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on Innovation |
| By: | Cassiman, Bruno (IESE Business School); Guardo, Chiara di (University of Cagliari); Valentini, Giovanni (IESE Business School) |
| Abstract: | We explore how R&D project characteristics condition the governance of an R&D project and its individual activities. Prior literature has tried to understand the factors - both at the industry and at the firm level - that influence the way in which firms partner for innovation. In this paper, through the analysis of detailed data from a subsidiary of STMicroelectronics, we identify the main drivers of partner selection for innovation. Partnering or contracting with universities for innovation is common practice for developing new -original- knowledge, as opposed to applying existing knowledge to a problem. But firms are more reluctant to partner, especially with other firms, when that knowledge directly enhances their competitiveness. However, conditional on cooperation, partners are more likely to act individually when the project is strategically important. Contracting for innovation to universities or research centers, as opposed to partnering, happens for more experimental projects, where highly original knowledge is developed, and typically early on in the project. |
| Keywords: | Innovation strategy; Technological innovation; R&D projects' organization; Partner selection; |
| Date: | 2005–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0597&r=ino |
| By: | Juha Kilponen (Bank of Finland); Torsten Santavirta (University of Helsinki) |
| Abstract: | In this study we provide a theoretical prediction of a complementary relationship between the incentive effects of product market competition and R&D subsidies using the theory of Aghion et. al (1997, 2001). The complementarity relationship and that of an inverted U-relationship is then tested using a large Finnish firm level data set combined with patent and patent citations of the firms. Econometric analysis shows that the inverted U-relationship is fairly robust to different innovation measures derived from patent data. We also find that the inverted-U relationship tends to be steeper when also R&D subsidies are considered. This result suggests that there exists a complementarity between competition and R&D subsidies. |
| Keywords: | Product market competition, Innovations, R&D subsidies |
| JEL: | L |
| Date: | 2005–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0509009&r=ino |
| By: | Cassiman, Bruno (IESE Business School); Guardo, Chiara di (University of Cagliari); Valentini, Giovanni (IESE Business School) |
| Abstract: | Faster technological development, shorter product life-cycles, and more intense global competition have transformed the current competitive environment for most firms. This new competitive landscape forces organizations to actively acquire knowledge, as a firm's competitive advantage is now more dependent on continuous knowledge development and enhancement. Therefore, knowledge has become a central theme in strategic management. Against this background, we argue that the knowledge characteristics of R&D projects are fundamental variables to explain governance decisions. Drawing upon the case of STMicroelectronics, we provide evidence that partnering or contracting with universities for innovation is common practice for developing new -original- knowledge, as opposed to applying existing knowledge, for solving a problem. However, the firm is more reluctant to partner, especially with another firm, when this knowledge directly enhances its competitiveness. Moreover, we find that R&D project performance is a bi-dimensional construct. One dimension picks up project efficacy and immediate benefits, while the other includes learning and long-term benefits. Though spanning firm boundaries for innovation does not seem to have appreciable effects on perceived project efficiency, it nonetheless brings about intertemporal benefits related to learning and capabilities development. In a dynamic environment, building knowledge may be more important than protecting it. Thus, an open innovation process may be an exceptionally effective way to build and develop the firm's technological future. |
| Keywords: | Innovation strategy; R&D projects' organization; R&D projects' performance; open innovation; |
| Date: | 2005–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0605&r=ino |
| By: | Jeannine Horowitz Gassol |
| Abstract: | The present work discusses the effects of university culture and structure on university-business relations, focusing on knowledge transfer activities. It puts forward the thesis that when links between university and business are introduced into the university system as a turn-key proposition rather than as developmental process, the prevailing university culture and structure will exert resistance against change and will oppose the creation of appropriate structures to promote them, with deleterious effects for the university. |
| Keywords: | technology transfer, organizational development and innovation management |
| JEL: | O31 O32 O33 O57 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:826&r=ino |
| By: | Heiko A. Gerlach (University of Auckland); Thomas Rønde (Department of Economics, University of Copenhagen); Konrad Stahl (University of Mannheim) |
| Abstract: | We investigate firms’ incentives to locate in the same region to gain access to a large pool of skilled labor. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Agglomeration in a cluster is more likely in situations where the innovation step is large and the probability for a firm to be the only innovator is high. When firms cluster, they tend to invest more and take more risk in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more efficient, technically diversified portfolio of R&D projects at the industry level. |
| JEL: | L13 O32 R12 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieci:2005-01&r=ino |
| By: | James G. Mulligan; Nilotpal Das (Department of Economics,University of Delaware; Department of Economics and Management, Hood College, Frederick, Maryland) |
| Abstract: | The diffusion literature implicitly assumes that a technological innovation remains homogeneous throughout the time period of the study with the sole modification being an assumed reduction in the real price of the technology over time. We argue that the technology can change in significant ways from one vintage to another to alter the nature of the diffusion process. We support this claim with estimates from non-parametric, semi-parametric and parametric duration models for the first generation of optical scanners installed in supermarkets in the U.S. between June 1974 and March 1985. |
| Keywords: | Technological change |
| JEL: | O3 L8 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:04-06&r=ino |
| By: | Silverberg,Gerald; Verspagen,Bart (MERIT) |
