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on Innovation |
| By: | Losacker, Sebastian (Justus Liebig University Giessen); Befort, Nicolas (NEOMA Business School); Kriesch, Lukas (Justus Liebig University Giessen); Lhuillery , Stephane (NEOMA Business School) |
| Abstract: | National governments worldwide have implemented strategies to transition towards biobased economies, primarily driven by technological progress. However, how this transition unfolds at the regional level remains under-researched. This paper aims to uncover regional trajectories towards a bioeconomy with a focus on bio-based technologies. We build on the geography of innovation literature and show that potential pathways towards regional bioeconomies are very heterogeneous, thus requiring place-based policy strategies to advance the bioeconomy and its innovations. Empirically, the paper combines two unique patent datasets to reveal how the bioeconomy patent portfolio of 617 regions from 27 OECD countries has changed from 1982 to 2014. We utilize geographical sequence analysis, a novel tool recently introduced to geographical research, and shift-share techniques to categorize and better understand the regional trajectories. |
| Keywords: | Bioeconomy; Sequence Analysis; Geography of Innovation; Sustainability Transitions |
| JEL: | O31 R11 R12 |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_021 |
| By: | Christian Chacua (Harvard's Growth Lab); Shreyas Gadgin Matha; Matte Hartog (Center for International Development at Harvard University); Ricardo Hausmann (Harvard's Growth Lab); Muhammed A. Yildirim (Center for International Development at Harvard University) |
| Abstract: | Technological know-how in a country shapes its growth potential and competitiveness. Scientific publications, patents, and international trade data offer complementary insights into how ideas from science, technology, and production evolve, combine, and are transformed into capabilities. Analyzing their trajectories enables a more comprehensive and multifaceted understanding of the whole innovation process, from generating ideas to internationally commercializing products. We analyze the production patterns in these three domains, documenting the differences between advanced and emerging market economies. We find that future income, patenting, and publishing growth correlate with the economic complexity indices calculated from these domains. Capabilities embedded in the country also shape future diversification opportunities and make the innovation process path dependent. Lastly, we also show that diversification opportunities can be inferred across innovation domains. |
| Keywords: | economic complexity, innovation complexity, scientific complexity |
| JEL: | O25 O30 O38 F60 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:235 |
| By: | Meissner, Leonie P.; Peterson, Sonja; Semrau, Finn Ole |
| Abstract: | In a race against global warming, the world must accelerate the development and adoption of environmental innovations (EIs). In this literature review, we explore the role of governments in promoting EIs across stages of maturity and assess the potential to reduce emissions. Theoretical frameworks on market imperfections underline the necessity of governmental Research and Development (R&D) support. While emission pricing remains the most cost-efficient climate policy, it fails as a stand-alone instrument to sufficiently encourage EI. Overall, the optimal approach is a policy mix complementing emission pricing with governmental R&D support. The theoretical finding is backed by empirical studies on the developmentand deployment of renewable energies, which also show that investment in R&D can effectively reduce emissions. The review concludes by dissecting two pivotalpolicy initiatives, the US Inflation Reduction Act and the European Green New Deal Industrial Plan, evaluating their potential to effectively contribute to decarbonization. |
| Keywords: | green/eco-/environmental innovation, R&D support, climate policy, innovation policy |
| JEL: | O32 O38 Q54 Q55 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:306604 |
| By: | SCHWAAG SERGER Sylvia; RADOSEVIC Slavo |
| Abstract: | The evolving policy-making landscape demands a new conceptualization of the interaction between policy research and policy context. This is particularly crucial in the realm of transformative innovation policy, which involves a multitude of stakeholders and instruments in its formulation and execution. Moreover, the dynamics of both innovation and science for policy are shaped by the interplay of state, markets, and society, underscoring the need for a fresh and innovative approach. As the landscape of policy research and innovation policy continues to evolve, it becomes increasingly important to reevaluate the science for policy approach. This paper strongly advocates that policy research should no longer function in isolation as a single input into the policy-making process. Instead, it should be integrated as one of several inputs that collectively and iteratively shape innovation policy, thereby strengthening the core argument of the paper. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139533 |
