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on Technology and Industrial Dynamics |
| By: | Flavio L. Pinheiro; Pierre-Alexandre Balland; Ron Boschma; Dominik Hartmann |
| Abstract: | As regions evolve, their economies become more complex, and they tend to diversify into related activities. Although there is a bright side to this diversification process in terms of economic development, there may also be a dark side to it, as it possibly contributes to regional inequalities. The paper uses data on industries and patents to analyze the diversification patterns of 283 regions in 32 European countries over the past 15 years. We find that only the most economically advanced regions have the opportunity to diversify into highly complex activities. These regions tend to focus on related high-complex activities, while lagging regions focus on related low-complex activities, creating a spatial inequality feedback loop. This pattern creates a wicked problem for innovation policy: the strategy needed to improve the innovativeness of the European knowledge system might disproportionately benefit regions that are already developed and foster disparities. |
| Keywords: | dark side of innovation, geography of innovation, regional diversification, complexity, regional inequality, Smart Specialisation Policy |
| JEL: | O25 O33 R11 O31 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2202&r= |
| By: | Koski, Heli; Fornaro, Paolo |
| Abstract: | Abstract Research and development (R&D) tax credits are widely employed among the OECD countries to promote business sector investments in innovation. The implementation of R&D tax credit schemes, however, varies across countries. The empirical research on the effectiveness of R&D tax incentives suggests that the strength of company responses (in R&D expenditures) to more generous tax incentives substantially differ across countries. We use data from 25 OECD countries, collected from 2010 to 2018, to explore the relationship between a set of R&D tax scheme features and innovation performance. Our estimation results show that the business sector R&D expenditure is higher among those countries that have implemented either an R&D tax credit scheme with an incremental deduction basis or a hybrid scheme with both volume-based and incremental tax relief components. The input additionality is highest when the R&D tax incentives are based on the incremental deduction. Further, the hybrid tax credit scheme positively relates to innovation output. The business sector R&D investment are higher in the countries with an R&D tax credit scheme that provides favorable treatment for SMEs or option to carry forward unclaimed R&D tax credits. |
| Keywords: | R&D tax incentives, R&D investments, Innovation policy, Patents |
| JEL: | K34 L5 O3 O31 |
| Date: | 2022–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:123&r= |
| By: | Czarnitzki, Dirk; Giebel, Marek |
| Abstract: | We utilize a new survey experiment to evaluate the existence and degree of financial constraints for R&D in the economy. The experiment does not only allow to deduct the presence of financial constraints, but also to evaluate their economic significance. Using data on German companies, we find that financial constraints for R&D exist but that their relevance might have been overestimated in the literature. Most R&D projects that have not been implemented because of financial constraints turn out to have low expected marginal rates of return. While this findings stands in some contrast to other studies, we also find several results that are in line with the literature: young firms are most constrained and the constraints occur at the intensive margin, i.e. our results do not suggest that non-innovative companies are deterred from innovation. Instead, highly innovative companies are restricted by the capital market. |
| Keywords: | Innovation,Financial Constraints,Survey Experiment |
| JEL: | G30 O30 O31 O32 L21 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21084&r= |
| By: | Laureti, Lucio; Costantiello, Alberto; Matarrese, Marco Maria; Leogrande, Angelo |
| Abstract: | In this article we evaluate the determinants of the Employment in Innovative Enterprises in Europe. We use data from the European Innovation Scoreboard of the European Commission for 36 countries in the period 2000-2019 with Panel Data with Fixed Effects, Panel Data with Random Effects, Dynamic Panel, WLS and Pooled OLS. We found that the “Employment in Innovative Enterprises in Europe” is positively associated with “Broadband Penetration in Europe”, “Foreign Controlled Enterprises Share of Value Added”, “Innovation Index”, “Medium and High-Tech Product Exports” and negatively associated to “Basic School Entrepreneurial Education and Training”, “International Co-Publications”, and “Marketing or Organizational Innovators”. Secondly, we perform a cluster analysis with the k-Means algorithm optimized with the Silhouette Coefficient and we found the presence of four different clusters. Finally, we perform a comparison among eight different machine learning algorithms to predict the level of “Employment in Innovative Enterprises” in Europe and we found that the Linear Regression is the best predictor. |
| Keywords: | Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Choices and Consequences • Diffusion Processes; Intellectual Property and Intellectual Capital. |