| Abstract: | We extend an earlier model of innovation dynamics based on invasive percolation by adding endogenous R&D search by economically motivated firms. The {0,1} seeding of the technol-ogy lattice is now replaced by draws from a lognormal distribution for technology ‘difficulty’. Firms are rewarded for successful innovations by increases in their R&D budget. We compare two regimes. In the first, firms are fixed in a region of technology space. In the second, they can change their location by myopically comparing progress in their local neighborhoods and probabilistically moving to the region with the highest recent progress. We call this the mov-ing or self-organizational regime. We find that as the mean and standard deviation of the log-normal distribution are varied, the relative rates of aggregate innovation switches between the two regimes. The SO regime has higher innovation rates, other things being equal, for lower means or higher standard deviations of the lognormal distribution. This results holds for in-creasing size of the search radius. The clustering of firms in the SO regime grows rapidly and fluctuates in a complex way around a high value which increases with the search radius. We also investigate the size distributions of the innovations generated in each regime. In the fixed one, the distribution is approximately lognormal and certainly not fat tailed. In the SO regime, the distributions are radically different. They are much more highly right skewed and show scaling over at least two decades with a slope of almost exactly one, independently of parame-ter settings. Thus we argue that firm self-organization leads to self-organized criticality. (Keywords: innovation, percolation, search, technological change, R&D, clustering, self-organized criticality. |
| Keywords: | research and development ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005015&r=ino |
| By: | Bulut, Harun; Moschini, GianCarlo |
| Abstract: | The choice of a research path in attacking scientific and technological problems is a significant component of firms’ R&D strategy. One of the findings of the patent races literature is that, in a competitive market setting, firms’ noncooperative choices of research projects display an excessive degree of correlation, as compared to the socially optimal level. The paper revisits this question in a context in which firms have access to trade secrets, in addition to patents, to assert intellectual property rights (IPR) over their discoveries. We find that the availability of multiple IPR protection instruments can move the paths chosen by firms engaged in an R&D race toward the social optimum. |
| Keywords: | intellectual property rights, parallel R&D, patent races. |
| Date: | 2005–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12415&r=ino |
| By: | Hertog,Friso,den; Groen,Marjan; Weehuizen,Rifka (MERIT) |
| Abstract: | Health care is in need of innovation on many strands. Patient-centered care appears to be the key to the realization of the main objectives: service quality, cost reduction, access, patient satisfaction and the quality of working life. Innovation, and more precisely, the diffusion and implementation of new methods, new techniques and new processes and systems appears to be a difficult task. Consequently, there is a strong need for knowledge about innovation processes in health care and the drivers and barriers affecting these efforts. This paper presents a framework for mapping innovation processes in health care services. The framework consists of two axes: (1) the horizontal axis of the health care process and the inter-functional walls which can complicate innovation efforts, and (2) the vertical axis of the echelons of power, which often create ceilings too impermeable to permit effective learning and decision making. The study is based on the experiences gathered in Publin, a running research network supported by the Fifth Framework Program and Innoflex, which ended in 2003. |
| Keywords: | economics of technology ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005013&r=ino |
| By: | Figueiredo, Paulo N. (Brazilian School of Public and Business Administration); Vedovello, Conceição (Technological Research Institute of the State of Sao Paulo) |
| Abstract: | This paper examines empirical evidence of the technological capabilities of firms in the industrial pole of Manaus, in a developing area of northern Brazil. It also investigates the links these firms have with supporting organizations of the innovation system such as universities, research institutes or business incubators. Firms’ capabilities are classified by type and level of development, and we also identify the nature of the links between them and the supporting organizations. The paper draws on a sample of 75 organizations from Manaus: 46 firms (in two sectors: electro-electronics and motorcycle and bicycle industries, and their major suppliers) and 29 research-oriented support organizations. The evidence was collected through extensive fieldwork at both the industry- and firm-level as well as from first-hand accounts. From the study we find that all the sampled firms have progressed beyond basic operational capabilities. At the time of the fieldwork, several firms possessed a high level of innovative capabilities in diverse technological functions. Many of these firms have actively established a variety of informal, human resource-based and even research-based links with innovation supporting organizations. These findings oppose prevailing generalizations and assumptions that, as a consequence of globalization and outward-looking industrialization regimes, firms in southern Latin American economies lack technological capabilities. Furthermore our evidence does not support the view that there is a prevailing weakness in the innovation system in this region. Although this study does not explicitly examine technological development over time, we believe it offers an alternative (and more optimistic) view of the industrial reality in this developing area of Brazil. This view, which differs from existing conventional (and myopic) standpoints, could potentially support the design of more realistic industrial strategies. |
| Keywords: | Firm-level capabilities, technological capabilities, innovation systems, globalization, Latin America. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unuint:200504&r=ino |
| By: | Baalen, P.J. van; Bloemhof-Ruwaard, J.M.; Heck, E. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | This article addresses the emergence of networks of practice and the role of knowledge sharing via knowledge portals. Its focus is on factors that stimulate the successful emergence of networks of practice. Literature on knowledge management and communities of practice suggest the preexistence of shared knowledge or a shared believe system as a condition sine qua non for the networks of practice to emerge. We challenge this assumption and argue and demonstrate that common knowledge and believe systems are rather a result of knowledge sharing instead of a pre-condition. The central question is how a knowledge portal facilitates the diffusion of knowledge among rather loosely coupled and often disconnected innovation projects. Research is carried out in the agricultural industry in the Netherlands. In this industry there is a need to change from a product-oriented to a problemoriented innovation structure. The set up of a platform and knowledge portal around agro-logistics – crossing different product-oriented production clusters – was therefore a logical result. It gave the opportunity to analyze what the impact of a knowledge portal is in a situation that people and projects come from different organizations that do not know each other. Do they start to share knowledge and what are the conditions? With regard to the case study of the knowledge portal in the agricultural industry we conclude that a knowledge portal will have an impact on how projects are sharing knowledge and on the emergence of a network of practice. The results show that preconditions for the emergence of a network of practice are sense of urgency and fragmented awareness. These results also indicate the important role of a knowledge broker. The developed knowledge portal seems to lead to overcoming structural holes and a closer cognitive distance among the projects. However, we did not find a direct effect of the knowledge portal on sharing tacit knowledge. In the initial phase of a network of practice the knowledge exchange seems to focus on general, non-project specific and explicit knowledge. There was also no direct effect of the knowledge portal on the reciprocity of knowledge exchange among the projects. However, knowledge was shared between the project level and the platform and public level. Conclusions and directions for future research are formulated. |
