Location choices within global innovation networks: the case of Europe

Rapid growth in internationalization of corporate R&D has spurred considerable interest since the 1990s. Foreign R&D is still mainly driven by the expansion of international production, but technology sourcing has become an increasingly important driver of dispersion. Actually, differences across sectors and companies tend to obscure the mix of motivations behind the development of global innovation networks. This paper distinguishes the various drivers of the international dispersion of corporate R&D in order to elaborate a typology of foreign R&D units, including in emerging countries. This typology is used to discuss the emergence of differentiated global innovation networks and the location choices by type of R&D unit. It is applied to foreign R&D projects in Europe in high and low cost countries between 2002 and 2005. It is then used to discuss the weakening attractiveness of the European Union for R&D activities and the relevant policies that countries can design to attract different types of units.

The survey of industrial R&;D—patent database link project

This article details the construction of a firm-year panel dataset combining the NBER patent dataset with the Survey of Industrial R&D conducted by the Census Bureau and National Science Foundation. The dataset constitutes a platform that offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the R&D survey. The files are linked through a name-matching algorithm customized for uniting the firm names to which patents are assigned with the firm names in the Census Bureau’s SSEL business registry. Through the Census Bureau’s file structure, R&D can be linked to the operating performances of each firm’s establishments, further facilitating innovation-to-productivity studies.

Internationalisation of R&D and embeddedness: the case of Austria

Internationalisation of corporate R&D—driven mainly by multinational enterprises (MNEs)—has received increasing interest recently. As a small open economy, Austria faces special challenges with regard to this on-going process. The share of Austrian R&D financed from abroad is outstanding in international comparison. Indeed, a significant portion of R&D activities in Austria is defined by strategic decisions of international corporations, which are re-assessing their spatial division of labour continuously. In our paper, we analyse the characteristics of these foreign-owned corporations in Austria and demonstrate that they form the more ‘modern’ part of Austrian industry. At the same time, we show that these companies and R&D facilities are embedded in the Austrian national innovation system (NIS) to a large extent. This embeddedness is also explicitly and implicitly supported by the Austrian technology policy. We conclude that this high degree of embeddedness in the NIS may be crucial for the sustainability of foreign-owned R&D facilities.

Geographic and technological R&;D spillovers within the triad: micro evidence from US patents

This paper aims at assessing the magnitude of R&D spillover effects on large international R&D companies’ productivity growth. In particular, we investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms. We also control for the firm’s ability to identify, assimilate and absorb the external knowledge stock. The results estimated by means of panel data econometric methods (system GMM) indicate a positive and significant impact of both types of R&D spillovers and of absorptive capacity on productivity performance.

Government strategies to attract R&D-intensive FDI

Competition among countries to attract the research and development (R&D) activities of multinational enterprises has increased substantially during the last years, but the strategies used by governments in this competition still remain largely unexplored. This paper addresses that gap by proposing a taxonomy of the policy instruments available to stimulate inward R&D-intensive foreign direct investment (FDI) and presenting the results of a comparative case study of two EU countries: Spain and Ireland. The main conclusion is that an efficient promotion of R&D-intensive FDI calls for a closer connection between innovation policy and inward investment promotion, which are two policy areas that have traditionally operated rather separately. In addition, investment promotion agencies targeting R&D-intensive FDI are advised to reconfigure the scope of services they provide by placing more emphasis on after-care, since R&D-intensive FDI tends to be evolutionary rather than purely greenfield.

Innovation-related data in bureau of economic analysis international economic surveys

This paper describes innovation-related data available from international economic surveys conducted by the U.S. Bureau of Economic Analysis. These data are collected in conjunction with the international transactions accounts of the United States and in surveys of the operations of multinational companies (MNCs). The paper focuses on five innovation-related series: receipts and payments of royalties and license fees; exports and imports of research, development, and testing services; sales of services by foreign affiliates classified in the research and development services industry; MNC R&D spending; and MNC R&D employment.