| By: | Christian Chacua (Harvard's Growth Lab); Shreyas Gadgin Matha; Matte Hartog (Center for International Development at Harvard University); Ricardo Hausmann (Harvard's Growth Lab); Muhammed A. Yildirim (Center for International Development at Harvard University) |
| Abstract: | Recent geopolitical challenges have revived the implementation of industrial and innovation policies. Ongoing discussions focus on supporting cutting-edge industries and strategic technologies but hardly pay attention to their impact on economic growth. In light of this, we discuss the design of innovation policies to address current development challenges while considering the complex nature of productive activities. Our approach conceives economic development and technological progress as a process of accumulation and diversification of knowledge. This process is limited by the tacit nature of knowledge and by countries’ binding constraints to growth. Consequently, effective innovation policies should be place-based and multidimensional, leveraging countries’ existing capabilities and addressing countries’ current problems. This contrasts policies that lead to economic efficiencies, such as copying other countries’ solutions to problems that countries do not currently have. |
| Keywords: | innovation policy, industrial policy, economic complexity, knowhow |
| JEL: | O25 O30 O38 F60 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:234 |
| By: | Jo, Karam (Korea Development Institute); Kim, Seula (Pennsylvania State University) |
| Abstract: | We study how frictions in learning others' technology, termed "imperfect technology spillovers, " impact firm innovation strategies and the aggregate economy through changes in innovation composition. We develop an endogenous growth model that generates strategic innovation decisions, where multi-product firms improve their products via own-innovation and enter new product markets through creative destruction under learning frictions. In our model, firms with technological advantages intensify own-innovation as learning frictions enable them to protect their markets from competitors, thereby reducing creative destruction of rivals. This pattern gets more pronounced when competitive pressure increases exogenously. Using U.S. administrative firm-level data, we provide regression results supporting the model predictions. |
| Keywords: | innovation, technology spillover, endogenous growth, competition |
| JEL: | L11 L25 O31 O33 O41 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17581 |
| By: | Koski, Heli; Kuosmanen, Natalia; Kuusi, Tero |
| Abstract: | Abstract This brief presents key findings from Etla’s “Innovation-Driven Pathways to Economic Growth” project, which deepen the understanding of the mechanisms behind innovation-driven growth and evaluate the role of innovation policy in promoting sustainable growth in Finland. The findings underscore the critical role of foreign inventors and skilled employees in driving innovation and economic renewal. Immigration of highly skilled individuals enhances knowledge and diversity, boosting the effectiveness of innovation policy measures, such as R&D subsidies. Fully realizing this potential requires the effective integration of foreign experts into research and innovation activities. Supporting the green transition simultaneously presents Finland with significant opportunities to strengthen its competitiveness. While Finland’s share of green production currently lags behind international leaders, the country’s industrial structure and high-tech expertise provide a solid foundation for growth. Effectively targeted R&D subsidies can boost productivity and improve societal welfare. Targeting support for high-innovation-capacity companies can accelerate structural economic reforms. However, policymakers must consider adjustment costs, which can reduce the impact of growth policies. |
| Keywords: | Innovations, Immigration, Productivity, Economic growth |
| JEL: | D23 F22 J61 O3 |
| Date: | 2024–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:147 |
| By: | Danial Lashkari; Jeremy Pearce |
| Abstract: | In a previous post, we provided evidence for a broad-based slowdown in productivity growth across industries and firms in the U.S. manufacturing sector starting in 2010. Since firms’ investment in research and development (R&D) for new technologies constitutes a central driver of productivity growth, in this post we ask if the observed slowdown in productivity may be due to a decline in R&D. We find that “R&D intensity” has been increasing at both the firm and industry level, even as productivity growth declines. This points to a decline in the effectiveness of R&D in generating productivity growth in U.S. manufacturing. |
| Keywords: | productivity; manufacturing; innovation; competition; economic growth |
| JEL: | O33 O40 |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:99374 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics); Johansson, Dan (Örebro University) |
