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on Innovation |
| By: | Colin Wessendorf |
| Abstract: | Key enabling technologies (KETs) have gained attention in science and policy due to their multidisciplinary nature and their ability to link distant knowledge fields, endowing them with a central role in recombinant innovation processes. However, it remains under-researched whether KETs generally have a higher influence on innovation processes than non-KETs. This study addresses the question by using propensity score matching and regression analysis. First, a balanced dataset is created through matching KET patents to non-KET patents that stem from a comparable context. Subsequently, it is analyzed whether KET patents are associated with higher forward citation frequencies than non-KETs. The results show that KETs receive more citations on average, but it appears that this effect is driven by a few very impactful patents. The results further show that not all KETs exert a measurable impact on forward citations and highlight the heterogeneities between the individual KETs. These findings call for a more critical assessment of the KET concept and for nuanced approaches in research and policy. |
| Keywords: | Key enabling technologies, general purpose technologies, recombinant novelty, technological impact, patent citations, propensity score matching |
| JEL: | O30 O31 O33 C21 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:atv:wpaper:2403 |
| By: | Stefano Basilico; Alberto Marzucchi; Sandro Montresor; ; |
| Abstract: | This paper focuses on the combination of green and digital technologies at the regional level. Using patent data, we put forward an original measurement of the regional speed of green-digital (i.e. twin) combination: the temporal distance between the time at which a combination is realised for the first time in the frontier region and the time at which this same combination is accomplished in the focal region. We proceed by investigating the drivers and the technological impact related to this speed. We find that the speed of combination is enhanced by dealing with broad and diverse twin technologies. The speed at which the gap is closed, also crucially depends on the interdependencies between green and digital domains, captured by the overlap in their knowledge bases. Counterintuitively, the longer the combination paths, the faster the region combines green and digital technologies. This finding is then rationalised further looking at the policy and network characteristics. Finally, we find that the earlier the combination happens, the greater is likely to be the impact on subsequent inventions, but only for granted patents. Overall, these results are discussed in terms of policy recommendations, given the high attention placed by policymakers on the twin transition. |
| Keywords: | Twin transition; Digital technologies; Green technologies; Regional knowledge base |
| JEL: | O31 O33 R11 R12 Q55 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2440 |
| By: | RENTOCCHINI Francesco (European Commission - JRC); VEZZANI Antonio; MONTRESOR Sandro |
| Abstract: | We examine whether government sponsored R&D induces the development of clean technologies with a high impact on subsequent technological development. The analysis uses information on USPTO patents granted between 2005 and 2015 and combines different methods to control for possible sorting of projects into public funding and for non-random (public) treatment. We also assess the distributional effect of government sponsored R&D. Results show that patents from public funded projects have a significantly higher impact and that this is particularly true for highly cited patents, thus supporting a role for technology-push policies in determining a clean technological transition. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:wpaper:202301 |
| By: | Jean-Michel Benkert, Igor Letina |
| Abstract: | We provide a model of investment in innovation that is dynamic, features multiple heterogeneous research projects of which only one potentially leads to success, and in each period, the researcher chooses the set of projects to invest in. We show that if a search for innovation starts, it optimally does not end until the innovation is found—which will be never with a strictly positive probability. |
| Keywords: | Innovation, Optimal Search, Infinite Horizon |
| JEL: | D83 O31 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ube:dpvwib:dp2410 |
| By: | Ali-Yrkkö, Jyrki; Kauhanen, Antti |
| Abstract: | Abstract This study examines the impact of foreign acquisitions on innovation activities in Finnish target firms using comprehensive linked employer-employee data from 2010–2021. Unlike previous research that found negative effects on R&D expenditures and patenting, we measure innovation through the share of R&D personnel in total employment. Our main finding is that foreign acquisitions have a statistically insignificant and economically small impact on the share of R&D employees in target firms. Three years post-acquisition, the point estimate shows a 0.9 percentage point increase in R&D employee share, and we can rule out increases over 2 percentage points and decreases below 0.09 percentage points. This null effect persists across different firm sizes and industries. Our results suggest that con-cerns about foreign acquisitions substantially reducing domestic R&D activity may be overstated, at least when measured by R&D employment. |
| Keywords: | Acquisition, M&A, Research, Development, R&D, Innovation, Impact |
| JEL: | O3 L6 L64 |
| Date: | 2024–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:122 |
| By: | Flavio Calvino; Chiara Criscuolo; Luca Fontanelli; Lionel Nesta; Elena Verdolini |
| Abstract: | We leverage a uniquely comprehensive combination of data sources to explore the enabling role of human capital in fostering the adoption of predictive AI systems in French firms. Using a causal estimation approach, we show that ICT engineers play a key role for AI adoption by firms. Our estimates indicate that raising the current average share of ICT engineers in firms not using AI (1.66%) to the level of AI users (6.7%) would increase their probability to adopt AI by 0.81 percentage points - equivalent to an 8.43 percent growth. However, this would imply substantial investments to fill the existing gap in ICT human capital, amounting to around 450.000 additional ICT engineers. We also explore potential mechanisms, showing that the relevance of ICT engineers for predictive AI is driven by the innovative nature of its use, make-vs-buy choices, large availability of data, ICT and R&D intensity. |
| Keywords: | artificial intelligence, human capital, technological diffusion |
| Date: | 2024–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2055 |
| By: | Armin Schmutzler |
