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on Innovation |
| By: | Tiago Neves Sequeira (University of Coimbra, Faculty of Economics and CeBER) |
| Abstract: | Many frontier technologies generate both civilian and military applications, raising the question of how policies targeting one application influence innovation when knowledge is shared across sectors. This paper develops a Schumpeterian model of directed technical change in which civilian, military and dual-use technologies coexist as endogenous innovation ladders. The key innovation is to distinguish between a non-rival stock of knowledge generated by dual-use research and rival intermediate goods supplying civilian and military markets. Consequently, policy interventions in one sector redirect research incentives throughout the economy. The model admits a stable balanced-growth path with an interior allocation of research effort. A calibration based on U.S. patent stocks, aggregate R&D intensity and defence R&D expenditure illustrates the transition dynamics. Modest policy interventions substantially redirect innovation towards dual-use technologies, generating civilian knowledge spillovers while leaving long-run aggregate growth largely unchanged. |
| Keywords: | Directed technical change, dual-use innovation, endogenous growth, defense R&D, Schumpeterian growth, industrial policy |
| JEL: | O31 O32 O33 O40 H56 L16 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2026-06 |
| By: | D'Alessandro, Francesco; Santarelli, Enrico; Vivarelli, Marco |
| Abstract: | This study examines how regional technological relatedness and local AI knowledge influence regional innovative activity, as measured by patenting activity. Using a novel three-way longitudinal dataset (670 four-digit CPC classes × 302 NUTS-2 regions × nine four-year periods, 1986-2021) and leveraging a deep learning-based identification of AI patents, we show that two broad mechanisms operate in parallel. First, in accordance with the extant literature, technologies that are cognitively close to a region's existing patent portfolio enjoy higher patenting activity, confirming that relatedness remains a strong and persistent predictor of innovative output. Second, local AI endowments are positively associated with patenting across technological fields, even after conditioning on relatedness, indicating that AI plays an enabling and cross-cutting role in a given regional innovation system. Moreover, the interaction between relatedness and AI turns out to be negative and statistically significant, implying that AI attenuates the extent to which local innovative efforts depend on the technology's proximity to the regional portfolio. In sum, AI appears to enhance overall local innovative activity while reducing its reliance on pre-existing regional knowledge structures. |
| Keywords: | Artificial intelligence, AI, technological change, regional innovation, relatedness |
| JEL: | O31 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1792 |
| By: | Ina Ganguli; Jeffrey Lin; Vitaly Meursault; Nicholas Reynolds |
| Abstract: | Over nearly two centuries, U.S. inventions have become increasingly dissimilar: not just fewer head-to-head collisions between inventors, but growing distance between neighboring inventions. We document this secular decline in similarity using validated neural language models applied to the full text of claims in over 11 million U.S. patents (1836–2023), corroborated by a 98 percent decline in patent interference rates, a measure of independent simultaneous invention. Measuring this correctly requires validation, since different representations of the same patent text can yield opposite conclusions about whether inventions are converging or spreading out. Our validation framework, the first systematic comparison for patent text, selects among these locations in idea space. The model explains spreading out and connects it to several independently documented patterns — rising R&D investment per inventor, increasing patent values, weakening knowledge spillovers, and declining research productivity. The mechanism is spatial; as inventors spread out to capture new territory, inventions become more valuable but also more costly for others to absorb. In doing so, the model turns spillover intensity, innovation step size, and research productivity from fixed primitives into outcomes of inventor positioning. A calibrated decomposition attributes roughly 40 percent of the long-run decline in U.S. research productivity to these spatial forces, alongside traditional explanations such as fishing out and the burden of knowledge. Where inventors stand relative to each other in idea space matters as much for growth as how many of them there are. |
| Keywords: | Idea Space; Knowledge Spillovers; Research Productivity; Endogenous Growth; Technological Distance; Patent Embeddings |
| JEL: | O31 O41 O47 C55 |
| Date: | 2026–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103607 |
| By: | Dohse, Dirk; Fehrenbacher, Sophia |