| Abstract: | The neo-Schumpeterian growth models, which appeared in the early 1990s, have ostensibly reintroduced the entrepreneur into mainstream growth theory. However, we show that by ignoring genuine uncertainty and by assuming that profits follow an objectively true and ex ante known probability distribution, the entrepreneur is made redundant. Thus, the theory fails to exhaustively explain innovation, the role of ownership competence, profits, the function of financial markets, wealth and income distribution, and, ultimately, economic growth. These shortcomings risk leading to erroneous or overly narrow policy conclusions by overestimating the importance of supporting R&D investments. Rather, the presence of genuine uncertainty forms a fundamental theoretical basis for the importance of new venture creation as a source of innovation-driven growth; entrepreneurs must establish and expand firms to capture the subjectively perceived profit opportunities. Therefore, tax policy is decisive for the commercialization and dissemination of innovations by providing incentives to uncertainty-bearing, not only for entrepreneurs, but also for intrapreneurs and financiers taking an active part in the governance and development of firms based on innovations characterized by genuine uncertainty. Furthermore, taxation can distort the evolutionary selection of innovations and firms, for instance, by taxing owners and firms differently. |
| Keywords: | creative destruction, economic growth, entrepreneur, entrepreneurship policy, innovation, judgment, Knightian uncertainty |
| JEL: | B40 O10 O30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17577 |
| By: | Mr. Serhan Cevik; Sadhna Naik; Keyra Primus |
| Abstract: | European countries are lagging behind in productivity growth, with significant productivity gaps across industries. In this study, we use comparable industry-level data to explore the patterns and sources of total factor productivity (TFP) growth across 28 countries in Europe over the period 1995–2020. Our empirical results highlight four main points: (i) TFP growth is driven largely by the extent to which countries are involved in scientific and technological innovation as the leader country or benefiting from stronger knowledge spillovers; (ii) the technological gap is associated with TFP growth as countries move towards the technological frontier by adopting new innovations and technologies; (iii) increased investment in information and communications technology (ICT) capital and research and development (R&D) contributes significantly to higher TFP growth; and (iv)the impact of human capital tends to be stronger when a country is closer to the technological frontier. The core findings of this study call for policy measures and structural reforms to promote innovation and facilitate the diffusion of new and existing technologies across Europe. |
| Keywords: | Total factor productivity; technology; R&D; innovation; human capital; Europe |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/258 |
| By: | Maczulskij, Terhi |
| Abstract: | Abstract This study examines the relationship between immigration and firmlevel innovation in the Finnish manufacturing sector. The analysis leverages unique matched data, including employees’ immigration status, firm-level patenting, process and product innovation activities, and innovation inputs spanning the 2000–2018 period. To address the potential endogeneity of a firm’s immigrant employment, an instrumental variables approach is employed using the historical geographic distribution of immigrants in the region where the firm is located. The results reveal that an increase in immigrant employment positively influences process and product innovation, and skilled foreign knowledge boosts the number of patent applications. Additionally, immigration leads to reduced external R&D expenditures, indicating that immigrant workers may substitute outsourced innovation inputs. The study also finds no evidence that immigration adversely affects native workers’ employment in Finnish firms. By contrast, it may benefit natives with complementary skills. |
| Keywords: | Firm-level, Immigration, Innovation |
| JEL: | D22 F22 O30 |
| Date: | 2025–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:124 |
| By: | Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H. |
| Abstract: | This paper explores the long-term impact of air pollution on firm-level R&D human capital composition and innovation, as well as the strategies firms adopt to mitigate these effects. Using a spatial regression discontinuity design based on China’s Huai River heating policy and exploring a novel dataset with detailed information on firm-level R&D sector, we show that prolonged exposure to air pollution significantly reduces the proportion of R&D workers with advanced degrees, such as PhDs and master’s degrees. To counteract these challenges, firms in polluted areas increase their reliance on external strategies, such as acquiring technology and collaborating with universities, and adopt internal measures, including enhanced welfare subsidies for R&D staff and greater investment in experimental instruments. Despite these efforts, firms in polluted areas still produce lower R&D value compared to those in cleaner regions. Our results highlight the key importance of internal human capital in complementing external technological investments. |
