How Today's Consumers Perceive Tomorrow's Smart Products*

This paper investigates consumer responses to new smart products. Due to the application of information technology, smart products are able to collect, process, and produce information and can be described as “thinking” for themselves. In this study, 184 consumers respond to smart products that are characterized by two different combinations of smartness dimensions. One group of products shows the smartness dimensions of autonomy, adaptability, and reactivity. Another group of smart products are multifunctional and able to cooperate with other products. Consumer responses to these smart products are measured in terms of the innovation attributes of relative advantage, compatibility, observability, complexity, and perceived risk. The study shows that products with higher levels of smartness are perceived to have both advantages and disadvantages. Higher levels of product smartness are mainly associated with higher levels of observability and perceived risk. The effects of product smartness on relative advantage, compatibility, and complexity vary across product smartness dimensions and across product categories. For example, higher levels of product autonomy are perceived as increasingly advantageous whereas a high level of multifunctionality is perceived disadvantageous. The paper discusses the advantages and pitfalls for each of the five product smartness dimensions and their implications for new product development and concludes with a discussion of the limitations of the study and suggestions for further research.     

Tax reform,capital allocation and welfare gains in Norway

Summary This paper analyzes the potential welfare gains to the Norwegian economy of implementing a tax reform that broadens the tax base and lowers tax rates on capital income. For this purpose a dynamic general equilibrium model where agents have perfect foresight is developed. The model is highly aggregate, with only one production sector and one household sector, but it incorporates a very detailed treatment of the taxation of capital income. This includes a two-way classification of capital assets into three ownership classes: corporate, non-corporate and household, and across two types of assets: long-lived and short-lived. This suffices to capture those elements of the Norwegian tax code that give rise to the most important distortions, both intratemporally and intertemporally.I have benefited greatly from detailed comments from Don Fullerton, A. Lans Bovenberg and an anonymous referee. Please direct all correspondence to the author to: Fiscal Affairs Department, International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431.     

Reducing the Number of Pesticide- Related Illnesses: The Impact on Household Incomes in Indonesia

The increasing number of human health problems caused by the use of pesticides serves as a warning to countries to develop preventive programs Developing countries, however, are concerned about the effect of such programs on household incomes. With Indonesia as a case study, this paper presents a procedure to broaden a Social Accounting Matrix to include the impact of agricultural pesticide use on human health This approach utilises the Constrained Fixed Price Multiplier method to analyse the effect, on the household incomes of different socio-economic classes, of government programs that are designed to reduce human pesticide-related illnesses The results show that reducing such illnesses through the Safe Use of Pesticides program or the Integrated Pest Management program induces a more equal income distribution.     

The politics of Europe 2004: solidarity and integration

The process of European integration has reached the limits of European solidarity—both within the member states and between them. Increasingly, Europeans are demonstrating reluctance to accept common rules, to recognise common values, to protect common interests, or to promote common objectives. Instead, Europeans appear to be expressing many different and yet interrelated forms of disaffection. Voter abstention is high, security cooperation is weak, economic confidence is low, and support for either European enlargement or institutional reform is vanishing. To respond to this crisis, European politicians need to manage expectations better, they need to accept responsibility for public policy problems, they need to explain the limits of what Europe can do, and they need to search for new formulas to meet different national challenges with common European institutions.     

Industrial Companies' Evaluation Criteria in New Product Development Gates

This article presents the results of a study on the evaluation criteria that companies use at several gates in the NPD process. The findings from 166 managers suggest that companies use different criteria at different NPD evaluation gates. While such criteria as technical feasibility, intuition and market potential are stressed in the early‐screening gates of the NPD process, a focus on product performance, quality, and staying within the development budget are considered of paramount importance after the product has been developed. During and after commercialization, customer acceptance and satisfaction and unit sales are primary considerations. In addition, based on the performance dimensions developed by Griffin and Page (1993), we derive patterns of use of various evaluative dimensions at the NPD gates. Our results show that while the market acceptance dimension permeates evaluation at all the gates in the NPD process, the financial dimension is especially important during the business analysis gate and after‐market launch. The product performance dimension figures strongly in the product and market testing gates. The importance of our additional set of criteria (i.e., product uniqueness, market potential, market chance, technical feasibility, and intuition) decreases as the NPD process unfolds. Overall the above pattern of dimensions' usage holds true for both countries in which we collected our data, and across firms of different sizes, holding different market share positions, with different NPD drivers, following different innovation strategies, and developing different types of new products. The results also are stable for respondents that differ in terms of expertise and functional background. The results of this study provide useful guidelines for project selection and evaluation purposes and therefore can be helpful for effective investment decision‐making at gate‐meetings and for project portfolio management. We elaborate on these guidelines for product developers and marketers wishing to employ evaluation criteria in their NPD gates, and we discuss directions for further research.     

Strategies for best practice in research and technology institutes: an overview of a benchmarking exercise

Many technology institutes have been criticised for their dislocation from, or lack of relevance to, industry. This paper provides an overview of a major benchmaking study which analyzed in depth the most successful technology institutes from eight nations (four in Europe and four in East Asia). Institutes selected for study met a criterion which included a combination of dynamism, relevance to industry, contribution to the national science and technology infrastructure, independent fund-raising capability, innovative organizational structures, and effective management. The paper examines the activities engaged in by the eight institutes, the principal challenges they face, and identifies the main success factors underlying their achievements. The paper attempts to illustrate practical, best practice strategies by showing how leading technology institutes have successfully contributed to their national system of innovation. To this end, success factors have been categorized into those factors which are under the direct control of the institutes (internal), which are outside of their influence (external), and those which can be affected to a lesser or greater extent.     

Economic Integration: Systemic Measures in an Input–Output Framework

Countries are linked through trade and for their mutual benefits they often group together. Consequently, trade blocs are formed in some form or another, examples of which are the EU, EFTA, ASEAN, NAFTA, and SAARC. Depending upon the form and the nature of the grouping, trade relations among countries obviously vary across the trade blocs. The pattern and the volume of trade of the participating countries are different and thus cause different impacts on the growth and development of the countries concerned. Also, the nature of integration changes over time. To examine the strength of integration within trade blocs, systemic measures of integration hitherto not available are formulated in an input–output framework. The measures are used, as a case study, to assess the inter-temporal variations in the degree of integration of SAARC.     

Risk compensation in wages – a replication

We use data from Germany, The Netherlands, Portugal and Spain to test for the effect of earnings variation on individual earnings. We replicate estimates for the USA and find that the variance of earnings in an occupation affects individual wages positively while the skewness of earnings has a negative effect. Both results are in conformity with wage compensation for risk averse workers. First version received: March 2001/Final version received: July 2002 We are grateful to two anonymous referees for valuable comments.