Tax incentives for innovation: time to restructure the R&;E tax credit

The R&E tax credit has never been effective and subsequent attempts to restructure it have not addressed the major deficiencies. Moreover, in the 25 years since the R&E tax credit was enacted, a steadily increasing number of countries have implemented or expanded competing tax incentives, which in many cases are better structured and larger in size. As a result, the relative impact of the US credit is now negative in terms of incentives to conduct R&D within the domestic economy. The inadequacy of the credit stems largely from its small size and its incremental format. The impact of an R&D tax incentive is affected by its scope of coverage, the ability of industry to take advantage of it over the entire R&D cycle, the magnitude of the incentive relative to other nations’ tax policies, and its ease of implementation. In the end, a tax incentive must sufficiently lower the user’s cost of R&D to overcome barriers to allocation of private-sector resources commensurate with the potential rates of return on such investments. As a policy instrument, a tax incentive for R&D should be most effective if its form is a flat rate applied to all R&D.

Research spending under regulatory uncertainty

Using a simple model this paper examines firm behavior under three types of uncertainties dealing with innovation occurrence, innovation scale, and a possible threat of regulatory action. Firms compete in the existing product market and engage in R&D in Stage I. Innovation takes place in the second stage, the successful firm achieves a monopoly and becomes aware of the scale of innovation. Regulators examine the new product and decide on possible action. Results show that increases in the probability of regulation reduce research spending as do higher regulatory taxes. These results are reversed when the regulator grants a subsidy, instead. An increase in the probability of drastic innovation increases research spending under certain conditions. The effect of market entry is unclear. Our results generally carry through when the model is extended to include only an innovation race or the nondrastic innovation is alternately regulated. Policy implications are discussed.

The economics of collective knowledge and technological communication

Technological knowledge can be understood as a collective good when it is the outcome of the integration between internal to the firm investments in R&D and learning and the absorption of competencies and technologies provided by external organizations (such as, other firms, universities, R&D centers). Technological communication is a crucial strategy in such dynamic interaction between the firm and the system. Only under effective conditions of technological communication the private and social benefits derived from the exploitation of spillovers are higher than the private losses due to partial inappropriability. The article presents a simple microeconomic framework to understand knowledge production and distribution, integrating the effects and conditions of technological communication within a knowledge production function. The interaction between internal investments in R&D and learning, partial inappropriability, the conditions for the access to external knowledge and the exploitation of spillovers explains increasing returns in the production of knowledge.

Creative internationalization: widening the perspectives on analysis and policy regarding international R&D activities

Internationalization in R&D is further growing; it is changing its geographical balance, as it is shifting somewhat to the Far East, and its nature, increasing the global quest for talent and good research conditions as well as for low cost R&D. This paper focuses on the European perspective, i.e. it discusses current challenges Europe faces vis-à-vis trends in industrial R&D, but the findings and arguments are more general ones. It argues that our perspective on internationalization is still shaped too much by a zero sum-rationale, whereby one location wins R&D capacity that another location loses. It develops a cost–benefit matrix in order to capture the overall costs and benefits of international R&D activities more broadly. The paper argues that more creativity is needed, that our perspective needs to be broadened to tackle all variables conditioning international activities in R&D (including local conditions of demand and discourse) and to stress the importance of the absorption of global knowledge by as many actors within an innovation system as possible. On the basis of recent survey data the paper furthermore concludes that public research should be thought of as a trans-national transmission belt of knowledge and as the prime factor that shapes the attractiveness and effectiveness of a location for business R&D. Finally, it is argued that policy schemes geared towards international R&D need to accept and tackle the issue of co-ordination of governance and to take advantage of the flexible possibilities offered at the European level, beyond the logic of the European Framework Programme.

Between market forces and knowledge based motives: the governance of defence innovation in the UK

The purpose of this contribution is to examine the evolutionary transformations that have characterised the UK defence innovation system since the mid 1980s. It focuses on the central and challenging issue faced by the Ministry of Defence (MoD) in implementing effective governance mechanisms emerging from the continuous trade-off between short-term market driven measures motivated by efficiency arguments, and more long term and relational considerations in terms of knowledge economics. Furthermore, in terms of technology transfer, this evolution has been accompanied by a gradual shift from an initial logic of spin-off to society expected from government driven military projects, to a logic of spin-in where the main concern of the military sector is to broaden its industrial and R&D base.

