nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2007‒07‒07
twelve papers chosen by
Emanuele Canegrati
Catholic University of the Sacred Heart

  1. Measuring a Society’s Knowledge Base By Khumalo, Bhekuzulu
  2. Knowledge Flows, Patent Citations and the Impact of Science on Technology By Verspagen, Bart; Nomaler, Onder
  3. Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship By Vesa Kanniainen; Panu Poutvaara
  4. Productivity Growth, Knowledge Flows and Spillovers By Gustavo Crespi; Chiara Criscuolo; Jonathan Haskel; Matthew Slaughter
  5. Business services and the changing structure of European economic growth By Kox, Henk L.M.; Rubalcaba, Luis
  6. The Innovation System of Norwegian Aquacultured Salmonids By Heidi Wiig Aslesen
  7. Open Source Software and Economic Growth: A Classical Division of Labor Perspective By Garzarelli, Giampaolo; Limam, Yasmina Reem; Thomassen, Bjørn
  8. Innovation and production in the Norwegian aluminium industry By Svein Erik Moen
  9. Technological Spillovers and Productivity in Italian Manufacturing Firms By Claudio A. Piga; Giuseppe Medda
  10. Accounting: A General Commentary on an Empirical Science By Salvary, Stanley C. W.
  11. Beyond clusters: Fostering innovation through a differentiated and combined network approach By Evert-Jan Visser; Oedzge Atzema
  12. Creative destruction in a model of competitive innovation By Staley, Mark

