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on Innovation |
| By: | Bernhard Ganglmair; Alexander Kann |
| Keywords: | defensive publications, disclosure, open innovation, patents, R&D, text-asdata We study the content, novelty, and value of defensive publications relative to patents. We use a large language model (LLM) to apply the cooperative patent classification (CPC) system to a set of defensive publications (from 1962 to 2022) from the journal Research Disclosure, thus mapping such research disclosures and patents into a common space and allowing for a direct evaluation of textual similarities between these two types of R&D outputs. We find that while in some technologies, patents and research disclosures follow similar aggregate trends, some exhibit diverging developments over time. We also document shifts in the position of research disclosures in the patenting space that are indicative of changes in the technological landscape not captured in patents. We further show that substantial numbers of research disclosures are published before their closest patents are filed, and many contain terminology before it is first used in patents. Last, we find that in several technology areas, research disclosures have evolved from being an outlet for niche results to a vehicle to publicize technological developments of high practical relevance and value. Our results imply that when we draw conclusions about the nature of technological progress or the direction of innovation based solely on patent data, we obtain an incomplete picture. |
| JEL: | C81 O32 O34 O36 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_656 |
| By: | Dossi, Gaia; Morando, Marta |
| Abstract: | We study the role of political ideology for a critical group of economic agents: inventors. We document that, in "politically polarizing" fields, inventors patent innovations aligned with their political beliefs. We construct a novel dataset matching data from the US Patent Office (USPTO) with individual Voter Register data for two large US states, and with the universe of US campaign contributions data. We proxy political ideology with individual party affiliation and focus on fields where the ideological distance between Republicans and Democrats is especially large in the general population. We find that, compared to Republicans, Democrats are: i) more likely to file green patents; ii) more likely to file female-health patents, and this persists in the sub-set of male inventors; and iii) less likely to file weapon-related patents. The magnitudes are large and range from one-fourth to one-third of total patent production in these technologies. This pattern is explained by inventors sorting into firms, rather than by within-firm dynamics. Socio-economic status, geography, or differential reactions to monetary incentives cannot explain our findings. Importantly, ideological sorting persists in research organizations, suggesting that inventors may derive intrinsic utility from producing innovation aligned with their beliefs. We rationalize our findings using a stylized model of the labor market where inventors derive amenity value from producing innovation close to their political ideology. |
| Keywords: | political ideology; innovation; inventors |
| JEL: | O30 |
| Date: | 2023–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126760 |
| By: | Antonin Bergeaud; Max Deter; Maria Greve; Michael Wyrwich |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on German patents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | patents, migration, Germany, iron curtain, innovation |
| Date: | 2025–02–19 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2076 |
| By: | Altomonte, Carlo; El-Mallakh, Nevine; Sonno, Tommaso |
| Abstract: | We build a novel worldwide database merging information on patent-citations of firms paired with information on firms' affiliation to Business Groups (BGs). We exploit these data to document how BGs appropriate knowledge through standalone firm acquisition. First, we confirm that innovative standalone firms have a higher probability of becoming part of a BG. Second, we document how BGs tend to acquire firms that are on an upward trend in patents and citations. We also show that innovating activity significantly deteriorates post-acquisition, particularly for firms with high-quality, cited patents. Third, we show that such a deterioration in innovation activity is driven by acquired firms patenting within the same technological classes of the acquiring BG, while the latter does not hold for acquired firms patenting in different technologies than the BG's. We also find that acquisitions occurring in environments characterized by higher market concentration and more mature leading firms are associated with a relatively more pronounced reduction in innovation. These results generalize the defensive acquisition narrative, suggesting that BGs leverage these transactions as a strategic manoeuvre to solidify their market position in the face of potential competition. |
| Keywords: | business groups; innovation |
| JEL: | O30 |
| Date: | 2024–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126757 |
| By: | Bøler, Esther Ann; Holtsmark, Katinka; Ulltveit-Moe, Karen Helene |