| Keywords: | Agro-logistics, Innovation Projects, Knowledge Portal, Knowledge; |
| Date: | 2005–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30002049&r=ino |
| By: | Lence, Sergio H.; Hayes, Dermot J. |
| Abstract: | A two-country extension of an ex ante simulation model of research and development (R&D) in agriculture developed by Lence, Hayes, McCunn, Smith, and Niebur (2005) is used to analyze issues regarding intellectual property (IP) protection, spillovers, and genetic use restriction technologies (GURTs) in the context of the United States and South America soybean sectors. The model is used to examine how various IP protection levels in the United States and South America might have impacted on the level of innovation, market equilibrium and the welfare of market participants had they been in place prior to the introduction of Roundup Ready technologies. The results indicate that technology fees that are charged in the United States but not in South America are harmful to US producers. Neither producers in the United States nor US-based R&D firms have incentives to support or develop technologies such as Roundup Ready that can be easily adopted in countries with low IP protection. However, total world welfare is higher when this type of transferable R&D is conducted. Equalizing IP protection across countries gives R&D firms a strong incentive to conduct R&D of relevance to both countries. Surprisingly, the introduction of a low level of IP protection in South America does not necessarily improve expected welfare of US producers. To the extent that GURTs contribute toward IP protection harmonization, they can be world-welfare enhancing. However, the positive impact of GURTs could be greatly reduced if they increase IP protection beyond a certain level. The use of GURTs to impose IP protection in South America generally increases the expected welfare of US producers. |
| Keywords: | GURT, Roundup Ready soybeans, spillover, technology fee, welfare. |
| Date: | 2005–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12417&r=ino |
| By: | Verspagen,Bart (MERIT) |
| Abstract: | Technological change is argued to be taking place along ordered and selective pat-terns, shaped jointly by technological and scientific principles, and economic and other societal factors. Historical, descriptive analysis is often used to analyze these ''trajectories''. Recently, quantitative methods have been proposed to map these tra-jectories. It is argued that such methods have, so far, not been able to illuminate the engineering side of technological trajectories. In order to fill this gap, a methodology proposed by Hummon and Doreian (1989) is used and extended to undertake a cita-tion analysis of patents in the field of fuel cells. |
| Keywords: | research and development ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005019&r=ino |
| By: | Oyelaran-Oyeyinka, Banji (United Nations University, Institute for New Technologies); Gehl-Sampath, Padmashree (United Nations University, Institute for New Technologies) |
| Abstract: | Using field level data collected in Nigeria in 2003-2004, this paper examines the possibilities for learning through inter-organizational interactions in the country's biotechnological system of innovation, using public research institutes as an example. The paper considers inter-organizational interactions to be all forms of formal and informal linkages and contacts between various agents in the system of innovation, including firms, universities, traditional medicine practitioners, hospitals and other external agencies. Using results obtained in the survey and the experiences of other countries that have succeeded in developing biotechnological capacity, critical interactions and scope for policy interventions are discussed |
| Keywords: | Innovation, Capacity Building, Institution Building, Research, Learning, Pharmaceutical Industry, Nigeria |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unuint:200502&r=ino |
| By: | Diederen,Bert; Mohnen,Pierre; Palm ,Franz; Raymond ,Wladimir; Schim van der Loeff,Sybrand (MERIT) |
| Abstract: | This paper explores the aggregation problem and illustrates its relevance using data for the Netherlands from the third Community Innovation Survey (CIS3), and production and financial statistics. It compares the results of an innovation output equation that was estimated using data on enterprises (bedrijfseenheid), domestic enterprise clusters (onderneming), and those enterprise clusters with foreign inward or outward investments. |
| Keywords: | research and development ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005021&r=ino |
| By: | Miralles, Francesc (Universitat Pompeu Fabra); Sieber, Sandra (IESE Business School); Valor, Josep (IESE Business School) |
| Abstract: | Open Source Software (OSS) has received wide attention from the research community, analyzing both the innovation process of software development by distributed and unrelated teams, and the market dynamics at play between "free" and proprietary software. Up until now, OSS adoption has been irregular, although it seems to be breaking the dominance of existing players in some market segments. In this paper, we contend that due to the particularities of its development process, traditional ways of explaining IT adoption -rational decision making, technology diffusion models, and the psychology of the decision maker- are insufficient to explain the case of OSS diffusion. We believe that the existence of a strong and diffused development community leads to a new role of the user community, as both are intertwined. In addition, new concerns for social corporate responsibility and welfare create a new context, in which "user gangs" may exert some degrees of pressure on the IT decision maker. By analyzing some significant cases we depict under what conditions significant OSS adoption may unfold, showing that in two of the cases studied user gangs play a significant role. The resulting preliminary framework will inform future work, in which we aim at validating the emerging insights gained in this research. |
| Keywords: | Open source software; IT adoption; user communities; CIO herding; |
| Date: | 2005–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0595&r=ino |
| By: | Horst Hanusch (University of Augsburg, Department of Economics); Andreas Pyka (University of Augsburg, Department of Economics) |
