The effects of biased technological change on total factor productivity: empirical evidence from a sample of OECD countries

Technological change is far from neutral. The empirical analysis of the rate and direction of technological change in a significant sample of 12 major OECD countries in the years 1970–2003 confirms the strong bias of new technologies. The paper implements a novel methodology to identify and disentangle the effects of the direction of technological change upon total factor productivity (TFP) and shows how the introduction of new and biased technologies affects the actual levels of TFP according to the relative local endowments. The empirical evidence confirms that the introduction of biased technologies enhances TFP when its direction matches the characteristics of local factor markets so that locally abundant inputs become more productive. When the direction of technological change favours the intensive use of production factors that are locally scarce, the actual increase of TFP is reduced.     

The generation and exploitation of technological change: market value and total factor productivity

In this paper we articulate and test the hypothesis that TFP is a reliable and relevant measure of firm’s innovation capabilities, and, as such, accounts for Tobin’s q indicator. With this aim, we investigate empirically the relationship between firm level total factor productivity and the Tobin’s q. Measuring Tobin’s q allows inferring the actual value of knowledge capital from stock market valuation. We use a panel of companies listed on UK and the main continental Europe financial markets (Germany, France and Italy) for the period 1995–2005. Our results confirm that TFP is a reliable indicator of firm’s innovative capabilities. When we control for firm’s R&D investments and intangible assets, the effects of TFP on market value remain highly significant. This suggests that TFP is a broader measure of innovation capability than R&D is. The validation of the Tobin’s q and TFP relationship has important implications concerning firm’s technological innovation measurement.     

Some comments on Antonelli and Quatraro’s paper of measuring effect of biased technology on TFP

The paper is a response to Antonelli and Quatraro’s paper named “The effects of biased technological change on total factor productivity: empirical evidence from a sample of OECD”. We point out that “so-called novel method” which is used to identify and disentangle the effects of the direction of technological change on total factor productivity (TFP) in the article is wrongly implemented. Antonelli and Quatraro introduce Solow’s methodology as part of his basic model to represent the effect of neutral technical change, ignoring the intrinsic consequence of Solow’s calculating which called technical progress productivity is far from neutral. Hence, his methodology has little significance, neither the empirical analysis. Lastly, we give a new method measuring whether the technology is appropriate to the factor endowments’ changing. That’s the effect of biased technology on TFP.     

Structural change, technology, and economic growth: Brazil and the CIBS in a comparative perspective

Schumpeterian growth theory stresses the role of structural change in long run growth. Countries which increase the share of technology-intensive sectors in their economic structures benefit more from technological learning and innovation. In addition, they are more able to respond to changes in the international markets and to compete in sectors whose demand grows at higher rates. The paper compares Brazil (and to a lesser extent the CIBS group of countries) from the point of view of the direction and intensity of structural change. It is suggested that structural change has been relatively weak in Brazil and that this has been associated with a less dynamic growth performance since the 1980s.     

Technology Transfer in European Regions: Introduction to the Special Issue

Regions can be considered as “regional innovation systems,” but the question of whether and to what extent technology transfer is taking place at this or other (e.g., national and global) levels remains empirical. The theme issue contains a number of case studies of “regional innovation systems” within the European Union. Other papers elaborate on the pros and cons of the systemic approach to the technology transfer processes involved, or make comparisons across regions. In this introduction, the editors discuss the relations between regional policies, technology and innovation policies, and the integration of these different aspects into (potentially regional) systems of innovation. Under what conditions can “technology transfer” be considered as a mechanism of integration at the regional level?     

A Schumpeterian growth model: wealth and directed technological change

This paper explores the effects of the accumulation of savings on the creative reaction of firms, the search for technological congruence and the direction of technological change with a Schumpeterian model of endogenous growth. The model shows how the accumulation of wealth accounts for the reduction of the relative user cost of capital and activates, with proper levels of knowledge governance, the creative reaction of firms, search for higher levels of technological congruence and the introduction of directed technological change with higher levels of capital intensity. The dynamics of accumulation of wealth and induced technological change accounts the self-sustained increase of total factor productivity.     

Contextualising Regional Innovation Systems in a Globalising Learning Economy: On Knowledge Bases and Institutional Frameworks

In order to advance the understanding of which types of regional innovation system represent effective innovation support for what kinds of industry in different regions analyses must be contextualized by reference to the actual knowledge base of various industries as well as to the regional and national institutional framework, which strongly shape the innovation processes of firms. Of special importance is the linkage between the larger institutional frameworks of the national innovation and business systems, and the character of regional innovation systems. In making the arguments about a general correspondence between the macro-institutional characteristics of the economy and the dominant form and character of its regional innovation systems a link is provided to the literature on ‘varieties of capitalism’ and national business systems.     

Regional Innovation Systems: General Findings and Some New Evidence from Biotechnology Clusters

This paper focuses on interactive innovation. It starts by operationalising Regional Innovation in the context of multi-level governance. It shows how regional and external innovation interaction among firms and other innovation organizations is important for regional innovation potential. The ability to access and use funding for innovation support for regional firms and organizations is crucial for regional innovation promotion. Equity investment funding is more important than public funding, which tends to be cautious and otherwise risk avoiding, except in circumstances of market arrest or failure to develop. Regional systems of innovation are broader than single sectors or clusters but some of these will be strategically privileged recipients of policy support because of their growth performance or potential, rather than, as in the past, their uncompetitiveness. The paper devotes space to exploring biotechnology clustering from a regional innovation systems viewpoint, as an instance of rather strong sectoral, regional innovation systems capabilities, though integrated also to global knowledge supply and markets. Illustration is provided of the way such sectoral innovation systems work at local regional level by reference to cases from Cambridge, Massachusetts and Cambridge, England.     

