|
on Innovation |
| By: | Evgenidis Anastasios; Fasianos Apostolos; Papapanagiotou George; Lazarou Nicholas Joseph (European Commission - JRC) |
| Abstract: | Recent advances in Artificial Intelligence (AI) and the growing role of these technologies in enhancing productivity have attracted significant research and policy attention, yet the determinants of AI innovation remain relatively understudied. This study contributes to this emerging literature by examining the role of public R&D spending in fostering AI-related innovation across EU regions. Our analysis draws on bibliographic information from all patents registered at the European Patent Office (EPO) between 1980 and 2023. Using textual analysis of patent abstracts, we identify the share of AI patents among total patents and construct a novel dataset that allocates AI patents to NUTS-2 regions based on inventor addresses. This regional mapping enables us to assess the impact of public R&D funding on AI innovation while addressing endogeneity concerns by instrumenting regional public R&D spending with national defence-related R&D expenditure. The results show that public R&D plays a significant role in driving AI innovation: a 1% increase in public R&D spending raises AI patent output by approximately 0.27%. These findings speak directly to Europe’s innovation policy framework, providing evidence that public investment remains a powerful lever for stimulating AI development. They also reinforce the rationale for sustained funding under Horizon Europe, the Digital Europe Programme, and national innovation strategies aimed at building technological and reducing regional disparities in AI advancement. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:termod:202512 |
| By: | Yueyuan Ma |
| Abstract: | Using firm-level data from the US Census Longitudinal Business Database (LBD), this paper exhibits novel evidence about a wave of specialization experienced by US firms in the 1980s and 1990s. Specifically: (i) Firms, especially innovating ones, decreased production scope, i.e., the number of industries in which they produce. (ii) Innovation and production separated, with small firms specializing in innovation and large firms in production. Higher patent trading efficiency and stronger patent protection are proposed to explain these phenomena. An endogenous growth model is developed with potential mismatches between innovation and production. Calibrating the model suggests that increased trading efficiency and better patent protection can explain 20% of the observed production scope decrease and 108% of the innovation and production separation. They result in a 0.64 percent point increase in the annual economic growth rate. Empirical analyses provide evidence of causality from pro-patent reforms in the 1980s to the two specialization patterns. |
| Keywords: | specialization, production scope, R&D, intellectual property rights, patent trade, endogenous growth |
| JEL: | E23 L22 O32 O34 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-77 |
| By: | Albora Giambattista (European Commission - JRC); Benoit Florence; Caldarola Bernardo (European Commission - JRC); Di Girolamo Valentina; Diodato Dario (European Commission - JRC); Napolitano Lorenzo (European Commission - JRC); Sciarra Carla (European Commission - JRC) |
| Abstract: | Over the past 25 years, the world has witnessed a significant surge in patenting activity, underscoring the crucial role of frontier technologies in driving economic growth and competitiveness. While the EU remains a leading global innovator, its competitive edge is under threat. To address this challenge, the EU must create a vibrant industrial ecosystem that nurtures innovation. Advanced Materials, with their potential to transform industries and enable breakthrough innovations, are a crucial component of this ecosystem, and offer a unique opportunity to strengthen the EU's economic growth, competitiveness, strategic autonomy, and digital and green transformation. This report is intended to lend support to the implementation of EU policies aimed at revitalising the EU economy – such as the forthcoming Advanced Materials Act – by identifying areas where Europe can enhance its technological leadership. The analysis is grounded in the Economic Complexity approach, which provides a framework to analyse the existing technological capabilities of the EU, and to identify untapped diversification opportunities for the Member States and their regions. The results of this report suggest that the EU leadership in many traditional technologies is threatened by rising innovation activities by its main competitors, mainly China and the US. To close its innovation gap, the EU can leverage its existing capabilities to enhance competitiveness in Advanced Materials, particularly in areas such as Biomaterials, Glass, and Cements. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc144431 |
