Knowledge investments, business R&D and innovativeness of countries: A qualitative meta-analytic comparison

The relationship between knowledge investments, innovation and competitiveness is an important topic in both academic research and economic policy and has been studied extensively over the past decades. Nowadays, investments in private and public R&D are believed to make up the heart of a modern knowledge economy. The present paper adopts an evolutionary economics perspective and investigates whether, in addition to private R&D activities, also institutional support systems and policy interventions play a role in inducing innovation initiatives and creating impacts on the performance and competitiveness of industries. We aim to find support for the hypothesis that the competitiveness of industries in the international arena is sustained by the dynamic interaction between national, regional and sectoral innovation systems. This may provide stakeholders with a better understanding of the context in which they operate. Since according to the evolutionary metaphor, the growth of an innovation system follows complex dynamics that cannot simply be analysed within a static quantitative equilibrium framework, we use here an alternative approach based on qualitative pattern recognition analysis originating from artificial intelligence analysis. Besides R&D expenditures, human capital expenditures are regarded as the major input in the knowledge creation process in our analytical framework. To this end, in our paper a qualitative causal model that maps out conditional relations between key factors in national innovation systems will be described. The focus of our investigation is on systematic patterns in the competitiveness of the EU Member States, using statistical information on innovation input and output data from the European Innovation Scoreboard. In our analysis we find support for the hypothesis that there are indeed significant interactions between distinct institutional levels, which may provide guidance to the strategic orientation of nations and the European Union in terms of the emphasis on competitiveness vis-à-vis cohesion.     

Innovation policy in China: nationally promulgated but locally implemented

In China, policies are often announced at the national level but implemented locally. Innovation policies are no exceptions. This article studies China’s 50% R&D tax deduction policy, a key innovation policy promulgated by the central government in 2006. We find that the degree to which the policy was implemented during the period of 2006–2009 varied across the provinces and industries, which in turn had significant impacts on local firms’ innovation output. The findings of the heterogeneity in local implementation of national innovation policies are of important implications for both policy makers and innovation scholars.     

Revisiting measure of R&D spillovers: empirical evidence on OECD countries and industries

Using data for 17 Organisation for Economic Co-operation and Development (OECD) countries over 29 years for 28 industries, this paper estimates industry-wise research and development (R&D) spillovers from the largest R&D investors and the most R&D-intensive industries that contribute 80% of global R&D. In doing so, it tests several assumptions made in the literature, and data rejecting them, proposes a methodology on R&D return estimation devoid of these assumptions. Results show that R&D has substantial spillovers, justifying R&D support policy. Each dollar of R&D generates about 29 cents in spillovers domestically and 4 cents in foreign countries. However, both intra- and inter-industry spillovers vary by industries, implying that the policy of supporting each R&D dollar uniformly across industries is suboptimal. Contrary to industry heterogeneity, the R&D spillovers from an industry do not vary substantially across countries, suggesting that optimal R&D policy across OECD countries might be uniform. An industry-by-industry technology matrix shows that sometimes an idea generates a greater impact on other industries than where it is generated.     

Marketing and persistent innovation success

Despite their critical roles in innovation success, marketing activities are overlooked when the sources of innovation persistence are considered. Using three waves of the French Community innovation survey covering the period 2002–2008, this paper investigates the influence of marketing activities on innovation success and in particular on persistent innovation success in high-tech industries. Our results confirm that innovation success depends on past innovation success. Innovation marketing does not positively influence persistent innovation success in low-tech industries. The dynamic of innovation marketing is found to be more complex in high-tech industries: innovation marketing positively influences persistent innovation success for incremental innovation but negatively influences it for radical innovation. We therefore provide support to the existing literature on ambidextrous organizations which, for the most part, associate incremental innovation success with marketing and radical innovation success with R&D resources. Innovation marketing also impacts innovation success over the short term. However, there is no evidence of a positive carry-over effect from innovation marketing activities over time (short or long term). The results regarding the short-term effects of innovation marketing activities mainly hold for low-tech industries.     