| Keywords: | adaptive strategies, air pollution, firm value, innovation, R&D human capital composition |
| Date: | 2024–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2428 |
| By: | MARIOTTI Ilaria; SASSO Simone (European Commission - JRC) |
| Abstract: | The European Commission has increasingly highlighted the importance of fostering conditions that support the emergence and flourishing of innovation and entrepreneurship across all regions. The Long-Term Vision for EU’s Rural Areas recognises the key role that innovation can play in revitalising these territories and transforming them into places of opportunity, while the New European Innovation Agenda emphasises the need to accelerate and strengthen innovation across the EU and thereby address the existing territorial innovation divide. This report, which is part of the Startup Village Forum’s research activities, analyses successful initiatives, supported by public policies or private efforts, which focus on attracting, training or retaining human capital to bolster entrepreneurial and innovation ecosystems in European non-urban areas. The analyzed initiatives - selected for their sustainability, resilience, replicability, inclusivity, cohesiveness, and urban-rural networks - have been promoted by public actors in Ireland (Connected Hubs), Spain (RAISE Youth) and Sweden (Lärcentrum), and by private ones in Portugal (Rural Move) and Italy (Incubatore SEI). They vary widely in terms of their typology, objectives, operational approaches, target groups, services provided, and implementation periods. They leverage urban-rural networks, thus enhancing brain circulation and brain bank. The countries hosting these initiatives present a heterogeneous distribution of tertiary education across cities, towns and suburbs, and rural areas, highlighting a north-south divide. The study shows that all the initiatives have been supported by urban-rural networks and have enhanced the inclusiveness of people coming from outside the area. Additionally, it reveals that key elements for their success, apart from the participation in urban-rural networks, include close collaboration with higher educational institutions, engagement with public institutions, and robust political support across different tiers of government. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc138968 |
| By: | Schubert, Torben; Darold, Denilton; Will, Markus |
| Abstract: | How to estimate the economic returns of public science is a longstanding but equally challenging topic in quantitative science studies. In this paper, we exploit the staggered foundation of the SENAI Innovation Institutes (ISI) in Brazil since 2012, to estimate their effects on GDP using a difference-in-differences (DiD) approach. Building on historical and institutional insights from interviews on the foundation process, we unravel the conditions under which the parallel trends assumption is likely to hold. Our analysis reveals that these institutes significantly contribute to GDP per capita, with an average treatment effect of 985 BRL (approximately €160). Moreover, by relying on detailed project-level data, we were able to show that the effects come almost exclusively from genuine research projects and not from the provision of scientific services, such as metrology. Finally, tentative calculations suggest that the SENAI institutes may account for about 0.66% of Brazil's overall GDP, emphasising the importance of applied science in regional economic development and providing insights into effective collaboration between research and industry. |
| Keywords: | SENAI ISI, public research, economic effects, GDP per capita |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisidp:307604 |
| By: | Beckert, Bernd; Kroll, Henning |
| Abstract: | In the race for international leadership in the field of artificial intelligence, China has been in first place for years - both in terms of the number of AI research contributions and of citations. Since the publication of ChatGPT at the end of 2022 at the latest, this contradicts the general impression that the main AI innovations are currently coming from the USA rather than China, as well as the general assessment that German and European research is also making important contributions to the AI development. One reason for this divergence is the fact that AI is a very heterogeneous field of research and innovation that consists of different technologies, methods and applications. A standardized definition does not yet exist. However, adequate research field definitions are essential for country comparisons based on bibliometric and patent analyses. (...) |
| Abstract: | Im Wettlauf um die internationale Führungsrolle im Bereich "Künstliche Intelligenz" liegt China seit Jahren auf Platz 1 - und zwar sowohl im Hinblick auf die Anzahl der KI-Forschungsbeiträge als auch bei den Zitationen. Dies widerspricht spätestens seit der Veröffentlichung von ChatGPT Ende 2022 dem generellen Eindruck, dass die wesentlichen KI-Innovationen derzeit nicht aus China, sondern aus den USA kommen sowie der allgemeinen Einschätzung, dass auch die deutsche und europäische Forschung wichtige Beiträge zur KI-Entwicklung liefern. Ein Grund für dieses Auseinanderklaf- fen ist die Tatsache, dass KI ein sehr heterogenes Forschungs- und Innovationsfeld ist, das aus verschiedenen Technologien, Methoden und Anwendungen besteht. Eine einheitliche Definition gibt es bisher nicht. Für Ländervergleiche, die auf bibliometrischen Analysen und auf Patentauswertungen basieren, sind adäquate Forschungsfelddefinitionen aber essentiell. (...) |