| By: | Sciarra Carla (European Commission - JRC); Caldarola Bernardo (European Commission - JRC); Domnick Clemens (European Commission - JRC); Hervas Fernando (European Commission - JRC) |
| Abstract: | This policy brief provides a digest of the scientific evidence and policy implications of the European Commission’s Conference on Corporate R&D and Innovation (CONCORDi 2025), which took place in Seville on 24-26 September 2025. The conference focused on strategic technologies, industrial policies, economic competitiveness, and sustainability, and it featured 63 academic presentations, 2 keynote talks, 2 policy round tables, 4 policy special sessions, and a science-for-policy debate. The conference highlighted the role of strategic technologies, such as AI, in helping Europe overcome the mid-tech trap, while also addressing their heterogeneous effects on labor markets. It emphasised the necessity for Europe to avoid low-productivity R&D and the importance of large R&D investors in driving higher returns through riskier and higher quality projects. This policy brief underscores the significance of supporting universities and public research centers in long-term research and fostering collaboration with firms. It addresses the incompleteness of the EU single market and calls for more capital market policies and integration efforts to remove barriers preventing firm growth. The integration of green and digital strategies is identified as essential for sustainable innovation, requiring complementary investments and institutional support. The brief discusses the importance of tailored industrial policies with directionality to accelerate transitions and strengthen technological sovereignty while minimizing negative side effects. The brief concludes by remarking that further research is needed to understand the enabling conditions for strategic technologies and to improve the measurement of policy impacts, ensuring adaptive and evidence-based policymaking. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc144677 |
| By: | Giovanna Ciaffi; Matteo Deleidi; Mariana Mazzucato |
| Abstract: | This paper investigates the macroeconomic effects of public R&D investment in the US economy from 1947 to 2018, employing alternative empirical approaches based on Structural VARs, pure shocks derived from a counterfactual VAR, and Instrumental-Variable Local Projections. The analysis provides robust evidence consistent with the findings of Deleidi and Mazzucato (2021), confirming that public R&D exerts strong and persistent expansionary effects on economic activity. Examining the fiscal policy transmission mechanisms, the results indicate that public R&D generates significant crowding-in effects on private R&D, non-residential investment, and consumption, thereby supporting the existence of a Supermultiplier effect. When total public R&D is broken down into military and civil components, and pure shocks are estimated, both spending categories yield statistically similar macroeconomic effects. Finally, sub-sample analyses confirm our findings and show that the magnitude of public R&D multipliers remains broadly comparable over time. Overall, the findings highlight the macroeconomic importance of public R&D as an effective tool for sustaining long-term economic growth. |
| Keywords: | Public R&D; Fiscal multipliers; Mission-Oriented Innovation policy; Structural VAR; Local projections |
| JEL: | C32 E11 E62 O30 O25 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:imk:fmmpap:122-2026 |
| By: | Nindl Elisabeth (European Commission - JRC); Napolitano Lorenzo (European Commission - JRC); Confraria Hugo (European Commission - JRC); Rentocchini Francesco (European Commission - JRC); Fako Peter (European Commission - JRC); Ince Ela (European Commission - JRC); Georgakaki Aliki (European Commission - JRC); Gavigan James (European Commission - JRC); Tuebke Alexander (European Commission - JRC) |
| Abstract: | The 2025 edition of ‘The EU Industrial R&D Investment Scoreboard’ monitors and analyses industrial research and development (R&D) investment trends in the context of the EU’s 3% of GDP R&D investment policy target and the related policy initiatives by the Competitiveness Compass. The 2025 Scoreboard analyses the world's top 2 000 industrial R&D investors, responsible for over 90% of R&D performed by the business sector globally, based on the financial information in the latest published audited accounts of firms. Following the introduction, chapter 2 analyses the main global trends and benchmarks the EU’s top R&D investing companies against global competitors. Chapter 3 provides details by sector, and chapter 4 does a deep-dive on a subsample of the EU’s top 800 R&D investing firms. Chapter 5 analyses R&D internationalisation and chapter 6 key green technologies. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc144638 |