From priority-setting to articulation of demand: Foresight for research and innovation policy and strategy

The paper addresses the application of foresight to research and innovation policy and strategy. It seeks to show an evolution away from a traditional focus on broad-based technological priority setting to a much more focussed and adapted set of applications. The inherent limitations of prioritisation processes are discussed. The more limited aim of articulating specific fields is noted. Recent trends in research and innovation policy have opened new opportunities for the application of foresight. Systemic and demand-side policies require a shared vision on the part of purchasers and suppliers. The role of foresight in such contexts needs both to be enhanced and better understood.An increasing structural focus for foresight exercises is associated not only with broader R&I system reform but also with an engagement with new-wave innovation policies. The success of demand-side measures such as cluster policies and the use of procurement or regulation to stimulate innovation is dependent upon the formation of a common vision between the supply and demand sides, opening the possibility for the application of foresight approaches. We note the emergence of a combination of corrective, disruptive and creative roles.     

Book Reviews

Ian Chalmers and Vedi R. Hadiz (eds) (1997), The Politics of Economic Development in Indonesia, Routledge, London, pp. xxx + 269. A$155.00.

Geoff Forrester (ed.) (1999), Post-Soeharto Indonesia: Renewal or Chaos? Institute of Southeast Asian Studies, Singapore, and KITLV Press, Leiden, pp. 373. Cloth: S$49.90/US$32.90; paper: S$29.95/US$19.95/A$29.95.

Corden, Max (1999), The Asian Crisis: Is There a Way Out?, Institute of Southeast Asian Studies, Singapore, pp. 82. S$19.90/US$12.90.

Karl D. Jackson (ed.) (1999), Asian Contagion: The Causes and Consequences of a Financial Crisis, Westview Press, Boulder CO, pp. xvi + 312. Cloth: US$75.00; Paper: US$30.00.

H.W. Arndt and Hal Hill (1999), Southeast Asia's Economic Crisis: Origins, Lessons and the Way Forward, Institute of Southeast Asian Studies, Singapore, pp. 192. Cloth: S$66.90/US$44.90; paper: S$28.00/US$17.90/A$29.95.

Manuel F. Montes (1998), The Currency Crisis in Southeast Asia: Update, Institute of Southeast Asian Studies, Singapore, pp. xl + 62. Cloth: S$36.00 /US$24.00; paper: S$25.90/US$17.90.     

Economics Research at the FTC: Information,Retrospectives, and Retailing

Individual Federal Trade Commission (FTC) cases invariably raise broad questions about consumers, markets, and effective enforcement policy. Recent consumer protection cases raise questions about information regulation. Horizontal merger enforcement has recently focused on retrospective analysis of mergers and the role of the retail sector in predicting the effects of manufacturer mergers. In this paper, we describe research by the FTCs Bureau of Economics that addresses these three areas. We argue that such research is well worth the agencys relatively small resource investment because it demonstrably contributes to more thoughtful policy analysis and better policy outcomes.     

Barriers to innovation through public procurement: A supplier perspective

Public procurement is increasingly viewed as having important potential to drive innovation. Despite this interest, numerous barriers prevent the public sector from acting as an intelligent and informed customer. This paper seeks to understand how barriers related to processes, competences, procedures and relationships in public procurement influence suppliers? ability to innovate and to reap the benefits of innovation. We address this by exploiting a dedicated survey of public sector suppliers in the UK, using a probit model to investigate the influence of structural, market and innovation determinants on suppliers? perception of these barriers.     

Do retail mergers affect competition? Evidence from grocery retailing

This study estimates the price effects of horizontal mergers in the U.S. grocery retailing industry. We examine fourteen regions affected by mergers, including mergers in highly concentrated and relatively unconcentrated markets. We identify price effects by comparing markets affected by mergers to unaffected markets using difference‐in‐difference estimation with three different comparison groups, propensity score weights, and by using the synthetic control method. Our results are robust to the choice of control group and estimation technique. We find that mergers in highly concentrated markets are most frequently associated with price increases, and mergers in less concentrated markets are most often associated with price decreases.     

Social Affiliation and the Demand for Health Services: Caste and Child Health in South India

This paper assesses the role of social affiliation, measured by caste, in shaping investments in child health. The special setting that we have chosen for the analysis - tea estates in the South Indian High Range - allows us to control nonparametrically for differences in income, access to health services, and patterns of morbidity across low caste and high caste households. In this controlled setting, low caste households spend more on their children's health than high caste households, reversing the pattern we would expect to find elsewhere in India. Moreover, health expenditures do not vary by gender within either caste group, in contrast once again with the male preference documented throughout the country. A simple explanation, based on differences in the returns to human capital across castes in the tea estates is proposed to explain these striking results.     

The reverse Cellophane fallacy in market delineation

In the landmark Cellophane case, the Supreme Court erroneously concluded that du Pont did not have significant market power because the Court evaluated the elasticity of demand for Cellophane at the monopoly equilibrium, at which the elasticity was far higher than at the competitive equilibrium. The Court's error is commonly referred to as the Cellophane fallacy. This paper contends that there also is a reverse Cellophane fallacy. Markets delineated on the basis of prevailing demand elasticities are likely to be too small and the potential for the exercise of market power is likely to be overstated.