| JEL: | O30 O31 O32 O33 O34 |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111335&r= |
| By: | Dieter F. Kogler; Ronald B. Davies; Changjun Lee; Keungoui Kim |
| Abstract: | This paper aims to uncover the mechanism of how the network properties of regional knowledge spaces contribute to technological change from the perspective of regional knowledge entry-relatedness and regional knowledge entry-potential. Entry-relatedness, which has been previously employed to investigate the technology evolution of regional economies, is advanced by introducing a knowledge gravity model. The entry-potential of a newly acquired regional specialisation has been largely ignored in the relevant literature; surprisingly given the high relevance that is attributed to the recombination potential of new capabilities. In other words, just adding new knowledge domains to a system is not sufficient alone, it really depends on how these fit into the existing system and thus can generate wider economic benefits. Based on an empirical analysis of EU Metro and non-Metro regions from 1981 to 2015, we find that entry-relatedness has a significant negative association with novel inventive activities, while entry-potential has a significant positive association with the development of novel products and processes of economic value. This highlights that regions’ capacity to venture into high-potential areas of technological specialization in the knowledge space outperforms purely relatedness driven diversification that is frequently promoted in the relevant literature. |
| Keywords: | Regional knowledge space; Entry-relatedness; Entry-potential; Technological change; Economic growth; Patent analysis |
| JEL: | O33 O31 R11 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:oapubs:10197/12731&r= |
| By: | Mariagrazia Squicciarini; Jacopo Staccioli |
| Abstract: | This paper exploits natural language processing techniques to detect explicit labour-saving goals in inventive efforts in robotics and assess their relevance for different occupational profiles and the impact on employment levels. The analysis relies on patents published by the European Patent Office between 1978 and 2019 and firm-level data from ORBIS® IP. It investigates innovative actors engaged in labour-saving technologies and their economic environment (identity, location, industry), and identifies technological fields and associated occupations which are particularly exposed to them. Labour-saving patents are concentrated in Japan, the United States, and Italy, and seem to affect low-skilled and blue-collar jobs, along with highly cognitive and specialised professions. A preliminary analysis does not find an appreciable negative effect on employment shares in OECD countries over the past decade, but further research to econometrically investigate the relationship between labour-saving technological developments and employment would be helpful. |
| Date: | 2022–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:124-en&r= |
| By: | Takalo, Tuomas; Tanayama, Tanja; Toivanen, Otto |
| Abstract: | We construct a model of innovation incorporating R&D externalities, R&D participation, financial market imperfections, and application and allocation of R&D subsidies, estimate it using Finnish R&D project level data and conduct a welfare analysis. The intensive, not the extensive R&D margin is important. Financial market imperfections are small.Tax credits and subsidies do not reach first best R&D but increase R&D 29-47% compared to laissez-faire. Welfare effects are small: Tax credits increase welfare 1%; subsidies reduce welfare once application costs are taken into accout. In terms of fiscal cost, tax credits are 90% more expensive than R&D subsidies. |
| Date: | 2022–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2022_002&r= |
| By: | James J. Feigenbaum; Daniel P. Gross |
| Abstract: | AT&T was the largest U.S. firm for most of the 20th century. Telephone operators once comprised over 50% of its workforce, but in the late 1910s it initiated a decades-long process of automating telephone operation with mechanical call switching—a technology first invented in the 1880s. We study what drove AT&T to do so, and why it took one firm nearly a century to automate this one basic function. Interdependencies between operators and nearly every other part of the business were obstacles: the manual switchboard was the fulcrum of a complex system which had developed around it, and automation only began after the firm and automatic technology were adapted to work together. Even then, automatic switching was only profitable for AT&T in larger markets—hence diffusion expanded as costs declined and service areas grew. We show that automation supported AT&T's continued growth, generating a positive feedback loop between scale and automation that reinforced AT&T's high market share in local markets. |
| JEL: | J23 L11 L23 M11 M15 M54 N32 O33 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29580&r= |
| By: | Haji Ali Beigi, Maryam |