| Abstract: | We analyze how a major negative shock to the producers of fossil fuels may lead to a shift from dirty to clean R&D along the supply chain. First, we develop a theoretical framework of directed technical change, showing that adjustment costs in R&D activity can lead fossil energy sector suppliers to shift their R&D activity towards clean innovation more than other firms, as a consequence of a negative oil price shock. Second, we investigate the impact of a major drop in the oil price in 2014 on clean R&D. Relying on rich firm level trade data, we propose a novel method of identifying firms' exposure to the price shock. We find that more exposed firms increased their clean R&D investments more than less exposed firms. Our findings contribute to the understanding of the drivers of clean technological change, which is vital to assess the effectiveness of different climate policy measures, including carbon pricing. |
| Keywords: | clean innovation; supply chains; carbon pricing |
| JEL: | F18 O31 Q55 Q58 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126766 |
| By: | Lehmann-Hasemeyer, Sibylle H.; Morell, Alexander |
| Abstract: | Using data on all patent cases in front of German courts between 2010 and 2015 we find that plaintiffs in patentinfringement cases mainly chose the venue where to sue by the speed with which courts dispose of their cases. We also find that quality - measured, both, as the fraction of cases challenged in the next instance and the ratio of successful appeals in the year before filing - has an impact on court choice by patent plaintiffs. We can further show that plaintiffs merely shop between three German courts, namely Duesseldorf, Munich and Mannheim. Moreover, we find that once one of these three courts introduces an additional panel of three judges, thereby working faster, the other two courts increase their working speed, too. This indicates that, indeed, courts actively compete for cases. However, we do not find evidence for courts reacting to a competitor's increase in speed by deciding in the plaintiffs favor more often or by deteriorating quality of decisions. We thank the ministries of justice of the 16 German Laender for the detailed data on patent cases. Moreover, we thank Stefan Bechtold, Fabian Gaessler, Dietmar Harhoff, Lea Tochtermann, Mike Schuster, Holger Spamann, the participants of the network meeting of the DFG network "Conflict Strategies in Innovation Markets" in Mannheim (Dec. 2023), the participants of the International Meeting of Law and Economics in Bruges (Apr. 2024), seminar participants at the ETH Zurich (Apr. 2024), participants of the CELS 2024 at Emory Law School, Atlanta (Nov. 2024), and the participants of the SAFE 2025 research retreat (Jan. 2025) for their valuable comments. |
| Keywords: | Organizational Behavior, Intellectual Property, Litigation, Patents and Innovation |
| JEL: | D23 K11 K41 O34 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:312400 |
| By: | Fontanelli, Luca; Calvino, Flavio; Criscuolo, Chiara; Nesta, Lionel; Verdolini, Elena |
| 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 |
| JEL: | J24 O33 |
| Date: | 2024–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126787 |
| By: | Jacob Moscona; Karthik A. Sastry |
| Abstract: | An influential explanation for global productivity differences is that frontier technologies are adapted to the high-income countries that develop them and "inappropriate" elsewhere. We study this hypothesis in agriculture using data on novel plant varieties, patents, output, and the global range of crop pests and pathogens. Innovation focuses on the environmental conditions of technology leaders, and ecological mismatch with these markets reduces technology transfer and production. Combined with a model, our estimates imply that inappropriate technology explains 15-20% of cross-country agricultural productivity differences and re-shapes the potential consequences of innovation policy, the rise of new technology leaders, and environmental change. |
| JEL: | O3 O33 O4 O44 Q16 Q56 Q57 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33500 |
| By: | Aghion, Philippe; Barrage, Lint; Hemous, David; Liu, Ernest |
| Abstract: | We analyze a model of green technological transition along a supply chain. In each layer, a good is produced with a dirty technology, or, if the required "electrification" innovation has occurred, with a clean technology which uses the immediate upstream good. We show that the economy is characterized by a single equilibrium but multiple steady-states, and that even in the presence of Pigouvian environmental taxation, a targeted industrial policy is generally necessary to implement the social optimum. We also show that: (i) small, targeted, industrial policy may bring large welfare gains; (ii) a government which is constrained to focus its subsidies to electrification on one particular sector, should primarily target downstream sectors; (iii) when extending the model so as to allow for supply chains also for the dirty technology, overinvesting in electrification in the wrong upstream branch may derail the overall transition towards electrification downstream. Finally, we illustrate our model with a calibration to decarbonization of global iron and steel production via hydrogen direct reduction, and show that, absent industrial policy, the economy can get stuck in a "wrong" steady-state with CO2 emissions vastly above the social optimum even with a carbon price in place. |