What is the systems perspective to Innovation and Technology Policy(ITP) and how can we apply it to developing and newly industrialized economies?

Despite recent advances in the Evolutionary and Systems Perspectives to Economic Change (SI), confusion still exists about how to apply it to the design and implementation of Innovation & Technology Policy (ITP) in concrete settings. Since the ‘Normative’ aspects of SI are framed in terms so general to make them insufficient or inadequate as guides and tools for actual policymaking, a presumption exists that additional theoretical and conceptual knowledge is required. Thus a major objective of this paper is to contribute to the development of a realistic and ‘grounded’ theoretical framework for Technology and Innovation Policy which is particularly relevant both for the promotion of Business Sector R&D and of hi tech (especially IT) industries in Top Tier and other Industrializing Economies. A second objective is to contribute directly to the capability of successfully applying this conceptual framework in concrete policy settings. Rather than justifying ITP the paper focuses on characterising and applying “Salient Normative Principles or Themes” of the SI perspective to ITP. Several concrete examples are given and the notions of Policy Process, (Country) Program Portfolio Profile and Policy Environment are introduced.     

Productivity and R&D sources: evidence for Catalan firms

This paper draws on a sample of innovative Catalan firms to identify how two main sources of innovation – internal R&D and external R&D acquisition – affect productivity in the manufacturing and service industries. The sample comprises 1612 innovative firms from the fourth European Community Innovation Survey (CIS-4) during the period 2002–2004. We compare empirical results when applying the usual OLS and quantile regression techniques controlling with a non-parametric sample selection. Our results indicate the different patterns that are attributable to the two sources of innovation as we move up from lower to higher conditional quantiles. First, the marginal effect of internal R&D on productivity decreased as we moved up to higher productivity levels. Second, the marginal effect of external R&D acquisition increased as we moved up to higher productivity levels. Finally, empirical results show significant complementarities between internal and external R&D, which are higher for knowledge-intensive service sectors.     

Merger policy in innovative industries

We analyze optimal merger policy in R&D-intensive industries with product innovation aiming to improve the quality of products. Our results suggest that a permissive merger policy is rarely optimal in high-tech industries when the antitrust authority considers a welfare standard that balances the impact of mergers on consumers’ surplus and firms’ profits. In particular, relative to a benchmark where the effects from R&D are absent, we show that the optimal merger policy should not be substantially more permissive in the presence of those effects from R&D.     

Technological convergence, R&D, trade and productivity growth

This paper analyses productivity growth in a panel of 14 United Kingdom manufacturing industries since 1970. Innovation and technology transfer provide two potential sources of productivity growth for a country behind the technological frontier. We examine the roles played by research and development (R&D), international trade, and human capital in stimulating each source of productivity growth. Technology transfer is statistically significant and quantitatively important. While R&D raises rates of innovation, international trade enhances the speed of technology transfer. Human capital primarily affects output through private rates of return (captured in our index of labour quality) rather than measured TFP.     

An investigation over inbound open innovation in SMEs: insights from an Italian manufacturing sample

ABSTRACT

Building on the Open Innovation (OI) framework, the purpose of this paper is to examine the R&D inbound model of small and medium enterprises (SMEs). Specifically, we focus on the impact of different horizontal R&D collaborations on product innovation and innovation performance. Hypotheses are tested using a Probit/Tobit regression on an Italian sample of 2591 manufacturing SMEs. Our analysis shows that collaborating with different horizontal R&D partners brings to different innovation outcomes. In particular, R&D collaboration with universities has a positive impact on product innovation, but not on innovation performance. Whereas, R&D collaboration with research centres and other private companies has a positive impact on both product innovation and innovation performance. Our findings provide implications for SMEs managers and entrepreneurs who have to decide between R&D partners for their innovation strategy. Avenues for future research are discussed.     