  1. By: Khumalo, Bhekuzulu
    Abstract: The quest to measure knowledge effectively will in no doubt lead to better knowledge policies of governments around the world in both developing and developed countries. This paper endeavours to seta sound theoretical base for measuring knowledge and does this by demonstrating that existing tools used by economists for measuring knowledge are largely self contradictory, they contradict existing theory. Knowledge to be measured effectively we must give knowledge its own units like weight and length have their own units, only then can we say how much knowledge one needs to carry out a particular task.
    Keywords: knowl; knowledge
    JEL: B41 O2 A1
    Date: 2006–10–09
  2. By: Verspagen, Bart (Eindhoven University of Technology); Nomaler, Onder (Eindhoven University of Technology)
    Abstract: Technological innovation depends on knowledge developed by scientific research. The num-ber of citations made in patents to the scientific literature has been suggested as an indicator of this process of transfer of knowledge from science to technology. We provide an intersec-toral insight into this indicator, by breaking down patent citations into a sector-to-sector ma-trix of knowledge flows. We then propose a method to analyze this matrix and construct vari-ous indicators of science intensity of sectors, and the pervasiveness of knowledge flows. Our results indicate that the traditional measure of the number of citations to science literature per patent captures important aspects intersectoral knowledge flows, but that other aspects are not captured. In particular, we show that high science intensity implies that sectors are net suppli-ers of knowledge in the economic sector, but that science intensity does not say much about pervasiveness of either knowledge use or knowledge supply by sectors. We argue that these results are related to the specific and specialized nature of knowledge.
    Keywords: Knowledge, Input-Output Analysis, Knowledge Flow Matrices, Science-to-Technology Transfer, Patents
    JEL: D83 C67 O33
    Date: 2007
  3. By: Vesa Kanniainen (University of Helsinki); Panu Poutvaara (University of Helsinki and IZA)
    Abstract: This paper identifies several distortions which create barriers to entrepreneurship. First, in addition to the innate entry cost, there are entry costs caused by regulation. Second, union wage policies raise the opportunity cost of entrepreneurship. Third, inefficiencies in the transmission of tacit knowledge between generations of entrepreneurs can arise: with access to within-family ownership transfer, the outside market for entrepreneurship operates as a lemon’s market. This problem becomes relevant when the economic life of a business idea exceeds the active life of an entrepreneur.
    Keywords: barriers to entrepreneurship, tacit knowledge, occupational choice
    JEL: J24 H25
    Date: 2007–06
  4. By: Gustavo Crespi; Chiara Criscuolo; Jonathan Haskel; Matthew Slaughter
    Abstract: This paper explores the role of knowledge flows and TFP growth by using direct survey data onknowledge flows linked to firm-level TFP growth data. Our knowledge flow data correspond to thekind of information flows often argued, especially by policy-makers, as important, such as within thefirm, or from suppliers, purchasers, universities and competitors. We examine three questions (a)What is the source of knowledge flows? (b) To what extent do such flows contribute to productivitygrowth? (c) Do such flows constitute a spillover flow of free knowledge? Our evidence show that themain sources of knowledge are competitors; suppliers; plants that belong to the same group anduniversities. We conclude that the main "free" information flow spillover is from competitors and thatmulti-national presence may be a proximate source of this spillover.
    Keywords: business services, structural change, economic growth, productivity
    JEL: O11 M2
    Date: 2007–04
  5. By: Kox, Henk L.M.; Rubalcaba, Luis
    Abstract: A pervasive trend that characterised the past two decades of European economic growth is that the share in the economy of commercial services, and particularly business services, grows monotonically, and this mainly to the expense of the manufacturing sector. The structural shift reflects a changing and increasingly complex social division of labour between economic sectors. The fabric of inter-industry relations is being woven in a new way due to the growing specialisation in knowledge services, the exploitation of scale economies for human capital, lowered costs of outsourcing in-house services, and the growing encapsulation of manufacturing products in a ‘service jacket’. Business services, which inter alia includes the software industry and other knowledge-intensive business services (KIBS), play a key role in many of these processes. We argue that in recent decades business services contributed heavily to European economic growth, in terms of employment, productivity and innovation. A direct growth contribution stems from the business-services sector’s own remarkably fast growth, while an indirect growth contribution was caused by the positive knowledge and productivity spill-overs from business services to other industries. The spill-overs come in three forms: from original innovations, from speeding up knowledge diffusion, and from the reduction of human capital indivisibilities at firm level. The external supply of knowledge and skill inputs exploits positive external scale economies and reduces the role of internal (firm-level) scale (dis)economies associated with these inputs. The relatively low productivity growth that characterises some business-services sectors may be a drag on the sector's direct contribution to overall economic growth. The paper argues that there is no reason to expect a “Baumol disease” effect as long as the productivity and growth spill-overs from KIBS to other economic sectors are large enough. Finally, the paper pinpoints some policy 'handles' that could be instrumental in boosting the future contribution of business services to overall European economic growth.
    Keywords: economic growth; human capital; specialisation; business services; Europe
    JEL: L8 O52 O4 O3
    Date: 2007–07
  6. By: Heidi Wiig Aslesen (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research)
    Abstract: This paper is about one of the most important export products in Norway, “Norwegian salmon”, focusing especially on the innovation system of aquaculture of salmon and trout in Norway, the aim of the paper is to describe the sector in a national and global context, for thereafter highlight in particular how different aquaculture firms operate and carry out innovation by looking at what kind of external relations and interactive learning processes are involved in innovation, and as such suggesting input to policy makers on how to strengthen the sectoral innovation system, a sector with the potential to become even more knowledge intensive and innovative than today. By differentiating aquaculture according to knowledge base and degree of structured and functionally differentiated organisations, the empirical material presented in this paper shows that aquaculture firms have very different approaches to innovation; from antiinnovation strategies to strategies of being in the fore-front of innovation in the industry. The empirical material has shown that firms with very operative innovation systems exists side-by-side and the overall functioning of the sectoral innovation system of aquaculture is influenced by all the different layers of firm types.
    Date: 2007–07
  7. By: Garzarelli, Giampaolo; Limam, Yasmina Reem; Thomassen, Bjørn
    Abstract: The article turns to classical economic insights on the division of labor and to institutional reasoning to identify some costs and benefits of Open Source Software (OSS) and proprietary software production. It suggests that, thanks to its licenses, OSS favors market expansion more than proprietary software does by tapping into spontaneous work input. The spontaneous tapping leads to a division of labor that exhibits what the article calls redundant economies. By generating a circle of knowledge growth, reuse, and sharing, redundant economies lead to increasing returns, which are crucial for economic growth.
    Keywords: Division of Labor; Extent of the Market; Increasing Returns; Institutions; Knowledge; Open Source Software; Redundant Economies.
    JEL: O34 D20 O33 L23 L17
    Date: 2007–06–22
  8. By: Svein Erik Moen (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: The paper analyses the path of the Norwegian primary aluminium industry. From the industry’s initiation in 1908 it has relied upon the close interaction with foreign aluminium MNEs with regard to knowledge, technological innovation and market access. After 1945 it has also been strongly supported by Norwegian institutions. The case gives important insights to the innovation system literature regarding how the drivers of innovation are influenced by the interaction between the national and the sectoral level; this also necessitates an international perspective of the industry’s innovation and production system. The character of these linkages has change through time.
    Date: 2007–07
  9. By: Claudio A. Piga (Dept of Economics, Loughborough University); Giuseppe Medda (DEIR, University of Sassari, Italy.)
    Abstract: We study whether a firm’s total factor productivity dynamics is positively influenced by its own R&D activity and by the technological spillovers generated at the intra- and inter-sectorial level. Our approach corrects simultaneously for the endogeneity and the selectivity biases introduced by the use of a firm’s own R&D as a regressor. A firm’s involvement in R&D activities accounts for significant productivity gains. Firms also benefit from spillovers originating from their own industries, as well as from innovative upstream sectors.
    Keywords: R&D, TFP, selectivity, treatment effect
    JEL: C21 C80 D24 O30
    Date: 2007–07
  10. By: Salvary, Stanley C. W.
    Abstract: Many researchers have questioned the view of accounting as a science. Some maintain that it is a service activity rather than a science, yet others entertain the view that it is an art or merely a technology. While it is true that accounting provides a service and is a technology (a methodology for recording and reporting), that fact does not prevent accounting from being a science. Based upon the structure and knowledge base of the discipline, this paper presents the case for accounting as an empirical science.
    Keywords: national accounting and organizational accounting; risk-sharing arrangements; management of time and other resources; monetization of the economy; command over goods and services; extrinsic value and intrinsic value; commodity money and paper/nominal money; money in relation to credit; the firm and long range planning; market value versus committed finance; explanation and prediction; expectations and uncertainty.
    JEL: M41
    Date: 2007–06–28
  11. By: Evert-Jan Visser; Oedzge Atzema
    Abstract: Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.
    Keywords: innovation policy, clusters, networks, governance, regionalization
    JEL: R11 R58 O12 O31 O38
    Date: 2007–06
  12. By: Staley, Mark
    Abstract: This paper presents a scale-invariant model of endogenous growth built on the premise that delays in the diffusion of technologies allow innovators to capture temporary rents. The economy consists of two sectors: a final goods sector that follows constant returns to scale, and an innovative capital sector consisting of a large number of price-taking firms that make incremental improvements to embodied technologies. The model has the property that as one increases the rate of diffusion of innovations, the growth rate of the economy increases even though the level of R&D spending decreases. A process of selection, mathematically similar to Darwinian selection, drives both the diffusion of innovations and the accumulation of capital. The paper shows that by reversing the roles of capital and labour the model can also be used to describe the pre-industrial economy.
    Keywords: creative destruction; competitive innovation; endogenous growth; Schumpeterian; selection; Darwinism; diffusion
    JEL: O40 O30 N00
    Date: 2007–07–02

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