| Keywords: | Definition of artificial intelligence, bibliometric delineation, advanced AI, country comparisons, AI models, AI research, application of AI, quantitative analysis of different methods to identify AI-relevant research |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisidp:307605 |
| By: | Tani , Massimiliano (University of New South Wales); Avendano, Rolando (Asian Development Bank); Tolin, Lovely (Asian Development Bank) |
| Abstract: | In this paper, we examine whether, and if so how, an economy’s deliberate policy choices of regional cooperation and integration influence underlying determinants of economic growth. Building on models of growth and innovation, we analyze the role of regional integration on labor productivity and firms’ probability to innovate using data from a panel of 170 economies and 60, 000 firms over a period of two decades. Our results suggest that regionalism, as captured by metrics of regional cooperation and integration, can positively contribute to labor productivity and innovation, in addition to known factors of production. |
| Keywords: | regional integration; productivity; innovation; Asia |
| JEL: | F02 F15 O30 O40 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0760 |
| By: | Peede, Lennert (Institute for Employment Research (IAB), Nuremberg, Germany); Stops, Michael (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "We study how artificial intelligence (AI) affects labour demand at the establishment level. We use the share of AI related vacancy postings at the establishment level to measure efforts to develop, implement or use AI technologies. Low overall AI vacancy shares show that we study a phase of early AI adoption. At the establishment level, the AI vacancy share relates to a small reduction in those skills which are not related to AI technologies. We further find no effects on overall employment growth but slightly higher employment growth in jobs for highly skilled workers." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Kompetenzprofil ; Beschäftigungseffekte ; Betrieb ; Entwicklung ; Jobbörse ; künstliche Intelligenz ; Anwendung ; Qualifikationsanforderungen ; IAB-Stellenerhebung ; Stellenanzeige ; Stellenausschreibung ; Arbeitskräftenachfrage ; 2015-2019 |
| JEL: | E23 J24 J63 O33 |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202415 |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Nilsen, Trond (Inland Norway University of Applied Sciences) |
| Abstract: | Recent studies provide insights about local agency in regional development. While acknowledging non-local actors and drivers, these studies have not systematically discussed the link between extra-regional relations and local agency. This paper first discusses three key arguments in the literature on extra-regional relations covering context-specific dependencies, strategic coupling, and open innovation. It then proposes a theoretically informed typology linking extra-regional relations and local agency. The typology considers whether local actors can influence the extra-regional relation, and whether global actors are engaged locally. The discussion shows that the resulting four types relations enable or constrain local agency in different ways, which call for tailored regional development work to build local agency and widen regional opportunity spaces. |
| Keywords: | Local agency; regional development; extra-regional relations; multi-scalar perspectives |
| JEL: | F60 R10 R11 R58 |
| Date: | 2024–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_019 |
| By: | Baumgartinger-Seiringer, Simon (HEC Montréal); Shearmur, Richard (McGill University); Doloreux, David (HEC Montréal); Gauthier, Amélie (HEC Montréal) |
| Abstract: | Amid growing geopolitical tensions and supply chain fragilities, many countries adopt new industrial policies aimed at reshoring strategic industries. Simultaneously, rising awareness of the link between feelings of disenfranchisement and regional development levels underscores the strategic importance of intra-national industrial location. Within this context, we propose the concept of Strategic Regional Path Development, understood as a mechanism for (supra-) national industrial capacity-building based on top-down government interventions. Testing the framework using a semiconductor innovation zone in Québec as a case study, we conclude that success depends on aligning expectations and reconciling perspectives on its purpose across policymaking levels and involved actors. |
| Keywords: | new path development; new industrial policies; geo-politics; reshoring; regional inequality; left-behind places |
| JEL: | L52 O33 R11 R58 |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_020 |