Measuring innovation in long product development cycle industries: an insight in biotechnology

This paper examines and measures innovation in the context of biotechnology firms by analysing the link between R&D, innovation performance and organisational growth. We conceptualise innovation performance as a latent construct with two dimensions: innovation efficacy and innovation efficiency. We use structural equations modelling to test the hypotheses on a data set from the biotechnology industry. Results support our innovation performance conceptualisation which is found to be especially useful to measure innovation in industries with long product development cycles. Findings also underline the importance of R&D knowledge creation for biotechnology firms.     

Types of cooperation partners as determinants of innovation failures

In this paper we analyse if specific R&D cooperation partners are related to an increase in the probability of innovation failures in terms discontinuing innovation projects. We distinguish between seven different R&D cooperation partner types, and we discriminate between product innovation failures and process innovation failures. Using German Community Innovation Survey data we find that, firstly, each type of R&D cooperation partner has a different effect on innovation failures. Secondly, we show that product innovation failures and process innovation failures are not affected in equal measure by the same type of R&D cooperation partner. Our results suggest that while R&D cooperation with public research institutes is significantly and negatively related to the probability to cancel a process innovation project, the coefficient is positive but insignificant for product innovation failures. Firms conducting partnerships with suppliers, however, run the risk of both product and process innovation failures. In turn, cooperation with competitors is positively correlated only to process innovation failures.     

On the economic performance of nascent entrepreneurs

This paper assesses the R&D performance of nascent and established technology-based small firms that receive a Phase II R&D award from the U.S. Small Business Innovation Research (SBIR) program. Our empirical analysis is based on a two-stage selection probit model, which is used to estimate the probability of commercialization conditional on the Phase II project having not failed. Our model predicts, and our analysis confirms, that nascent firms are more likely to fail in their SBIR-supported R&D endeavors. Further, we find that nascent firms that do not fail have a higher probability of commercializing their developed technology.     

Optimal patent length and breadth in an economy with creative destruction and non-diversifiable risk

In this paper, I examine the optimal patent shape in an economy in which R&D firms innovate and imitate, households face non-diversifiable risk and there is externality in production and R&D. With non-diversifiable risk, a household’s consumption and investment decisions are interlinked. This economy contains industries of two kinds: monopoly industries with an innovator only, and duopoly industries with an innovator and an imitator. I define patent length as the expected time in which an innovation is imitated, and patent breadth as the innovator’s profit share in an industry after a successful imitation. The government can control patent length by the requirements for accepting a substitute for a patented good, and patent breadth by imposing compulsory licensing and royalties for the patentee after a successful imitation. I show that the stronger the externality in production relative to R&D is, the slower the optimal growth rate, the larger the optimal proportion of duopoly industries, and the longer and narrower the optimal patent.     

Industrial innovation and governmental policy: A review and proposal based on observation of the U.S. electronic sector

The U.S. electronics sector has been particularly successful at technological innovation since the 1940s. This paper addresses governmental policies that influence the process of technological innovation, drawing on aspects of the history of the electronics sector. Three topics receive particular attention—(1) uncertainties, ideas, and imperfect appropriability, (2) returns to R&D and associated investments, and (3) competition and selection environments. As a foundation for this discussion, several conceptual frameworks are briefly described and some classifications for innovation are explored, i.e., by importance (basic/improvement), by locus of change (process/product), by area of application (peaceful/dangerous), by locus of choice (private/public), and by value (worthwhile/not worthwhile). The discussion is underscored by the observation that better links between conceptual understanding and policy formulation are needed in order to derive practical insights into useful actions. One specific policy recommendation is tendered: an income tax credit on earnings of all employees (including salaried staff and managers) of R&D intensive firms. Such a policy would be appropriate from the standpoint of the topics outlined above (i.e., uncertainties, returns to R&D, and competition); the policy would also delegate responsibility for effective use of the subsidy to the employees and firms affected and would directly acknowledge and reward the contributions of individuals—whether in R&D, production, marketing, or support areas—to the innovative capabilities of their firms and the society at large.     