| Abstract: | African innovators typically suffer from severe resource constraints and need to develop strategies to cope with these constraints. This paper focusses on external knowledge sourcing and, in particular, on the role of cooperation as a means to compensate for missing resources. Findings suggest that domestic inter-firm cooperation is of outstanding importance for firm-level innovation in Nigeria, whereas cooperation with other partners (research institutions, foreign firms, consultants, or the government) has no sizable impact on the innovative performance of Nigerian firms. Moreover, we show that it is in particular young firms and firms suffering from financial constraints that benefit from cooperation, whereas foreign-owned firms benefit less. Our findings contribute to a better understanding of the drivers of firm-level innovation in sub-Saharan Africa and have important implications for firm strategies and innovation policy. |
| Keywords: | Resource-constrained innovation, Knowledge sourcing, Inter-firm cooperation, Coactive learning, Africa |
| JEL: | D22 L25 O32 O36 O55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:341859 |
| By: | Alice Albonico; Marco Guerzoni |
| Abstract: | Is the aggregate productivity slowdown in the U.S. driven by a decline in successful innovation? This paper addresses this question using a medium-scale DSGE model with endogenous technology growth. The model distinguishes between two innovation channels: a spillover channel, which governs the efficiency with which aggregate R&D advances the technological frontier, and a difficulty channel, which governs the probability that sectoral R&D efforts successfully generate innovation. We estimate the model on U.S. macroeconomic and R&D data over the period 1984-2019, using macroeconomic observables and incorporating a patent-text-based measure of technological creativity that is informative about innovation probability. The results show that spillover shocks are the main drivers of short and medium run fluctuations in TFP growth, while R&D difficulty shocks mainly explain the probability of successful innovation. Once creativity data are included, the estimated difficulty shock becomes less volatile and more persistent, suggesting that innovation difficulty is a slow moving force shaping successful innovation. However, its quantitative contribution to TFP fluctuations remains substantially smaller than that of spillover shocks, although it matters in specific episodes. |
| Keywords: | Innovation Difficulty, Endogenous growth, R&D investments, Bayesian estimation |
| JEL: | E3 O3 O4 C11 C13 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:580 |
| By: | Fichter, Klaus; Neumann, Thomas; Olteanu, Yasmin; Grothey, Tim; Block, Jörn |
| Abstract: | The Green Startup Report 2026, published by the Borderstep Institute for Innovation and Sustainability, analyzes the current development of the green startup landscape in Germany and continues the scientific observation of the scene that has been carried out continuously since 2013. The long-term perspective enables a reliable classification of structural trends, technological developments, and changes in startup dynamics. The green startup community has continued to grow and now comprises 4, 668 companies (founded between 2016 and 2025). Green startups make a key contribution to Germany's technological innovation capacity and climate protection performance as a business location. They are characterized by a high patent rate, above-average research intensity, and significant CO2 reduction potential. On average, their solutions reduce greenhouse gas emissions by more than 70 percent compared to standard technologies on the market. At the same time, the report shows a decline in start-up momentum for the first time in years. Despite stable and growing green tech markets, shifts in political and public attention as well as regulatory uncertainties, particularly in capital-intensive sectors, are slowing further growth. The Green Startup Report 2026 thus provides a key data basis for the strategic development of German start-up, innovation, and climate policy. |
| Keywords: | green startups, climate protection potential, green startup ecosystem, Business model, Sustainable business model, Green tech business model, Impact potential, Energy transition, Sustainable chemistry, Sustainability, GreenTech, Climate Forward Financing |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:341854 |
| By: | Krieger, Bastian; Steines, Leon; Bangert, Hendrik Hermann; Glas, Andreas; Eßig, Michael |
| Abstract: | Public organizations rely on open innovation to maintain and improve public service performance. Suppliers are a key source of such innovation. Public contracting authorities act as the interface between public organizations and supply markets, shaping whether supplier innovations are identified, rewarded, and selected. Combining representative firm-level data from the German Community Innovation Survey with official tender-level data from the Tenders Electronic Daily database, we construct firms' public procurement award histories between 2006 and 2023. We distinguish between four tender categories that differ by geographic scope (domestic versus international) and award mechanism (price-based versus criteria-based). We further differentiate between "real outsiders" and "pseudo-outsiders" based on experience supplying public markets. Using multivariate probit models, we examine how different degrees of innovation novelty are associated with supplier selection across tender categories and outsider status. Three findings emerge. i) Suppliers' category-specific procurement experience increases the likelihood of subsequent selection, indicating rigidity in public procurement markets. ii) Price-based tenders are associated with firm-level novelties, whereas criteria-based tenders are associated with market-specific novelties. iii) These innovation advantages are concentrated among "real outsiders" and largely disappear for "pseudo-outsiders", for whom prior category-specific procurement experience becomes the main predictor of subsequent selection. |
