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on Innovation |
| By: | Koski, Heli; Wang, Maria |
| Abstract: | Abstract This study evaluates the impacts of public subsidies on firms in energy-intensive industries, focusing on R&D subsidies and compensation subsidies. Using firm-level data from Finnish energy-intensive industries between 2010 and 2022, it examines how these subsidies influence firm competitiveness and innovation outcomes. Compensation subsidies, designed to alleviate the additional electricity costs imposed by the EU Emissions Trading Scheme (ETS) on firms operating in certain energy-intensive industries, and to enhance their international competitiveness show no significant effects on employment, value added, or labor productivity. R&D subsidies, instead, demonstrate a substantial positive impact on innovation. Specifically, R&D subsidies significantly increase the citation stocks of climate change mitigation technology patents filed with the United States Patent and Trademark Office (USPTO). Total patent citation stocks associated with the European Patent Office (EPO) and USPTO also show statistically significant growth. |
| Keywords: | Firm subsidy, R&D subsidies, EU ETS, Competitiveness, Green innovation, Patents |
| JEL: | D22 H23 L52 O3 Q58 |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:125 |
| By: | Aidan Toner-Rodgers |
| Abstract: | This paper studies the impact of artificial intelligence on innovation, exploiting the randomized introduction of a new materials discovery technology to 1, 018 scientists in the R&D lab of a large U.S. firm. AI-assisted researchers discover 44% more materials, resulting in a 39% increase in patent filings and a 17% rise in downstream product innovation. These compounds possess more novel chemical structures and lead to more radical inventions. However, the technology has strikingly disparate effects across the productivity distribution: while the bottom third of scientists see little benefit, the output of top researchers nearly doubles. Investigating the mechanisms behind these results, I show that AI automates 57% of "idea-generation" tasks, reallocating researchers to the new task of evaluating model-produced candidate materials. Top scientists leverage their domain knowledge to prioritize promising AI suggestions, while others waste significant resources testing false positives. Together, these findings demonstrate the potential of AI-augmented research and highlight the complementarity between algorithms and expertise in the innovative process. Survey evidence reveals that these gains come at a cost, however, as 82% of scientists report reduced satisfaction with their work due to decreased creativity and skill underutilization. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.17866 |
| By: | Zenne Hellinga; Julia Bachtrögler-Unger; Pierre-Alexandre Balland; Ron Boschma |
| Abstract: | The Smart Specialization Strategy (S3) is a cornerstone of the EU’s Cohesion Policy, with over €61 billion allocated for Research & Innovation from 2014 to 2020. This paper explores the prioritization of technological domains within regional S3 strategies and their influence on funding allocation of the European Regional Development Fund. Our findings indicate that while regions select a broad range of S3 priorities, they tend to prioritize those more related to their existing technological capabilities. This is particularly true for less developed andtransition regions. The lack of selectivity in S3 strategies appears to be mitigated when these priorities are converted into funding allocations. There we observe that funding allocation appears to align more closely with regional capabilities than initial S3 priorities. We also find that, although the complexity of technologies is somewhat considered in selecting S3 priorities, it seems to gain importance when regions dedicate their funding to specific R&I projects. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2502 |
| By: | Samuel Arts; Nicola Melluso; Reinhilde Veugelers |
| Abstract: | New scientific ideas drive progress, yet measuring scientific novelty remains challenging. We use natural language processing to detect the origin and impact of new ideas in scientific publications. To validate our methods, we analyze Nobel Prize-winning papers, which likely pioneered impactful new ideas, and literature review papers, which typically consolidate existing knowledge. We also show that novel papers have more intellectual neighbors published after them, indicating they are ahead of their intellectual peers. Finally, papers introducing new ideas, particularly those with greater follow-on reuse, attract more citations. |
| Keywords: | natural language processing, science, novelty, impact, breakthrough, Nobel, OpenAlex |
| Date: | 2025–01–13 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:757417 |
| By: | Peter Benczur (European Commission - JRC); Juliana Subtil; Tahnee Ooms (European Commission - JRC); Shaun Mark Da Costa (European Commission - JRC); Krzysztof Kania; Catherine Ganzleben; Alessia Fulvimari; Ramona Samson |
| Abstract: | A competitive and resilient Europe requires a systemic transition that fosters economic circularity and far-reaching societal ad-justments. These measures must acknowledge the complexity of wellbeing. Its adequate use for policy and governance requires a system thinking approach. Transforming our socio-economic model re-quires innovations going well beyond the traditional focus on science and technology. The EU’s pursuit of a sustainable transition can only succeed if Europe manages to transform its economies, while remaining globally competitive and resilient.Europe has a unique model to build on that combines competitiveness with addressing inequalities. A just and fair transition considers the social aspects of sustainability and ensures the affordable wellbeing of current and future generations. To ensure the wellbeing of its citizens amid various global challenges, Europe must har-ness the power of innovation. Innovation is increasingly playing a key role to genuinely achieve the ambitious shift towards a new EU growth model, fundamentally transforming mar-kets by creating new ones or improving existing ones. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139898 |