| Abstract: | Within the last 25 years large progress has been made in Neo-Schumpeterian Economics, this branch of economic literature which deals with dynamic processes causing qualitative transformation of economies basically driven by the introduction of novelties in their various and multifaceted forms. By its very nature, innovation and in particular technological innovation is the most exponent and most visible form of novelty. Therefore it is not very surprising that Neo-Schumpeterian Economics today has its most prolific fields in the studies of innovation and learning behavior on the micro-level of an economy, the studies on industry dynamics on the meso-level and studies of innovation driven growth and competitiveness on the macro-level of the economy. From a general point of view, however, the future developmental potential of socio-economic systems i.e. innovation in a very broad understanding encompassing besides technological innovation also organizational, institutional and social innovation has to be considered as the normative principle of Neo-Schumpeterian Economics. In this sense, innovation plays a similar role in Neo-Schumpeterian Economics like prices do in Neoclassical Economics. Instead of allocation and efficiency within a certain set of constraints, Neo-Schumpeterian Economics is concerned with the conditions for and consequences of a removal and overcoming of these constraints limiting the scope of economic development. Thus, Neo-Schumpeterian Economics is concerned with all facets of open and uncertain developments in socio-economic systems. A comprehensive Neo-Schumpeterian approach therefore has to consider not only transformation processes going on e.g. on the industry level of an economy, but also on the public and monetary side of an economic system. Our contribution introduces those extensions and complements to a comprehensive Neo-Schumpeterian economic theory, and develops some guideposts in the sense of a roadmap for necessary strands of analysis in the future in order to fulfill the claim of becoming a comprehensive approach comparable to neoclassical theory. |
| Keywords: | Neo-Schumpeterian economics, industrial dynamics, public finance, financial markets |
| JEL: | O30 O40 L2 P0 G10 B52 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0278&r=ino |
| By: | Gino Gancia; Fabrizio Zilibotti |
| Abstract: | We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the “labequipment” model, labor-for-intermediates” and “directed technical change”. We review applications of the expanding variety framework to the analysis of international technology diffusion, trade, cross-country productivity differences, financial development and fluctuations. In many such applications, a key role is played by complementarities in the process of innovation. |
| Keywords: | appropriate technology, complementarity, cycles, convergence, directed technical change, endogenous growth, expanding variety, financial development,imperfect competition, integration, innovation |
| JEL: | D92 E32 F12 F15 F43 G22 O11 O16 O31 O33 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:831&r=ino |
| By: | Parto,Saeed; Ciarli,Tommaso; Arora,S. . (MERIT) |
| Abstract: | Development and growth are products of the interplay and interaction among heterogeneous actors operating in specific institutional settings. There is a much alluded-to, but under-investigated, link between economic growth, innovation systems, and institutions. There is widespread agreement among most economists on the positive reinforcing link between innovation and growth. However, the importance of institutions as catalysts in this link has not been adequately examined. The concept of innovation systems has the potential to fill this gap. But these studies have not conducted in-depth institutional analyses or focussed on institutional transformation processes, thereby failing to link growth theory to the substantive institutional tradition in economics. In this paper we draw attention to the main shortcomings of orthodox and heterodox growth theories, some of which have been addressed by the more descriptive literature on innovation systems. Critical overviews of the literatures on growth and innovation systems are used as a foundation to propose a new perspective on the role of institutions and a framework for conducting institutional analysis using a multi-dimensional typology of institutions. The framework is then applied to cases of Taiwan and South Korea to highlight the instrumental role played by institutions in facilitating and curtailing economic development and growth. |
| Keywords: | economics of technology ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005020&r=ino |
| By: | Borghans,Lex; Weel ,Bas ,ter (MERIT) |
| Abstract: | The model developed in this paper explains differences in the division of labour across firms as a result of computer technology adoption. We find that changes in the division of labour can result both from reduced production time and from improved communication possibilities. The first shifts the division of labour towards a more generic structure, while the latter enhances specialisation. Although there exists heterogeneity, our estimates for a representative sample of Dutch establishments in the period 1990-1996 suggest that productivity gains have been the main determinant for shifts in the division of labour within most firms. These productivity gains have induced skill upgrading, while in firms gaining mainly from improved communication possibilities specialisation increased and skill requirements have fallen. |
| Keywords: | labour economics ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005022&r=ino |
| By: | Darius Lakdawalla; Neeraj Sood |
| Abstract: | Innovation policy often involves an uncomfortable trade-off between rewarding innovators sufficiently and providing the innovation at the lowest possible price. However, in health care markets with insurance for innovative goods, society may be able to ensure efficient rewards for inventors and the efficient dissemination of inventions. Health insurance resembles a two-part pricing contract in which a group of consumers pay an up-front fee ex ante in exchange for a fixed unit price ex post. This functions as if innovators themselves wrote efficient two-part pricing contracts, where they extracted sufficient profits from the ex ante payment, but still sold the good ex post at marginal cost. As a result, we show that complete, efficient, and competitive health insurance for innovative products - such as new drugs, medical devices, or patented procedures - can lead to perfectly efficient innovation and utilization, even when moral hazard exists. Conversely, incomplete insurance markets in this context lead to inefficiently low levels of innovation. Moreover, optimally designed public health insurance for innovative products can solve the innovation problem by charging ex ante premia equal to consumer surplus, and ex post co-payments at or below marginal cost. When these quantities are unknown, society can usually improve static and dynamic welfare by covering the uninsured with contracts that mimic observed private insurance contracts. |
| JEL: | I1 O3 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11602&r=ino |
| By: | Paola Giuri; Myriam Mariani; Stefano Brusoni; Gustavo Crespi; Dominique Francoz; Alfonso Gambardella; Walter Garcia-Fontes; Aldo Geuna; Raul Gonzales; Dietmar Harhoff; Karin Hoisl; Christian Lebas; Alessandra Luzzi; Laura Magazzini; Lionel Nesta; Önder Nomaler; Neus Palomeras; Pari Patel; Marzia Romanelli; Bart Verspagen |
