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.

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.

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.

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.

The science commons in health research: structure,function, and value

The “science commons,” knowledge that is widely accessible at low or no cost, is a uniquely important input to scientific advance and cumulative technological innovation. It is primarily, although not exclusively, funded by government and nonprofit sources. Much of it is produced at academic research centers, although some academic science is proprietary and some privately funded R&D enters the science commons. Science in general aspires to Mertonian norms of openness, universality, objectivity, and critical inquiry. The science commons diverges from proprietary science primarily in being open and being very broadly available. These features make the science commons particularly valuable for advancing knowledge, for training innovators who will ultimately work in both public and private sectors, and in providing a common stock of knowledge upon which all players—both public and private—can draw readily. Open science plays two important roles that proprietary R&D cannot: it enables practical benefits even in the absence of profitable markets for goods and services, and its lays a shared foundation for subsequent private R&D. The history of genomics in the period 1992–2004, covering two periods when genomic startup firms attracted significant private R&D investment, illustrates these features of how a science commons contributes value. Commercial interest in genomics was intense during this period. Fierce competition between private sector and public sector genomics programs was highly visible. Seemingly anomalous behavior, such as private firms funding “open science,” can be explained by unusual business dynamics between established firms wanting to preserve a robust science commons to prevent startup firms from limiting established firms’ freedom to operate. Deliberate policies to create and protect a large science commons were pursued by nonprofit and government funders of genomics research, such as the Wellcome Trust and National Institutes of Health. These policies were crucial to keeping genomic data and research tools widely available at low cost.

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.

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.

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.

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.

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.

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.

Knowledge diffusion from university and public research. A comparison between US,Japan and Europe using patent citations

This paper estimates the process of diffusion and decay of knowledge from university, public laboratories and corporate patents in six countries and tests the differences across countries and across technological fields using data from the European Patent Office. It finds that university and public research patents are more cited relatively to companies’ patents. However these results are mainly driven by the Chemical, Drugs & Medical, and Mechanical fields and US universities. In Europe and Japan, where the great majority of patents from public research come from national agencies, there is no evidence of a superior fertility of university and public laboratory patents vis à vis corporate patents. The distribution of the citation lags shows that knowledge embedded in university and public research patents tends to diffuse more rapidly relative to corporate ones in particular in the US, Germany, France and Japan.

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.

Spatial mobility of knowledge transfer and absorptive capacity: analysis and measurement of the impact within the geoeconomic space

This paper analyses the spatial mobility of knowledge and technology transfer and measures the economic impact on the geo-economic space. The data of laboratories operating in different research and technological fields are used. The results show that, when the distance from the source of knowledge (research institute) to users increases, the impact of knowledge and technology transfer decreases with damped pulsations. The magnitude of knowledge and technology transfer shows a high intensity within the industrial district because small businesses are able to acquire externally scientific knowledge, without conducting in-house research, but by interactions with public scientific bodies and adopting both collective rules that act as collective knowledge devices, making collective learning possible, and skilled labor.

The effect of university culture and stakeholders’ perceptions on university–business linking activities

The present work discusses the effects of university culture and structure on university–business relations, focusing on knowledge transfer activities. It puts forward the thesis that when links between university and business are introduced into the university system as a turn-key proposition rather than as developmental process, the prevailing university culture and structure will exert resistance against change and will oppose the creation of appropriate structures to promote them, with deleterious effects for the university.

Strategic spin-off: a new incentive contract for managing R&D researchers

Innovation is a strategic challenge for high-tech companies and as such, justifies large investments in R&D. After exploring the limits of the underlying postulates of the organizational management of innovation (the necessary specialisation of researchers, the possibility of human discontinuity of innovation and possibility of controlling researchers), the objective of this paper is to show that the relationship between managers and researchers is characterised by asymmetric information (Laffont , J. J. (1985). Economie de l’incertain et de l’information, Economica.) to the benefit of the researchers. This asymmetry supposes the setting up of management practices which incite researchers to optimise the company’s interests, but this can only be done to at the expense of management control. In R&D activities, the informational asymmetry in agency relationship can be overcome by incentive managerial practices (Jensen, M. C., & Meckling, W. H. (1976) Theory of the firm: managerial behavior, agency cost, and ownership structure. Journal of Financial Economics, 3(4), 305–360.). The relationship between the manager (principal) and the researcher (agent), can be resolved by setting up the practice of strategic spin-off. This practice which enables a researcher to create a company based on work that he himself has carried out within the R&D department of his “mother” company, constitutes both an economic incentive (through the status of shareholder) and a symbolic one (through the status of entrepreneur). The incentive is strong for the researcher both to reveal his information and to obtain financial value from his research. Implementing this incentive contract means putting into place certain managerial and organisational practices designed to accompany the researcher–entrepreneur: (training, incubator, venture-capital structure etc.). The practice of strategic spin-off is beginning to emerge in high tech enterprises. This is why we have chosen to make an in-depth case study of the French company most involved in strategic spin-off, namely France Telecom.

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.

Technology spillovers and stability of international climate coalitions

Cooperation in international environmental agreements appears difficult to attain because of strong free-rider incentives. This paper explores how different technology spillover mechanisms among regions can influence the incentives to join and stabilise an international agreement. We use an applied modelling framework (STACO) that enables us to investigate the stability of partial climate coalitions. Several theories on the impact of technology spillovers are evaluated by simulating a range of alternative specifications. We find that spillovers are a good instrument to increase the abatement efforts of coalitions and reduce the associated costs. In our setting, however, they cannot overcome the strong free-rider incentives that are present in larger coalitions, i.e. technology spillovers do not substantially increase the success of international environmental agreements. This conclusion is robust with respect to the specification of technology spillovers.

The entrepreneurial society

This paper explains why and how entrepreneurship has emerged as an engine of economic growth, employment creation and competitiveness in global markets. The entrepreneurial society reflects the emergence as entrepreneurship as an important source of economic growth.