| By: | Ferrazzi, Matteo; Schanz, Jochen; Wolski, Marcin |
| Abstract: | This paper examines the state of innovation in Central, Eastern, and South-Eastern EU countries. Despite increased innovation capacity, the region faces significant challenges threatening its growth and competitiveness, including severe skills shortages, uneven productivity, and barriers to commercialising innovation. The paper highlights the role of foreign direct investment in driving innovation, noting that firms established through greenfield investments exhibit higher productivity than their domestic counterparts. Contributing to the skills shortage are low public R&D spending, insufficient corporate investment in continuing education, and emigration. Limited collaboration between universities and businesses and a shortage of risk capital are key obstacles to bringing innovative ideas to market. To address these challenges, the paper recommends various measures to improve the availability of skilled labour, secure risk capital, foster collaboration between academia and industry, and enhance the overall business environment. Dashboards illustrate how innovation capacity and outcomes vary between CESEE countries, combining data from the EIB's Investment Survey with a range of firm-level public and private datasets. |
| Keywords: | Innovation, competitiveness, EU-CESEE, CESEE, central, eastern and south-eastern Europe, economic growth, EU accession |
| JEL: | O11 O52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:308812 |
| By: | Heng-fu Zou (The World Bank) |
| Abstract: | By the 1880s, the United States had surpassed Britain as the world's largest economy, and by the 1920s, New York City had overtaken London as the world's leading financial center. This remarkable ascent cannot be adequately explained by models of economic growth focused on human capital accumulation, R&D, or technological innovation as championed by Paul Romer (1986, 1991), Robert Lucas (1988), and Aghion and Howitt (1992). These theories, while offering insights into the mechanics of innovation, fail to capture the true drivers of the U.S. economic miracle: liberal ideas of liberty, equality, dignity, and individualism. As Deirdre McCloskey has argued, and Edmund Phelps has elaborated in Mass Flourishing, it was these ideas—rooted in England's traditions yet unfettered by aristocratic constraints in America—that enabled ordinary people to act as entrepreneurs and grassroots innovators, fueling the dynamism of the U.S. economy. |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:723 |
| By: | Elisabeth Nindl (European Commission - JRC); Lorenzo Napolitano (European Commission - JRC); Hugo Confraria (European Commission - JRC); Francesco Rentocchini (European Commission - JRC); Peter Fako (European Commission - JRC); James Gavigan (European Commission - JRC); Alexander Tuebke (European Commission - JRC) |
| Abstract: | The 2024 edition of “The EU Industrial Research & Development (R&D) Investment Scoreboard” continues in the 21st year to monitor and analyse industrial R&D investment trends in the context of the EU’s 3% of GDP R&D investment policy target, which is a key performance indicator of the EU’s long-term competitiveness. As emphasised in the recent ‘Draghi’ report, it is crucial for the EU to substantially increase private R&D investments in order to tackle our historic productivity gaps with respect to main global competitors. The 2024 Scoreboard’s monitors the world's top 2 000 R&D investors, responsible for over three quarters of R&D performed by the business sector globally, based on the financial information in the firms’ latest published audited accounts. Chapter 2 analyses the main global trends and benchmarks the EU’s top R&D investing companies against global competitors. Chapter 3 provides details per sector, and chapter 4 deep-dives on a subsample of the EU’s top 800 R&D investing firms. Chapter 5 analyses the R&D productivity from a long-term perspective, and combines the sample with data on Mergers & Acquisitions (M&A) to delve into corporate innovation strategies. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140129 |
| By: | Sylvia Schwaag-Serger; Luc Soete; Johan Stierna (European Commission - JRC) |
| Abstract: | This scientific report builds on fifteen science for policy concept papers elaborated for the JRC by nineteen independent individual expert within a pool named “Implementing a fair and sustainable economy”. In light of the findings in the Draghi report and the emerging new EU policy agenda, this report analyses synergies and common lines of reflection shared by several experts. Based on their science for policy outcomes, three cross-cutting themes are identified: the new EU industrial policy, the implementation gap of the EU, and different angles to increased security in the EU. The experts stress the importance of understanding and addressing trade-offs between the EU policy goals of competitiveness, sustainability, fairness and security. They reflect on new requirements of science for policy in times of deep transformation; they elaborate on the structural pillars for a new industrial policy; they reflect on the conditions for disruptive innovation and systemic transitions; and they analyse spill over from a comprehensive approach to EU’s new search for security. In all these areas, the experts explore openings for a territorial articulation of the EU-level initiatives in Member States, regions and with citizens. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140513 |