| Abstract: | By drawing information from a survey of inventors of 9,017 European patents (PatVal-EU), this paper provides novel and detailed data about the characteristics of the European inventors, the sources of their knowledge, the importance of formal and informal collaborations among researchers and institutions, the motivations to invent, and the actual use and economic value of the patents. This is important information as the unavailability of direct indicators has limited the scope and depth of the empirical studies on innovation. |
| Date: | 2005–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2005/20&r=ino |
| By: | Dolfsma, W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Services constitute a major part of the economy, and, contrary to popular believe, service firms do innovate. In this paper I take a closer look at one aspect of innovation in services: appropriability. I discuss the different elements that are possibly of importance for appropriability, and discuss one element in more detail. Reputation has been argued to be decisive when service firms try to appropriate the benefits of their innovative activity. In this paper, some suggestions are brought forward that will be useful in thinking systematically about reputationshaping mechanisms. |
| Keywords: | Innovation;services;appropriability;reputation; |
| Date: | 2005–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30002106&r=ino |
| By: | Criscuolo,Paola; Verspagen ,Bart (MERIT) |
| Abstract: | This paper investigates whether the distinction between patent citations added by the inventor or the examiner is relevant for the issue of geographical concentration of knowledge flows (as embodied in citations). The distinction between inventor and examiner citations enables us to work with a more refined citation indicator of knowledge flows. We use information in the search reports of patent examiners at the European Patent Office to construct our dataset of regional patenting in Europe, and apply various econometric models to investigate our research question. The findings point to a significant localization effect of inventor citations, after controlling for various other factors, and hence suggest that knowledge flows are indeed geographically concentrated. This holds true also for a sub-sample of patents owned by 169 large multinational enterprises (MNEs). The results for the sample of MNEs suggest that multinational firms seek out specific regional knowledge specializations (and hence at least partly reinforce geographical concentration), but are also able to transfer knowledge "easier" over larger distances. |
| Keywords: | research and development ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005017&r=ino |
| By: | Bosch, F.A.J. van den; Baaij, M.G.; Volberda, H.W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Research evidence confirms that the accumulation of knowledge contributes to the competitive advantage of firms. In the strategy consulting industry, one of the most knowledge-intensive professional services industries, however, established firms that exploited their knowledge accumulation by adding exploitative consulting practices have found their performance has deteriorated. To investigate this phenomenon, this paper will describe how the increasing share of exploitative practices in the strategy consulting industry has attracted both established ICT-related consulting firms and new entrants, and enabled clients to expand their problem-solving abilities. We will argue that these developments in terms of competitiveness and client competencies have reduced the attractiveness of exploitative practices for established strategy consulting firms. To analyse these developments and to provide strategic options for the established strategy consulting firms, a conceptual framework will be proposed. Based on this framework, three strategic option are identified: ‘Follow the herd’, ‘Become ambidextrous’ and ‘Back to the original focus.’ In summarizing our argument, we highlight the pros and cons of these options and the implications for top management. |
| Keywords: | Strategy Consulting;Knowledge;Exploitation and Exploration;Ambidextrous Organization; |
| Date: | 2005–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30002192&r=ino |
| By: | Vicente Ortún; Jaume Puig; María Callejón |
| Abstract: | This article tries to reconcile economic-industrial policy with health policy when dealing with biomedical innovation and welfare state sustainability. Better health accounts for an increasingly large proportion of welfare improvements. Explanation is given to the welfare losses coming from the fact than industrial and health policy tend to ignore each other. Drug’s prices reflecting their relative relative effectiveness send the right signal to the industry –rewarding innovation with impact on quantity and quality of life- and to the buyers of health care services. The level of drug’s public reimbursement indicates the social willingness to pay of the different national health systems, not only by means of inclusion, or rejection, in the basket of services covered, but especially establishing the proportion of the price that is going to be financed publicly. Reference pricing for therapeutic equivalents –as the upper limit of the social willingness to pay- and two-tiered co-payments for users (avoidable and inversely related with the incremental effectiveness of de drug) are deemed appropriate for those countries concerned at the same time with increasing their productivity and maintaining its welfare state. Profits drive R&D but not its location. There is no intrinsic contradiction between high productivity and a consolidated National Health Service (welfare state) as the European Nordic Countries are telling us every day. |
| Keywords: | Biomedical R&D, Industrial Policy, Drug's Price Regulation, Health Policy, Welfare State, Health Economics |
| JEL: | I11 I18 L51 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:807&r=ino |
| By: | Paloma Fernández Pérez (Universitat de Barcelona) |
| Abstract: | Capital intensive industries in specialized niches of production have constituted solid ground for family firms in Spain , as evidenced by the experience of the iron and steel wire industries between 1870 and 2000. The embeddedness of these firms in their local and regional environments have allowed the creation of networks that, together with favourable institutional conditions, significantly explain the dominance of family entrepreneurship in iron and steel wire manufacturing in Spain, until the end of the 20 th century. Dominance of family firms at the regional level has not been not an obstacle for innovation in wire manufacturing in Spain, which has taken place even when institutional conditions blocked innovation and traditional networking. Therefore, economic theories about the difficulties dynastic family firms may have to perform appropriately in science-based industries must be questioned. |
| Keywords: | Family Firms, Steel Wire Industries, Spanish Economic History |
| JEL: | N63 N64 N83 N84 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2005141&r=ino |
| By: | Davila, Toni (IESE Business School); Foster, George (Stanford University); Li, Mu (Applied Micro Devices) |