Advancing measures of innovation in the United States

This paper introduces major themes addressed in this special issue, which is based on NSF's Division of Science Resources Statistics (SRS) workshop Advancing Measures of Innovation—Knowledge Flows, Business Metrics, and Measurement Strategies, held on June 6-7, 2006 near Washington, D.C. The first two sections describe the workshop and provide a brief background on R & D and innovation metrics. The last section introduces the papers. They are based on selected workshop presentations along with additional invited papers.

Researching the use of force: the background to the international project

This article provides the background to an international project on use of force by the police that was carried out in seven countries. Force is often considered to be the defining characteristic of policing and much research has been conducted on the determinants, prevalence and control of the use of force, particularly in the United States. However, little work has looked at police officers’ own views on the use of force, in particular the way in which they justify it. Using a hypothetical encounter developed for this project, researchers in each country conducted focus groups with police officers in which they were encouraged to talk about the use of force. The results show interesting similarities and differences across countries and demonstrate the value of using this kind of research focus and methodology.

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Organisational change and innovation system dynamics: the reform of the UK government defence research establishments

Since the end of the Cold War, ministries of defence in Europe and the United States have sought new models for the management of government defence research laboratories. The United Kingdom’s reform and subsequent privatisation of its government defence research establishments (GDREs) represents one of the most radical policy responses. This paper considers the UK case through the lens of innovation systems theory and uses defence labs reform to examine the impact of organisational change on the dynamics of an innovation system. The potential policy implications for the management of government defence research laboratories are also considered.

Expanding the R&;E tax credit to drive innovation,competitiveness and prosperity

The research and experimentation (R&E) tax credit has long been the subject of criticism. Some argue that if the goal is more research and innovation, it’s better to increase direct federal funding of research. Others argue that the credit is not effective, that companies would do the research in any case. Some object the very notion of using tax policy to influence private sector behavior, preferring instead a more “neutral” tax code. Still others, including Tassey in this volume, point to what they see are a host of design flaws in the current credit, including that its incremental nature reduces its effectiveness. I will argue here that most of these arguments are mistaken. To promote innovation in a global economy both direct funding and indirect tax incentives are needed. The credit, while it can be improved, has been shown to be effective in stimulating research. Moreover, far from distorting the market, the credit corrects for a market failure where firms are unable to capture all of the benefits of corporate research, leading them to under invest in research. Finally, while reform and expansion are needed, it would be a mistake to shift to a completely flat credit. However, several important changes should be made including doubling the current value of the credit, modifying the Alternative Simplified Credit to become incremental, and expanding the flat credit for collaborative R&D.

Singing the same tune? International continuities and discontinuities in how police talk about using force

This article focuses on a research project conducted in six jurisdictions: England, The Netherlands, Germany, Australia, Venezuela, and Brazil. These societies are very different ethnically, socially, politically, economically, historically and have wildly different levels of crime. Their policing arrangements also differ significantly: how they are organised; how their officers are equipped and trained; what routine operating procedures they employ; whether they are armed; and much else besides. Most relevant for this research, they represent policing systems with wildly different levels of police shootings, Police in the two Latin American countries represented here have a justified reputation for the frequency with which they shoot people, whereas at the other extreme the police in England do not routinely carry firearms and rarely shoot anyone. To probe whether these differences are reflected in the way that officers talk about the use of force, police officers in these different jurisdictions were invited to discuss in focus groups a scenario in which police are thwarted in their attempt to arrest two youths (one of whom is a known local criminal) by the youths driving off with the police in pursuit, and concludes with the youths crashing their car and escaping in apparent possession of a gun, It might be expected that focus groups would prove starkly different, and indeed they were, but not in the way that might be expected. There was little difference in affirmation of normative and legal standards regarding the use of force. It was in how officers in different jurisdictions envisaged the circumstances in which the scenario took place that led Latin American officers to anticipate that they would shoot the suspects, whereas officers in the other jurisdictions had little expectation that they would open fire in the conditions as they imagined them to be.

