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on Innovation |
| By: | Eugenie Dugoua; Jacob Moscona |
| Abstract: | We examine the economics of climate innovation and its role in the clean technology transition. It outlines the incentives, market failures, and policy levers that shape the development and diffusion of clean technologies; traces global patterns in technology development and deployment; and highlights frontier challenges and open questions related to climate adaptation, critical mineral supply chains, artificial intelligence, and geopolitics. The analysis explores the role of effective climate policy, stressing the relevance of coordinated approaches that match instruments to technology maturity and local context. |
| Keywords: | Climate Change, Innovation, R&D, Clean Energy, Energy Transition, Industrial Policy, Adaptation, Critical Minerals, AI |
| Date: | 2025–11–24 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2135 |
| By: | Woolford Jayne (European Commission - JRC); Haegeman Karel (European Commission - JRC); Hazelkorn Ellen; Cavicchi Alessio; Kroll Henning |
| Abstract: | "Debates upon the place-based dynamics of transformative innovation insist upon directionality across regional, national and EU innovation policies and ecosystems, and multi-actor, -funding and -sector synergies. The potential role and contribution of higher education to boost Europe’s competitiveness is reflected across numerous EU policy initiatives that seek to strengthen their entrepreneurial and innovative capacity and their integration into transformative territorial innovation, recognising the interaction between innovation and education policies, both locally and transnationally, as key in maximising capabilities.The engagement of education actors and the nature of skills and human capital requirements will be context-specific or place-based, varying depending not only on the specific territorial challenge and reality, but also the capacity, experience, culture, governance and incentives of different higher education systems and individual institutions. An understanding of the ecosystem and its various constituent parts and their inter-connections, including that of the entire education and innovation system within the broader organisational and policy context, is vital in ensuring directionality and alignment of multiple actors and functions. Frameworks for reflection and pathways for action for higher education within place-based transformative innovation have therefore been proposed, to support higher education and other territorial actors to re-think their activities and portfolio in relation to the changing educational and innovation paradigms and to support and drive systemic transformation." |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:trater:202502 |
| By: | Paul Winter; Hilary Devine; John Janssen; Chris Thompson (The Treasury) |
| Abstract: | New Zealand has not seen the same growth in productivity as comparable countries. Increased capital intensity and higher levels of innovation are pathways to greater productivity growth that are closely connected. Investment in more technologically sophisticated capital could contribute to productivity improvements along both pathways at once. New Zealand has relatively low capital intensity, with the high cost of capital a contributing factor. Though New Zealand’s investment rate has tracked with other advanced economies, it has not kept pace with rising labour utilisation, leaving the country capital shallow. Innovation increases an economy’s productivity by allowing for a more efficient mix of capital and labour. Improved technology is one route to greater innovation. Technology can be created anew or adopted from elsewhere. Neither creation nor adoption is unambiguously preferable from a productivity perspective. The optimal combination of creation and adoption in supporting productivity depends on context. We set out a number of reasons why adoption through capital investment may be an important path to innovation in New Zealand. New Zealand creates technology at a lower rate than comparable economies, in part because its Research and Development (R&D) expenditure is lower. New Zealand also struggles to convert R&D activity into outputs and broader productivity benefits. Although some business R&D appears an exception to this rule, New Zealand-specific evidence is limited, which makes it difficult to be definitive about the productivity benefits of R&D. Adopting and adapting new technologies, including through capital investments, typically costs less than creating them. Adopting new technologies is shown to have strong positive effects on productivity, and could potentially benefit a large share (up to 95%) of New Zealand firms. Given New Zealand’s struggle to create technology, greater adoption from overseas could form a crucial part of the country’s optimal approach to innovation. At the same time, a dynamic and, to some extent, complementary relationship may exist between creation and adoption – suggesting stronger adoption of new technology may enhance domestic scientific activity. Despite adopting some general-purpose digital technologies at a pace similar to comparable countries, there are signs that technology diffusion (the aggregate economy-wide rate of firm-level technology adoption) is low and slowing. To better understand opportunities for increasing diffusion, we capture in a framework the key factors that affect diffusion and their links to capital investment. We organise the framework around three firm-level factors: exposure and access to new technology, incentives to adopt new technology, and capacity to adopt new technology. We find there are four common channels that directly affect technology diffusion and capital intensity: importing, foreign investment, input costs, and access to finance. New Zealand appears, based on initial assessment, to be weaker than the OECD average across all four channels. Improvements on these channels and across framework settings (such as, competition), could boost productivity growth by lifting both capital intensity and innovation. The fundamental implication is that policy focussing exclusively on technology creation may miss a key pathway to greater innovation: diffusion through new capital investment. Equally, policies exclusively focussed on capital intensity may miss the role of investment in increasing innovation and lifting the technological sophistication of the capital stock. |
| JEL: | D24 E22 O3 O4 O56 O57 |
| Date: | 2025–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:nzt:nztans:an25/12 |