MAJOR SOURCES OF PRODUCTION IMPROVEMENT AND INNOVATION GROWTH IN CHINESE ENTERPRISES

Abstract.  Using a data set based on a cross-sectional firm level survey conducted by the World Bank in year 2001, in this paper we investigate the major sources of production improvement and innovation growth of Chinese enterprises from ten major industries and five major cities. In terms of production improvement, the production network, R&D and innovation and openness are the crucial factors; and in terms of innovation growth, it could be enhanced through raising R&D inputs, training, improving managers' education, outsourcing and participating in a production network.     

Timing of innovation policies when carbon emissions are restricted: An applied general equilibrium analysis

This paper studies the timing of subsidies for emissions-saving research and development (R&D) and how innovation policy is influenced by a carbon tax. We develop a dynamic computable general equilibrium (CGE) model with both general R&D and specific emissions-saving R&D. We find two results that are important when subsidizing emissions-saving R&D in order to target inefficiencies in the research markets. First, the welfare gain from subsidies is larger when the carbon tax is high. This is because a high carbon tax raises the social value of the emissions-saving technology and that this increase in value is not fully appropriated by the private firms. Secondly, the welfare gain is greater when there is a falling time profile of the rate of subsidies for emissions-saving R&D, rather than a constant or increasing profile. The reason is that knowledge spillovers are larger in early periods.     

Innovation and the competitiveness of industries: Comparing the mainstream and the evolutionary approaches

The study of the relationships between innovation and the competitiveness of industries is an important topic for both, academic research and economic policy. The huge economics literature flourished in the last couple of decades on the subject broadly falls into two distinct research traditions, namely the mainstream R&D spillovers approach and the evolutionary economics view. Both traditions agree on the important role played by innovation and the inter-sectoral diffusion of advanced knowledge for the competitive performance of industrial sectors. Behind this general agreement, however, the two approaches are radically different. This paper shows that, at a deeper level of analysis, the mainstream and evolutionary views do indeed differ with respect to their theoretical foundations, empirical research and policy implications. In a nutshell, while the mainstream R&D spillover approach is inspired by a traditional view of economic policy based on a market-oriented approach, the evolutionary view is on the contrary consistent with the idea that institutional arrangements and policy interventions do indeed play a fundamental role for shaping innovation patterns and their impacts on the competitiveness of industries.     

Research and development and trade policies for product innovation in the presence of foreign competition

This paper examines two policy instruments — a matching grant and import tariffs — for encouraging research and development (R&D) in product innovation by a domestic firm when it faces foreign competition. We do so by developing a theoretical model of product innovation where R&D effort is endogenous and its outcome uncertain. We examine the effects of a reduction in import tariffs on private expenditure on R&D, on public support for such R&D, and on total R&D expenditure. We find that in response to a reduction in import tariffs, the domestic firm always reduces its private R&D investments, but the total level of R&D expenditure (i.e., including public support) might go up depending on the level of tariffs. In particular, we find that it will go up if the initial level of tariff is higher than a critical level. When tariff is endogenous, we find that the socially optimal level of tariffs is positive. One finding that is of particular interest is that supporting private attempts to product innovate in the form of a matching grant program leads to a socially optimal level of product R&D.     

创新科技政策作用要素及其响应研究述评

从定义、目标、特点、内容、受体、功能、工具、要素的角度,对创新科技政策、创新政策、科学政策、技术政策进行了对比,指出创新科技政策更能对企业的技术研发创新给予引导、规范和扶持。梳理了创新科技政策的作用要素及其作用路径,并归纳出企业响应创新科技政策的4个机制。     

Does partner type matter in R&D collaboration for product innovation?

Most firms tend to utilise various types of R&D collaboration partners simultaneously and partnerships between different types of partners show different properties. Thus, the effect of R&D collaboration may vary depending on partner types. This study considers four partner types: competitors, customers, suppliers and universities. It empirically examines the effect of R&D collaboration with each type of partner on product innovation, employing the Korean Innovation Survey data. Results show that R&D collaborations with customers and universities have a positive effect on product innovation, whereas R&D collaborations with suppliers and competitors have an inverted-U shape relationship with product innovation. This result can provide an explanation to the chaotic results of previous research and assist managers in selecting appropriate R&D partner.