| Abstract: | This study gives a new identity to a knowledge search mode named search diversity and investigates how it is more rigorous in capturing knowledge heterogeneity in comparison to general assessment of search breadth. By distinguishing between diversifying and expanding search domain as building blocks of broadening search scope, this study proposes a hybrid search strategy when it comes to analysis of the link between external search and innovation performance. While a positive trend is found for search breadth and innovation in this review, search diversity indicates a curvilinear pattern but with a steeper positivity than search breadth's. A prerequisite extension of this paper is to utilize a clustering method among different external sources acting as a reference to codify a diversity index for measuring the new search scheme. Also, the effect of usage of each cluster on innovation is empirically illustrated. This paper suggests that the optimal hybrid search outlook in respect to innovation is built up by initially increasing diversity in search up to the downturn point and then shifting into usage of same source clusters without helping diversity. This analysis provides practitioners with additional insights for managing external sourcing strategies and leveraging innovativeness. |
| Keywords: | Search breadth,External search diversity,Search scope,Knowledge heterogeneity,Source clustering,Innovation performance |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:156&r= |
| By: | Julian Schwierzy; Robert Dehghan; Sebastian Schmidt; Elisa Rodepeter; Andreas Stoemmer; Kaan Uctum; Jan Kinne; David Lenz; Hanna Hottenrott |
| Abstract: | The diffusion of new technologies is crucial for the realization of social and economic returns to innovation. Tracking and mapping technology diffusion is, however, typically limited by the extent to which we can observe technology adoption. This study uses website texts to train a multilingual language model ensemble to map technology diffusion for the case of 3D printing. The study identifies relevant actors and their roles in the diffusion process. The results show that besides manufacturers, service provider, retailers, and information providers play an important role. The geographic distribution of adoption intensity suggests that regional 3D-printing intensity is driven by experienced lead users and the presence of technical universities. The overall adoption intensity varies by sector and firm size. These patterns indicate that the approach of using webAI provides a useful and novel tool for technology mapping which adds to existing measures based on patents or survey data. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.01125&r= |
| By: | Brancati, Emanuele (Sapienza University of Rome) |
| Abstract: | This paper takes advantage of the COVID-19 outbreak to explore the determinants of firms' R&D choices around an exogenous shock. We make use of unique panel data on 7,800 Italian companies between January 2020 –right before the pandemic– and March of the same year –amid lockdown policies. We then exploit the revision in firms' research plans within this short-time window to test the impact of deteriorating expectations and uncertainty on firms' R&D choices. Our results show a dramatic effect of firms' expectations about future market conditions. In this regard, internationalized and innovative companies, which were particularly suffering the onset of the crisis, display a significantly higher probability of discontinuing research plans. Beyond the role played by expectations, innovative characteristics already in place are found to critically shape firms' reactions to the general uncertainty. Two main patterns emerge from our analysis. On the one hand, there is a strong degree of persistence in R&D choices for a small set of innovators with substantial past expenditure in in-house research activities. On the other, the COVID-19 shock especially jeopardized R&D plans of firms that recently started new research programs or newly innovative companies. We interpret such results as evidence that preexisting sunk costs increase the persistence of R&D choices after uncertainty shocks. |
| Keywords: | firms, R&D, expectations, uncertainty, COVID-19 |
| JEL: | O3 D22 D84 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14889&r= |
| By: | Cigna, Simone; Vanessa.Gunnella; Quaglietti, Lucia |
| Abstract: | Global value chains (GVCs) have shaped the dynamics of globalisation in recent years. This paper reviews key concepts and tools to measure countries’ involvement in GVCs, explores recent trends and investigates the underlying drivers of GVC participation empirically. The analysis in the paper finds that in the last decade, GVCs have undergone an important transformation, with participation falling on the back of rising trade costs and the trade integration of some large emerging market economies slowing, while the role of recent technological developments remains unclear. In addition, supply chains appear to have become increasingly regional over time. The paper also offers an insight into the role of production chain linkages in the transmission of recent global shocks across countries, uncovering important amplification effects on trade and activity. Finally, it discusses future prospects for GVCs and global trade, including in the light of developments associated with the coronavirus pandemic. JEL Classification: F13, F14, F15, F23, F62 |
| Keywords: | COVID-19, globalisation, global value chains, gravity equation, trade slowdown |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2022289&r= |