| Abstract: | By affecting prices and thereby market shares of green and brown firms, product innovations and process innovations influence industry emissions even when they do not directly affect the emission intensity of the innovating firm. Using a differentiated two-stage duopoly, this paper therefore analyzes the effects of environmental policy on such innovations, and it asks how these effects differ from each other and from those of environmental innovations that directly reduce the emission intensity. The paper investigates the determinants of R&D investments, showing in particular that incentives for certain types of potentially beneficial innovations may be negative. Moreover, it analyzes how suitable policies can foster green innovation. |
| Keywords: | Innovation, environmental policy, imperfect competition |
| JEL: | Q55 L13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:462 |
| By: | Dawid, Herbert (Center for Mathematical Economics, Bielefeld University); Riedel, Frank (Center for Mathematical Economics, Bielefeld University); Steg, Jan-Henrik (Center for Mathematical Economics, Bielefeld University); Wen, Xingang (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | We study endogenous, credit-financed innovation under uncertainty in dynamic con- texts. In our model, a firm with limited cash reserves decides how much to invest in an R&D project, potentially using external financing. Investing more increases the proba- bility of a sooner innovation, but higher repayment obligations also increase bankruptcy risk if the innovation takes longer. We show that the firm reduces its investment dis- continuously if the financing cost is not favorable enough, in order to avoid the need for external financing. This insight implies that policies reducing financing costs can have discontinuous positive effects on investment, innovation rate and welfare. How- ever, policy measures increasing the effectiveness of R&D might reduce the innovation rate and welfare due to a discontinuous reduction of R&D investment. Furthermore, we find that low financing costs can lead to over-investment. The welfare loss from cash constraints is more severe for radical innovations compared to incremental ones. |
| Keywords: | Innovation, R&D investment, Cash constraints, Bankruptcy risk |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:699 |
| By: | Steven Callander (Stanford University, Stanford Graduate School of Business); Hongyi Li (University of New South Wales, School of Economics) |
| Abstract: | Innovations bring many benefits to society, but they can also bring harm. We study the problem of a regulator deciding whether to approve an innovation where information about the impact of the innovation is held within the firms that are developing it. We show that competition for the innovation undermines the regulator’s ability to extract the information she needs to make good policy. As the number of firms increases and the expected benefit of the innovation grows, the probability that the regulator is persuaded to approve an innovation decreases. This tension between competition and communication reverses Arrow’s famous “replacement effect.” Thus, in regulated markets, more competition can lead to fewer innovations making it to market. We explore how this tension can be mitigated, but not eliminated, by political and market design. |
| Keywords: | Innovation, regulation, competition |
| JEL: | L51 O31 D82 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:swe:wpaper:2024-07 |
| By: | Pia Andres; Ralf Martin; Maxwell Read; Esin Serin; Arjun Shah; Anna Valero |
| Abstract: | This paper presents new evidence to inform industrial strategy prioritisation of clean energy technologies in the UK. It focuses on seven technology categories relevant for reducing emissions across power, heat and industry. We present a granular analysis at the sub-technology level to identify opportunities for growth, both nationally and sub-nationally, and consider strategic importance for the UK. A 'green industrial policy matrix' summarises our findings and points to CCUS and offshore wind as particular areas where the UK has current and future potential strengths, and where there is potential for growth that is regionally balanced - though all seven categories contain specific technologies that could represent opportunities for the UK. Our methodology can be extended for other technologies and sectors. |
| Keywords: | Green Energy , Industrial Strategy, Technological change |
| Date: | 2024–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepsps:48 |
| By: | Beatrice Negro; Giovanni Dosi; Maria Enrica Virgillito |
| Abstract: | The adverse effects of the climate crisis call for a structural change in the economy toward less environmentally disruptive development pathways. To address decarbonisation, hydrogen seems to be the most promising element to complement renewable energy. However, the dominant technology for its production relies on hydrocarbons, while a radical transition would require the establishment of a green hydrogen technological paradigm. Green hydrogen production is also hampered by critical materials and geographic attributes that only some countries would meet. This may constitute a window of opportunity for latecomers' countries to pursue green industrialization or a condition for their exploitation. So, what are the drivers behind hydrogen technologies production? And, how do countries learn and consequently specialise? We tackle these questions investigating the technologies, products, and processes behind hydrogen production. Using trade data, we examine the pattern of countries' specialisation and dependence on raw materials. Our findings indicate that hydrogen technologies market is undergoing a transformation in their composition rather than expansion. Moreover, looking at the critical raw materials content of green hydrogen technology, we find a negative relationship between dependence on critical raw materials and the autonomous specialisation of countries in their related production. |
| Keywords: | ecological transition, hydrogen paradigms, specialisation, dependency, mission-oriented policies |
| Date: | 2024–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2024/33 |
| By: | Abe C. Dunn; Lasanthi Fernando; Eli Liebman |
| Abstract: | Medical innovation is a key driver of cost growth and improved life expectancy, but measuring the welfare contribution of innovations is challenging. We leverage thousands of medical studies to estimate the quality of treatments for 13 health conditions and combine these estimates with insurance claims data to quantify how innovations diffuse and their impact on costs and quality. Across nearly all conditions we study, we find higher quality innovations diffuse. Like markets outside of healthcare, we find innovations can improve consumer welfare substantially. However, we also observe a phenomena arguably unique to healthcare, cases where innovation reduces consumer welfare. |
| JEL: | E31 O30 I10 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bea:papers:0132 |