| Abstract: | Management control systems can hinder innovation. However, recent theoretical and empirical work indicates that these systems can also enhance it. Using two sequential empirical studies, this paper investigates this question. The first uses a field research design to examine the adoption of management control systems in the product development function of entrepreneurial firms. The data comes from questionnaires and interviews with the CEOs, financial officers, and business development managers of 69 firms. Analysis of the qualitative data indicates that managers adopt these systems not so much to fulfill a particular role as to solve particular needs that they face. These needs range from external contracting and legitimizing the process with external parties to internal drivers such as managers' background, learning by doing, need to focus, or reaction to problems. Furthermore, these reasons are associated with faster adoption of these systems and with product development performance. The objective of the second study is to extend and generalize the finding regarding the influence of external parties on management control system adoption to a population of mature firms. Using a survey design, the study finds an association between the importance of partners to product development and the level of formalization of management control systems. |
| Keywords: | management control systems; product development; innovation; |
| Date: | 2005–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0598&r=ino |
| By: | Vallejo, Bertha (United Nations University, Institute for New Technologies) |
| Abstract: | The study presented in this paper describes preliminary findings on changes in the adoption of different learning mechanisms before and after the implementation of the North American Free Trade Agreement (NAFTA), based on a study of 193 Mexican automotive firms. The results obtained give us useful insights on the composition and capability levels of the sector as well as highlighting changes in the research and development (R&D) capacity of these firms under the new competitive market conditions. The study is based on firm-level panel data from the automotive industry obtained from the National Survey on Employment, Salaries, Technology and Training (ENESTyC) carried out by the National Statistics Office and the Ministry of Labour for the years 1991, 1994, 1998 and 2000. It presents a descriptive analysis of quantitative measures taken by firms with regards to learning, and focuses on changes in learning trends owing to different market conditions brought about by NAFTA. The analysis is complemented by a multivariate probit model that tests the relationship between critical firm-level variables and a firm’s probability of conducting R&D activities, training staff, acquiring technological packages and/or receiving technology transfers from their headquarters, or procuring machinery and equipment. The empirical analysis highlights important associations between different kinds of learning mechanisms adopted by firms and their own critical characteristics. The study shows that of all the learning mechanisms available to firms, training is the one most commonly used in the sector – and it is on the increase. However, the results also indicate that training is mainly given to those who operate specific machines or technologies, and does not go towards helping firms develop the absorptive capacity they need if they are to move towards newer and more complex technologies and market changes. This may imply that the automotive sector is moving towards a lower level of dynamic learning, concentrating on day-to-day operational activities with a tendency to import knowledge from foreign countries. On the other hand there may be more competition since the implementation of NAFTA, which requires firms to conduct training simply in order to maintain their operational level rather than to upgrade their capabilities. The results obtained in this study provide useful insights and lessons that go beyond the Mexican context and that may be useful for other manufacturing sectors in developing countries. |
| Keywords: | Learning, capability building, technology transfer, automotive industry, NAFTA, Mexico |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unuint:200505&r=ino |
| By: | David C. Maré (Motu Economic & Public Policy Research) |
| Abstract: | Endogenous growth theory is one of the mainstream economics approaches to modelling economic growth. This paper provides a non-technical overview of some key strands of the endogenous growth theory (EGT) literature, providing references to key articles and texts. The intended audience is policy analysts who want to understand the intuition behind EGT models. The paper should be accessible to someone without much economics training. |
| Keywords: | Endogenous Growth, Innovation |
| JEL: | O31 O40 |
| Date: | 2005–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0509012&r=ino |
| By: | Pennings,Jacqueline; Kranenburg,Hans,van; Hagedoorn,John (METEOR) |
| Abstract: | The telecommunications industry has experienced a series of dramatic changes since itsinception in the 1880s. Due to the latest liberalization and privatization wave in the world, the telecommunications industry has turned into a dynamic environment and is rapidly growing.In addition, the New Economy emerged and brought new technological developments in the1990s. They have stimulated the convergence of previously distinct industries such as thetelecommunications, information technology, entertainment, media, and consumerelectronics, into the so-called multimedia information industry. This study discusses the (de)regulation actions and their implications on the telecommunications industry as of its beginning. Furthermore, this study also presents a general overview of major trends in inter-firm partnerships and M&As in the telecommunications industry since 1985, examining both the general developments and the distribution according to internationalization and industries. We find that the overall trends demonstrated an increase in importance of inter-firm partnerships and M&As over time. Another significant finding is the increase in importance of other industries. In relative terms, the growth of M&As and alliances with partners outside the telecommunications industry superseded the increase in the number of M&A’s and alliances within the industry. |
| Keywords: | Strategy; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2005015&r=ino |
| By: | Lars Frederiksen; Silvia rita Sedita |
| Abstract: | This paper adds new knowledge to the phenomenon of transferring embodied knowledge through labor mobility by means of a comparative study of the entertainment and manufacturing industries. Explorative in nature, the paper takes advantage of unique data on the Danish labor market (i.e. IDA) to investigate labor mobility patterns for the two selected industries and to detect internal differences within industry segments and regarding creative intensive and invention activities in particular. We use the music industry as a proxy for the entertainment industries. |
| Keywords: | Embodied knowledge transfer; labor market dynamics; inter-firm mobility; creative intensive and invention activities; entertainment industries, manufacturing industries |
| JEL: | J62 D83 L00 Z10 L60 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:05-14&r=ino |
| By: | Chris Forman; Avi Goldfarb; Shane Greenstein |
