chinese research is, as measured by citations. Using publication and citation data for elite Chemistry researchers, we show that Chinese authored articles receive only half the citations from the US compared to articles from other countries. We show that even after carefully controlling for the "quality" of Chinese research, Chinese PIs' articles receive 28% fewer citations from US researchers. Our results imply that US researchers do not build as readily on the work of Chinese researchers, relative to the work of other foreign scientists, even in a setting where Chinese scientists have long excelled. |
| Keywords: | research and development; international spillovers; economics of science; citations; patent citations |
| JEL: | I23 O30 |
| Date: | 2023–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121324&r=ino |
| By: | Sanjit Dhami; Paolo Zeppini |
| Abstract: | We consider firms’ choices between a clean technology that benefits, and a dirty technology that harms, the environment. Green firms are more suited to the clean, and brown firms are more suited to the dirty technology. We use a model derived from complexity theory that takes account of true uncertainty and increasing returns to technology adoption. We examine theoretically, the properties of the long-run equilibrium, and provide simulated time paths of technology adoption, using plausible dynamics. The long-run outcome is an ‘emergent property’ of the system, and it unpredictable despite there being no external technological or preference shocks. We describe the role of taxes and subsidies in facilitating adoption of the clean technology; the conflict between optimal Pigouvian taxes and adoption of clean technologies; the optimal temporal profile of subsidies; and the desirability of an international fund to provide technology assistance to poorer countries. Finally, we extend our model to stochastic dynamics in which firms experiment with technological alternatives, and demonstrate the existence of punctuated equilibria. |
| Keywords: | technology choice, climate change, complexity, lock-in effects, increasing returns, green subsidies, public policy, Pigouvian taxes, stochastic dynamics |
| JEL: | D01 D21 D90 H32 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10900&r=ino |
| By: | Furnas, Alexander C; LaPira, Timothy Michael (James Madison University); Wang, Dashun |
| Abstract: | Science, long considered a cornerstone in shaping policy decisions, is increasingly vital in addressing contemporary societal challenges. However, it remains unclear whether science is used differently by policymakers with different partisan commitments. Here we combine large-scale datasets capturing science, policy, and their interactions, to systematically examine the partisan differences in the use of science in policy across both the federal government and ideological think tanks in the United States. We find that the use of science in policy documents has featured a roughly six-fold increase over the last 25 years, highlighting science’s growing relevance in policymaking. However, the pronounced increase masks stark and systematic partisan differences in the amount, content, and character of science used in policy. Democratic-controlled congressional committees and left-leaning think tanks cite substantially more science, and more impactful science, compared to their Republican and right-leaning counterparts. Moreover, the two factions cite substantively different science, with only about 5% of scientific papers being cited by both parties, highlighting a strikingly low degree of bipartisan engagement with scientific literature. We find that the uncovered large partisan disparities are rather universal across time, scientific fields, policy institutions, and issue areas, and are not simply driven by differing policy agendas. Probing potential mechanisms, we field an original survey of over 3, 000 political elites and policymakers, finding substantial partisan differences in trust toward scientists and scientific institutions, potentially contributing to the observed disparities in science use. Overall, amidst rising political polarization and science’s increasingly critical role in informing policy, this paper uncovers systematic partisan disparities in the use and trust of science, which may have wide-ranging implications for science and society at large. |
| Date: | 2024–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:aep9v&r=ino |
| By: | Ron Boschma; ; |
| Abstract: | There is an ongoing dialogue that explores how the Global Production Network and Evolutionary Economic Geography (EEG) literatures can make promising crossovers. This paper aims to contribute to this debate by outlining a theoretical-analytical approach to regional studies on Global Value Chains (GVCs). Building on the EEG literature on relatedness, economic complexity and regional diversification, this approach aims to develop a better understanding of the ability of regions to develop new and upgrade existing GVCs, and why regions may experience the loss or downgrading of existing GVCs. We present the features of this relatedness/complexity approach to GVCs, and discuss potential fields of applications. |
| Keywords: | Evolutionary Economic Geography, Global Value Chains, Global Production Networks, regional diversification, relatedness, economic complexity |
| JEL: | B52 F23 O19 O33 R10 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2402&r=ino |