| Keywords: | Public procurement, open innovation, supply markets, tender design, competition |
| JEL: | H57 O36 D40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:341998 |
| By: | Aaron Chatterji; Daniel Rock; Eduard Talamas |
| Abstract: | Nonaka emphasized that innovation is the result of a continuous back-and-forth between tacit and explicit knowledge. Artificial intelligence introduces a fundamentally new object into this process -- tacit machine knowledge -- but Nonaka's ideas are more relevant than ever. The central role of the knowledge-creating company remains the same: to create the shared context in which different kinds of knowledge can feed off each other, become organizational knowledge, and set off further cycles of innovation. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.29227 |
| By: | Emily Cook; Devaki Ghose; Ekaterina Khmelnitskaya |
| Abstract: | This paper examines how federal science and engineering research funding—although intended to advance research—affects degree production and programs offered in science, technology, engineering, and mathematic (STEM). Using data from 1971–2016, the study implements a triple-difference design that exploits variation across colleges, time, and fields of study. The findings show that federal grants generate 27.4 percent of doctorates and 14.7 percent of undergraduate science, technology, engineering, and mathematics degrees, as well as 6.3 percent of doctoral programs and 3.7 percent of undergraduate programs in STEM annually across 200 U.S. research universities. The impacts are concentrated in biology and engineering, aligning with the priorities of major funders such as the Department of Health and Human Services, the National Science Foundation, and the Department of Defense. These findings suggest that research grants to universities may generate a "double dividend, " simultaneously expanding the supply of skilled labor in targeted fields while also advancing scientific discovery. |
| Keywords: | federal research funding, higher education, STEM, major choice, innovation |
| JEL: | H52 I23 I28 O31 O38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12811 |
| By: | Radoslaw Stefanski (University of St Andrews; University of Stavanger) |
| Abstract: | Long-run growth is driven by new ideas, yet the cultural environment shaping their production is difficult to measure over time. We use large language models to read 23, 000 books from the Western canon and score whether each endorses, rejects, or merely depicts six dimensions of culture. We accumulate the scores into inherited stocks and summarize them with an Innovation Wedge measuring cultural resistance to new ideas. Between 1000 and 1920 the wedge falls by 51 percent. Blinded expert readings and modern surveys validate the measure. An independent 5, 000-book archive reproduces the decline. In a calibrated semi-endogenous growth model, the falling wedge raises 1920 productivity to 1.78 times its counterfactual level, explains two-thirds of the first sustained acceleration in productivity growth between 1500 and 1700, and accounts for 38.7 percent of productivity growth in 1920. |
| Keywords: | culture and growth; ideas production; growth accounting; innovation barriers; text as data |
| JEL: | O41 O31 N13 Z10 |
| Date: | 2026–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:san:econdp:2602 |
| By: | Asia Guerreschi (Sustainability Environmental Economics and Dynamic Studies (SEEDS); Department of Economics and Management, University of Ferrara); Corentin Tenailleau (HEC Paris, Sustainability and Organizations Institute (S&O); École Nationale des Ponts et Chaussées, Department of City, Environment, Transportation); Fernando J. Díaz López (Sustainability Environmental Economics and Dynamic Studies (SEEDS); HEC Paris, Sustainability and Organizations Institute (S&O); Department of Industrial Engineering, Stellenbosch University) |
| Abstract: | Climate adaptation and resilience are increasingly important dimensions of corporate sustainability and R&D strategies, yet management and economics research remains largely focused on climate mitigation and decarbonisation. This paper develops an exploratory framework linking business model innovation, organisational resilience and climate adaptation through the lens of dynamic capabilities. Using a multiple case study of three France-based logistics and transportation firms (CMA CGM, Getlink and Sogaris), the study examines how firm-level micro-foundations of dynamic capabilities contribute to anticipating, absorbing, adapting to and transforming in response to climate change. Findings suggest that climate resilience capabilities are emerging but remain unevenly developed across firms, with sensing and seizing capabilities more mature than reconfiguration and innovation capabilities. The paper proposes an initial conceptual framework (CLIMB Framework) and identifies avenues for future theoretical and empirical research on climate resilience innovation. |
| Keywords: | Climate adaptation; Climate resilience; Dynamic capabilities; Business model innovation; Corporate resilience; Climate innovation |
| JEL: | D81 Q54 Q55 Q56 O32 O39 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:1226 |