| Abstract: | How much do internal firm resources contribute to technology adoption in major urban locations, where the advantages from agglomeration are greatest? The authors address this question in the context of a business's decision to adopt advanced Internet technology. Drawing on a rich data set of adoption decisions by 86,879 U.S. establishments, the authors find that the marginal contribution of internal resources to adoption is greater outside of a major urban area than inside one. Agglomeration is therefore less important for highly capable firms. The authors conclude that firms behave as if resources available in cities are substitutes for both establishment-level and firm-level internal resources. |
| JEL: | R30 O33 L86 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11642&r=ino |
| By: | Narula ,Rajneesh; Marin ,Anabel (MERIT) |
| Abstract: | This paper seeks to examine the paradox that despite the growing role of FDI in most economies and growth in their share of employment, exports and innovation (‘direct spillovers’), evidence of technological spillovers to domestic firms in the host economy (‘indirect spillovers’) is sparse. Given the explicit dependence of the development strategies of developing countries on FDI after liberalization, it is important for us to ask: Why are these indirect spillovers not occurring? The evidence examined here shows that for the case of Argentina, there are direct spillovers in the form of human capital development and employment. However, there is no evidence of significant positive indirect spillovers to non-affiliated firms in Argentina. Part of this paradox may be explained by the fact that MNEs have acquired the most technologically competitive of their domestic rivals, and crowded out others. However, we postulate that there are a variety of other economic reasons why FDI may prove to be less useful as a driver of industrial development than has previously been argued. The extent to which direct spillovers result in indirect spillovers is intermediated by a number of factors, associated with the MNE and the nature of its assets and the organization of its global operations; the influence of increased cross-border competition on the distribution, concentration and competence level of affiliates and domestic firms, and the nature and extent of the absorptive capacity of the domestic sector. |
| Keywords: | economics of technology ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005024&r=ino |
| By: | Joseph E. Harrington, Jr |
| Abstract: | Scientific progress is driven by innovation — which serves to produce a diversity of ideas — and imitation through a social network — which serves to diffuse these ideas. In this paper, we develop an agent-based computational model of this process, in which the agents in the population are heterogeneous in their abilities to innovate and imitate. The model incorporates three primary forces — the discovery of new ideas by those with superior abilities to innovate, the observation and adoption of these ideas by those with superior abilities to communicate and imitate, and the endogenous development of social networks among heterogeneous agents. The objective is to explore the evolving architecture of social networks and the critical roles that the innovators and imitators play in the process. A central finding is that the emergent social network takes a chainstructure with the innovators as the main source of ideas and the imitators as the connectors between the innovators and the masses. The impact of agent heterogeneity and environmental volatility on the network architecture is also characterized. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:529&r=ino |
| By: | Zon ,Adriaan ,van; Fuss ,Sabine (MERIT) |
| Abstract: | The methods by which fuels can be converted into electricity all belong to different “technology families”: the “gas-fired-turbine-family”, the “coal-fired-turbine-family”, etc. Each family consists of different generations of similar technologies, as in a vintage model. Within a family, the latest generation embodies the most recent level and type of knowledge, becoming more and more outdated as new generations arrive. Producers face the problem how to compose their portfolio of families to minimize risk-adjusted costs of investment and production under a given demand constraint. Risk emanates from a number of uncertainties, such as volatile fuel prices and uncertain (prospects of) technological change. The paper presents a model capturing these features by integrating elements from financial Optimum Portfolio Theory (OPT) in a vintage capital investment framework. We find that the cumulative nature of embodied technical change gives rise to investment responses to (changes in) uncertainty that are in between the ‘standard’ results of OPT and Real Option Theory. |
| Keywords: | economics of technology ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005023&r=ino |
| By: | Lundborg, Per (Trade Union Institute for Economic Research) |
| Abstract: | In 1999, only one of three US scientists and engineers was employed to do R&D and, in several countries over the last forty to fifty years, employment of skilled workers for R&D purposes appears not to have kept pace with the overall increase in the supply of skilled workers. Low utilization of R&D personnel implies low growth per human capital endowments. To analyze the low R&D utilization/low growth equilibria, we set up an endogenous growth model in which firms set fair wages and which allows for an analysis of changes in the utilization rate of R&D workers. We find that the rise in under utilization and the fall in growth per human capital to be consistent with the increase in the demand for higher education. This could be interpreted as the “consumption” element in higher education has received an increased importance yielding a low growth effect of higher education. The results also point at problems of correctly measuring actual human capital inputs in firms. |
| Keywords: | Efficiency wages; fairness; growth |
| JEL: | J31 J41 O40 |
| Date: | 2005–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:fiefwp:0206&r=ino |
| By: | Baalen, P.J. van; Fenema, P.C. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Research on the relationship between Information Technology (IT) and organizations emphasizes the complexity of adaptation processes and the potential of drifting. Drifting means that an organization encounters unexpected circumstances that show the incompleteness and possible failure of an initial technological design without organizations having yet feasible alternatives. This conceptual and empirical paper investigates the origins and nature of drifting, and strategies for dealing with drift. Three strategies have been proposed to deal with drifting: control, incremental, and drift containment. We explore the third option that seems most realistic and relevant from an organizational point of view. We empirically investigated how drift containment could be accomplished in practice in a multi-site ERP implementation project. Our results suggest three phases of dealing with drift. Organizations must first recognize when drifting occurs. Next, they must develop a dual focus. On one hand, they must differentiate between a project’s overarching objectives (which remain relatively stable). On the other hand, they attend to and resolve their operational drifting experience. The dual focus thus means that while organizations stay focused on their objectives, they address the causes of drifting. During the final phase, lessons learnt during drifting resolution must be shared and applied to accelerate accomplishment of project objectives. Implications for research and practice are elaborated. |
| Keywords: | IS implementation;strategy;drift; |