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The innovative performance of foreign-owned enterprises in small open economies

This paper compares the innovative performance of foreign-owned and domestically owned enterprises in five European countries. We look at innovation inputs, outputs, and examine how strong foreign-owned enterprises are embedded in the innovations systems of their host countries. We find that foreign ownership is associated with similar levels of innovation input, but higher levels of innovation output and higher labour productivity compared to domestic ownership. In four of the five countries, affiliates of foreign multinationals show a similar or even a higher propensity to co-operate with domestic partners than domestically owned enterprises.

Thinking Critically About Rural Gender Relations: Toward a Rural Masculinity Crisis/Male Peer Support Model of Separation/Divorce Sexual Assault

After decades of neglect, a growing number of scholars have turned their attention to issues of crime and criminal justice in the rural context. Despite this improvement, rural crime research is underdeveloped theoretically, and is little informed by critical criminological perspectives. In this article, we introduce the broad tenets of a multi-level theory that links social and economic change to the reinforcement of rural patriarchy and male peer support, and in turn, how they are linked to separation/divorce sexual assault. We begin by addressing a series of misconceptions about what is rural, rural homogeneity and commonly held presumptions about the relationship of rurality, collective efficacy (and related concepts) and crime. We conclude by recommending more focused research, both qualitative and quantitative, to uncover specific link between the rural transformation and violence against women. This paper was presented at the 2006 annual meeting of the American Society of Criminology, Los Angeles, California. Some of the research reported here was supported by National Institute of Justice Grant 2002-WG-BX-0004 and financial assistance provided by the College of Arts and Sciences and the Office of the Vice President for Research at Ohio University. Arguments and findings included in this article are those of the authors and do not represent the official position of the US Department of Justice or Ohio University. Please send all correspondence to Walter S. DeKeseredy, e-mail: walter.dekeseredy@uoit.ca. All of the names of the women who participated in DeKeseredy and colleagues’ rural Ohio study and who are quoted have been changed to maintain confidentiality.

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The transfer and commercialisation of nanotechnology: a comparative analysis of university and company researchers

Nanotechnology has been proposed as the next general purpose technology and engine for growth for the 21th century. Increasing public R&D investments are foremost reflected in the growth of scientific publications, while nanotechnology still is in an uncertain phase of development with various directions of commercialization pending. This paper focuses on the challenges, modes and outcomes of nanotechnology as an emerging science-based field in Finland. The paper contributes by interrogating how challenges and modes of nanotechnology transfer differ across universities and companies and determine outcomes broadly defined. It uses survey data covering university and company researchers in the Finnish nanotechnology community. The results show significant differences in the perceptions of researchers across these organisations, and highlight specific challenges and modes as determinants of outcomes. The specificities of nanotechnology are also assessed.

Mapping the nanotechnology enterprise: a multi-indicator analysis of emerging nanodistricts in the US South

Nanotechnology has attracted significant research, funding, and policy activity in recent years in the US and many other countries. Of particular interest are the locational characteristics of this emerging technology. This study examines the emergence of nanotechnology in the US South to explore questions of regional standing and spatial trajectory, using an exploratory multi-indicator approach. Our research employs an array of 10 indicators of knowledge generation, human capital, R&D funding, and patenting, to uncover developments, clusters, and linkages in nanotechnology emergence. Results indicate that although there is nanotechnology activity in every state in the US South, this activity agglomerates in a few locations. One emerging nanodistrict (North Carolina’s Research Triangle) has prior strengths in high technology research and commercialization, especially based on biotechnology; but other districts (e.g., Oak Ridge Tennessee and Atlanta, Georgia) that have strengths in certain aspects of the nanotechnology research ecosystem have weaknesses in commercialization. The study illustrates how multi-indicator approaches can be developed from existing databases, using customized search techniques, and how the insights from multi-indicator measurement can be used to provide insights for research and innovation policy.