| Keywords: | technological change; green growth; supply chain; industrial strategy |
| JEL: | Q50 |
| Date: | 2024–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126750 |
| By: | James Bessen; Xiupeng Wang |
| Abstract: | Investments in software, R&D, and advertising have surged, nearing half of U.S. private nonresidential investment. Yet just a few hundred firms dominate this growth. Most firms, including large ones, regularly invest little in capitalized software and R&D, widening this “intangible divide” despite falling intangible prices. Using comprehensive US Census microdata, we document these patterns and explore factors associated with intangible investment. We find that firms invest significantly less in innovation-related intangibles when their rivals invest more. One firm’s investment can obsolesce rivals’ investments, reducing returns. This negative pecuniary externality worsens the intangible divide, potentially leading to significant misallocation. |
| Keywords: | intangibles, R&D, software, innovation, obsolescence |
| JEL: | E22 O31 O32 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-15 |
| By: | Estrin, Saul; Herrmann, Andrea; Levesque, Moren; Mickiewicz, Tomasz; Sanders, Mark |
| Abstract: | We present a Schumpeterian growth model with new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven, revenue-at-breakeven and relates this to the level of innovation. We then explore the tradeoffs between these outcomes empirically in a unique sample of 331 information and communication technology (ICT) ventures using a multi-input, multi-output stochastic frontier model. We estimate the contribution of financial capital and labor input to the outcomes and the tradeoffs between them, as well as address heterogeneity across ventures. We find that more innovative (and therefore more uncertain) ventures have lower speed-to-breakeven and/or lower revenue-at-breakeven. Moreover, for all innovativeness levels, new ventures face a tradeoff between speed-to-breakeven and revenue-at-breakeven. Our results suggest that it is the availability of proprietary resources (founder equity and labor) that helps ventures overcome bottlenecks in the innovation process, and we propose a line of research to explain the (large) unexplained variation in venture creation efficiency. |
| Keywords: | entrepreneurship; innovation; new venture creation; proprietary resources; stochastic frontier analysis; schumpeterian growth model |
| JEL: | O31 L29 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126789 |
| By: | Draca, Mirko; Nathan, Max; Nguyen, Viet Nguyen-Tien; Oliveira Cunha, Juliana; Rosso, Anna; Sivropoulos-Valero, Anna Valero |
| Abstract: | Which types of human capital influence the adoption of advanced technologies? We study the skill biased adoption of information and communication technologies (ICT) across two waves in the UK. Specifically, we compare the 'new wave' of cloud and machine learning / AI technologies during the 2010s - pre-LLM - with the previous wave of personal computer adoption in the 1990s and early 2000s. At the area-level we see the emergence of a distinct STEM-biased adoption effect for the second wave of cloud and machine learning / AI technologies (ML/AI), alongside a general skill-biased effect. A one-standard deviation increase in the baseline share of STEM workers in areas is associated with around 0.3 of a standard deviation higher adoption of cloud and ML/AI. We find similar effects at the firm level where we are able to test for the influence of a wide range of skills. In turn, this STEM-biased adoption pattern has encouraged the concentration of these technologies, leading to more acute differences between high-tech and low-tech areas and firms. In contrast with classical technology diffusion, recent cloud and ML/AI adoption in the UK seems more likely to widen inequalities than reduce them. |
| Keywords: | technology diffusion; ICT; human capital; stem; technological change; AI |
| JEL: | J24 O33 R11 |
| Date: | 2024–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126769 |
| By: | Wittmann, Florian; Schnabl, Esther; Zenker, Andrea |
| Abstract: | Policies aimed at supporting economically lagging regions have changed considerably in the past decades. This includes an increased link between innovation and regional policy, as well as more recently transformative policy. The WIR! Programme, funded by the Ministry of Research and Education in Germany, introduces several policy innovations in this regard, such as an explicit link between innovation and structural change, the emphasis on involving new (societal) actors, and a broad understanding of innovation. Although such innovations have the potential to provide a fresh start for policy-making, it remains an open question how applicants and programme administrations cope with a changing funding environment. This paper investigates - by examining applicant structure, project outlines, and funding decisions - how these new requirements are taken into account. While evidence in favour of a partial reorientation is found, the analysis reveals a strong continuity of established patterns and priorities, with many project outlines focusing mostly on technological innovation and relatively narrow stakeholder involvement. These findings suggest that while initiatives like WIR! may provide new impulses, it may take longer for applicants and programme management to adjust to changing policy paradigms. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisifr:312396 |