| By: | Purificato Erasmo (European Commission - JRC); Bili Danai (European Commission - JRC); Jungnickel Robert (European Commission - JRC); Ruiz Serra Victoria (European Commission - JRC); Fabiani Josefina (European Commission - JRC); Abendroth Dias Kulani (European Commission - JRC); Fernandez Llorca David (European Commission - JRC); Gomez Emilia (European Commission - JRC) |
| Abstract: | Artificial Intelligence (AI) is fundamentally transforming the scientific process across all stages, from hypothesis generation and experimental design to data analysis, peer review and dissemination of results. In many research fields, such as the examined protein structure prediction, materials discovery and computational humanities, AI accelerates discovery, fosters interdisciplinary collaboration and enhances reproducibility, while improving access to advanced analytical and computational capabilities. These developments align with the European Union (EU)’s vision to make AI tools and infrastructure more accessible, strengthening research in areas of strategic importance such as climate change, health, and clean technologies. However, this progress introduces new challenges, including concerns about algorithmic bias, the proliferation of hallucinations and fabricated data, and the potential erosion of critical thinking skills. AI Adoption remains uneven across scientific domains, and addressing these risks requires robust governance, transparency and alignment with open-science principles. This report, accompanying the publication of the European Strategy for AI in Science, provide scientific evidence to support policymakers in maximising AI’s benefits for EU’s research excellence, innovation and competitiveness, while ensuring its deployment in science remains ethical, inclusive and aligned with European values. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc143482 |
| By: | Juan S. Mora-Sanguinetti; Cristina Peñasco; Rok Spruk |
| Abstract: | This paper analyses the effect of “green regulations” i.e. those aimed at mitigating the effects of climate change and environmental externalities, on innovation, using a novel regulatory database covering the period 2008 – 2022 for Spain. The database identifies regulations at both the national and regional levels through textual analysis. Employing a panel data approach, we assess how different types of environmental regulations—particularly those related to renewable energy—affect firm-level innovation activities. Our findings indicate that national level green regulations have a positive effect on innovation, whereas regional level regulations show mixed or negligible impacts. Importantly, the interaction between national and regional regulations, measuring the simultaneous production of legal texts at both levels can foster innovation but at a reduced pace with respect to the sole production of regulation at the national level. Given the results for regional-level regulation, our results provide evidence in favour of the hypothesis that regulatory fragmentation due to unequal, overlapping, inconsistent or conflicting procedure across jurisdictions may diminish these benefits. |
| Keywords: | Green Regulation, Innovation, Porter Hypothesis, Renewable Energy, Business |
| JEL: | K32 Q5 O44 O13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1016 |
| By: | Hellsten, Mark (University of Tübingen); Khanna, Shantanu (Northeastern University); Lodefalk, Magnus (Örebro University); Yakymovych, Yaroslav (Uppsala University) |
| Abstract: | Artificial intelligence (AI) is expected to reshape labor markets, yet causal evidence remains scarce. We exploit a novel Swedish subsidy program that encouraged small and mid-sized firms to adopt AI. Using a synthetic difference-in-differences design comparing awarded and non-awarded firms, we find that AI subsidies led to a sustained increase in job postings over five years, but with no statistically detectable change in employment. This pattern reflects hiring signals concentrated in AI occupations and white-collar roles. Our findings align with task-based models of automation, in which AI adoption reconfigures work and spurs demand for new skills, but hiring frictions and the need for complementary investments delay workforce expansion. |
| Keywords: | hiring, labor markets, Artificial Intelligence, task content, technological change |
| JEL: | J23 J24 O33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18267 |
| By: | Antelo, Manel; Bru, Lluís |
| Abstract: | This paper examines the commercialization of an external, quality-enhancing (product) innovation within a vertically related market, comparing outright sale and licensing. Licensing may involve a royalty of per-unit or ad valorem type and potential adopters are two downstream firms that source a core input from a single upstream supplier. The analysis reveals that the patentholder’s incentive to license the innovation, particularly through per-unit royalties, outweighs that of an outright sale. This form of technology transfer, however, is shown to potentially reduce consumer and social welfare compared to the pre-innovation state, thus providing a rationale for public policy interventions aimed at restricting royalty-based technology transfer. |
| Keywords: | Vertical industry, quality-enhancing product innovation, sale versus licensing, two-part tariff contracts, per-unit royalty, ad-valorem royalty, welfare |
| JEL: | L13 O32 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126850 |
| By: | William Brock; Anastasios Xepapadeas |
| Abstract: | This paper puts forth a growth model that takes into account the fact that the economy is embedded in a finite Earth. Economic activity uses services which are provided by the biosphere; however, this supply is finite. The question we explore in this paper is whether ideas that drive the accumulation of "brown" and "green" R&D that produces material goods which could be biosphere using or biosphere saving can provide persistent growth when the whole system is embedded in a finite Earth. Or, to put it differently, whether it is possible to have persistent growth supported by idea-driven technical change without violating the impact inequality proposed by Dasgupta (2021), which compares global demand for services provided by the biosphere to the supply of these services. We develop optimal time allocation models and provide conditions that support the feasibility of growth when the net impact on biosphere is zero. |
| Keywords: | growth, limits, biosphere, impact inequality, biosphere saving technology, combination of ideas, spillovers |
| JEL: | O44 J13 Q01 |
| Date: | 2025–11–16 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2564 |