| Date: | 2005–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30007180&r=ino |
| By: | M. KNOCKAERT; A. LOCKETT; B. CLARYSSE; M. WRIGHT |
| Abstract: | This paper uses a unique dataset to examine the neglected but important issue concerning the relationship between the human capital and fund characteristics of venture capitalists and post-investment follow-up behavior in early stage high tech investments. We found no indication that involvement in monitoring activities by the investment manager is determined by either fund or human capital characteristics. In relation to value-adding activities, human capital variables were the most important, with previous consulting experience and entrepreneurial experience contributing to a higher involvement in valueadding activities. Furthermore, the diversity of an investment manager’s portfolio was negatively related to involvement in value-adding activities. Finally, with respect to fund level characteristics, we found that investment managers of captive funds were less involved in value-adding activities. |
| Keywords: | venture capital; early stage high tech firms; post-investment follow-up behavior; human capital; fund characteristics |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:05/325&r=ino |
| By: | Davila, Toni (IESE Business School); Foster, George (Stanford University) |
| Abstract: | Startup firms face a significant managerial challenge when they grow beyond the boundaries of informal interactions. This transition point has often been identified with a significant crisis in the growth path of these firms. An important aspect of this transition is the adoption of management control systems that leverage top management attention and provide the infrastructure to scale up the business model. Using a multi-method, multi-case field research design in a sample of 78 startup firms, we examine the relevance of the adoption of financial systems vis-à-vis other management control systems. We find that financial planning-including cash budget, operating budget and sales projections-are the earliest set of systems adopted. We also look at the association between the adoption of management control systems and startup firm growth. We model this association using a simultaneous equation specification to capture the theoretical arguments that posit the endogeneity of these variables. We find a positive and significant association in both equations among these variables. We further examine whether the often argued CEO replacement at this transition point is associated with the level of adoption of management control systems. We find that CEOs that have adopted fewer systems have shorter tenures. Taking advantage of the intimate knowledge that venture capital investors have about the management processes (and management systems in particular) of the firms they invest in, we examine the association between company valuation and the adoption of management control systems. We find evidence consistent with this association. Finally, we examine the association between the adoption of financial planning systems and the adoption of strategic and human resource planning systems. |
| Keywords: | management control systems; formal systems; professionalization; CEO tenure; startups; |
| Date: | 2005–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0603&r=ino |
| By: | Giulio Bottazzi; Alex Coad; Nadia Jacoby; Angelo Secchi |
| Abstract: | We report several characteristics of industrial dynamics, including the firm size distribution, Gibrat's Law, and also the distribution of growth rates and their autocorrelation. We use a variety of econometric techniques, looking first at the aggregate and subsequently at a sectoral level. Many of our results corroborate previous findings, but there are also several surprises. For example, although previous findings on US and Italian data find that the growth rate distribution follows the Laplace density (i.e. is 'tent-shaped'), the French growth rates distribution has noticeably fatter tails. Growth rates depend negatively on size but the relationship does not seem to be linear, with larger firms possibly growing faster than medium-sized ones. It also appears that growth rate autocorrelation may vary with firm size: autocorrelation is negative for smaller firms, but the magnitude seems to decrease with size and becomes positive for larger firms. |
| Keywords: | Industrial dynamics, Gibrat's Law, Firm Growth, Aggregation. |
| Date: | 2005–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2005/21&r=ino |
| By: | M. BUELENS; D. BOUCKENOOGHE; D. DE CLERCQ; A. WILLEM |
| Abstract: | Based on an analysis of empirical articles published in the academic literature between 1999 and 2003, we examined the current state of the small business and entrepreneurship research in terms of its validity. We collected 275 relevant publications in order to explore the small business and entrepreneurship field with respect to internal validity, external validity, construct validity, and statistical conclusion validity. Our aim was to gain insight into the dominant methodological and statistical practices that currently shape the field, shed light on possible gaps, and compare these observations with the findings in the management literature. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:05/328&r=ino |
| By: | Nour, Samia Satti O. M. (United Nations University, Institute for New Technologies) |
| Abstract: | This paper employs both descriptive and comparative approaches to discuss science and technology (S&T) development in Arab countries in the Gulf and Mediterranean regions. Throughout the paper we use the Organisation for Economic Cooperation and Development’s definition of S&T indicators (OECD, 1997). From this research we find that neither the Gulf nor the Mediterranean countries investigated possess sufficient human or financial resources to promote S&T performance. We show that the low level of resources devoted to S&T development together with inadequate economic structures mean that the Gulf and Mediterranean Arab countries lag behind the world’s advanced and leading developing countries in terms of S&T input and output indicators. In both regions, most of the research, development and S&T activities occur within public and academic sectors, with only a very small contribution from the private sector. When comparing S&T indicators between the two Arab regions we find that despite the high standard of economic development in the Gulf countries, as measured by gross domestic product per capita and the human development index, it is the Mediterranean countries that perform better in most of the S&T input and output indicators. Furthermore, we show that there is very limited scientific cooperation within and between the Gulf and Mediterranean countries as well as between them and other Arab countries. In contrast, three Arab countries from the Mediterranean region – Morocco, Algeria and Tunisia – show active scientific cooperation with the international community, especially the OECD and France in particular. This implies that social proximity (sharing similar religion, language, culture, etc.) does not help regional scientific cooperation within the Arab world; it is geographical proximity to Europe that motivates these countries’ international scientific cooperation |
| Keywords: | S&T indicators, input-output indicators, Arab Gulf countries, Arab Mediterranean countries. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unuint:200503&r=ino |