| By: | de Graaff, Sabine; Wanzenböck, Iris; Frenken, Koen |
| Abstract: | Different interpretations of ‘directionality’ in innovation policy and sustainability transitions literatures suggest the need for distinguishing between actors ‘giving direction’ contributing to transformative change, and ‘systemic directionality’ as a feature of transformative change required to address urgent societal challenges. In a first step towards bridging these understandings, we emphasize the process-oriented and political nature of directionality, and mobilize political theory to conceptualize the politics of directionality. The questions:‘who gives which direction, where, how, when and why’ are employed to discuss the politics of directionality in an integrative literature review of five policy process frameworks: Multiple Streams Framework (MSF), Punctuated Equilibrium Theory (PET), Policy Feedback Theory (PFT), Advocacy Coalition Framework (ACF) and the Narrative Policy Framework (NPF). We present a conceptual framework integrating insights from policy process frameworks for conceptualizing the politics of directionality as involving both actors giving direction and the systemic directionality of transformative change. |
| Date: | 2023–11–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:au9hq_v1 |
| By: | Johannes Gessner |
| Keywords: | environmental regulation, global value chains, innovation, fuel economy standards, directed technological change Decarbonizing industries to mitigate climate change requires technological change. Innovation by suppliers can play a crucial role in the technological transition, particularly when suppliers have expertise in zero-emission technologies. In this paper, I study the effect of environmental regulation in a downstream industry on the innovation outcomes of suppliers in the context of the European CO2 emission standard for passenger cars. I construct a novel data set that links administrative data on car manufacturer compliance to supplier patent data using information on automotive supply chains. To identify the causal effect of changes in the stringency of the emission standard, I leverage the heterogeneous exposure of automotive suppliers to changes in the composition of the European car market in the aftermath of the 2015 Volkswagen diesel scandal. Exposure to more stringent environmental regulation increases innovation for zero-emission vehicle technologies among existing suppliers. In addition, the likelihood that car manufacturers form new supply chain links to firms with expertise in technologies to reduce vehicle emissions increases in response to more stringent environmental regulation. These results suggest that environmental regulation induces economically significant technology spillovers to the regulated firms. |
| JEL: | O30 Q55 Q58 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_654 |
| By: | Furnas, Alexander C; LaPira, Timothy Michael (James Madison University); Wang, Dashun |
| Abstract: | Science, long considered a cornerstone in shaping policy decisions, is increasingly vital in addressing contemporary societal challenges. However, it remains unclear whether science is used differently by policymakers with different partisan commitments. Here we combine large-scale datasets capturing science, policy, and their interactions to systematically examine the partisan differences in the use of science in policy across both the federal government and ideological think tanks in the United States. We find that the use of science in policy documents has featured a steady increase over the last 25 years, highlighting science’s growing relevance in policymaking. However, this marked increase masks stark and systematic partisan differences in the amount, content, and character of science used in policy. Democratic-controlled congressional committees and left-leaning think tanks cite substantially more science, and more impactful science, compared to their Republican and right-leaning counterparts. Moreover, the two factions cite substantively different science, with only about 5% of scientific papers being cited by both parties, underscoring a strikingly low degree of bipartisan engagement with scientific literature. We find that the uncovered large partisan disparities are rather universal across time, scientific fields, policy institutions, and issue areas, and they are not simply driven by differing policy agendas. Probing potential mechanisms, we field an original survey of over 3, 000 political elites and policymakers, finding substantial partisan differences in trust in scientists and scientific institutions, which potentially contribute to the observed disparities in science use. Overall, amidst rising political polarization and science’s increasingly critical role in informing policy, this paper uncovers systematic partisan disparities in the use and trust of science, which may have wide-ranging implications for science and society at large. |
| Date: | 2024–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:aep9v_v1 |