On Understanding the Increase in U.S. Patent Litigation

Patent litigation in the United States has increased dramaticallyin the last 20 years. Understanding this increase, and the concomitantincrease in patent grants, can help us to better understandthe sources of technological innovation and productivity. Theapproach described here provides a means to simultaneously examineboth the "friendly court" hypothesis and the hypothesis of anincrease in research productivity associated with the informationage. The results support the notion that both hypothesized factors,changes in court outcomes and increased research productivityand the associated increase in patenting activity, have playeda role in the growth of patent litigation.     

Reframing the Role of Universities in the Development of Regional Innovation Systems

The role of universities in regional innovation has evolved over the last 20 years. This evolution has seen the emergence of a third role of universities that has re-shaped and transformed their two traditional functions of teaching and research. This paper proposes a conceptual framework for analysing variation in the roles performed by universities in the development of regional innovation systems. This framework is based on the triple helix model of university, industry, government relations, the literature on university engagement and the innovation systems literature, more generally. The framework is applied to a comparative study of three non core-metropolitan universities in Australia. A number of insights and issues are drawn in regard to conceptualising the role of universities in regional systems.     

Transforming the Post-Soviet Research Systems Through Incubating Technological Entrepreneurship

For many years the Soviet Union and the Eastern block countries (member countries of the former Warsaw pact) had been considered as the main military competitors of the western countries buttressed in their struggle against the West by their economic and scientific resources. The Warsaw pact countries had high levels of R&D investments, a large number of researchers and engineers, and diverse research facilities. On the other hand, output indicators (patent applications, number of papers, scientific citations, etc.), and especially the rates of technological innovation were not so impressive. This paper analyzes the sources of these differences with special attention to the functions played by science and technology (S&T) programs in the formerly communist societies of Europe and Russia. The dynamics of changes in the R&D potential in these countries are considered along with ways and possible scenarios of convergence towards the national systems of innovation of developed western economies. Special emphasis is assigned to the constructive role that technology transfer and commercialization processes along with the use of a network of virtual incubators and the promotion of technological entrepreneurship, can play in fostering a socio-economic renaissance in Eastern Europe and Russia.     

Regional Innovation Systems: The Integration of Local ‘Sticky’ and Global ‘Ubiquitous’ Knowledge

The paper examines how firms in three regional clusters in Norway dominated by shipbuilding, mechanical engineering and electronics industry, respectively exploit both place-specific local resources as well as external, world-class knowledge to strengthen their competitiveness. From these case-studies we make four points: (1) Ideal-typical regional innovation systems, i.e., regional clusters surrounded by supporting local organisations, is rather uncommon in Norway. (2) External contacts, outside of the local industrial milieu, are crucial in innovation processes also in many SMEs. (3) Innovation processes may nevertheless be regarded as regional phenomena in regional clusters, as regional resources and collaborative networks often have decisive significance for firms' innovation activity. (4) Regional resources include in particular place-specific, contextual knowledge of both tacit and codified nature, that, in combination, is rather geographically immobile.     

The “Science of Science Policy”: reflections on the important questions and the challenges they present

Developing the “Science of Science Policy” will require data collection and analysis related to the processes of innovation and technological change, and the effects of government policy on those processes. There has been much work on these topics in the last three decades, but there remain difficult problems of finding proxies for subtle concepts, endogeneity, distinguishing private and social returns, untangling cumulative effects, measuring the impact of government programs in a true “but for” sense, and sorting out national and global effects. I offer observations on how to think about these issues. This paper was presented as the Keynote Address at the NSF Workshop on Advancing Measures of Innovation: Knowledge Flows, Business Metrics, and Measurement Strategies, Arlington, VA, June 2006.     

The Techno-Economic: Perspectives for Analysis and Intervention

This paper compares the macro- and micro- analyses of techno-economic change. Arguing for perspectives which are sensitive to the local flexibility of innovation but which can also provide suggestions for policy and intervention, it describes and reviews the two major contributions: work on Techno-Economic Networks, and on Techno-Economic Paradigms. It is argued that the former has greater depth of analytical sensitivity, whilst the latter is more policy-relevant. Whilst there are approaches, such as Constructive Technology Assessment, which attempt to combine the two perspectives, these are seen as failing to retain sensitivity to the power differentials between key actors such as firms, experts, governing agencies or citizens' groups. The paper concludes by advocating attention to the ‘meso-level techno-economic’—the networks of institutions and actors at work in: geographically bounded systems of innovation; scientific and technological disciplines; firms, their strategies and linkages; and the nexus between production and consumption.     

制度变迁中的创新精神探析

科技实力在很大程度上代表着一国综合国力的大小和它在世界上的地位,因而技术的创新力对国家的发展起着举足轻重的推动作用。但是,科技的发展从来都不是自发的,没有代价的;技术的创新也只是狭义的创新;制度变迁和制度的框架决定着技术发展的空间。制度的创新才是广义上的创新,是制度变迁的根本动力,因而也是技术创新的原动力。只有激发整个民族的制度创新精神,才能谈得上技术的创新和国力的增强。     

增强自主创新能力 加快转变经济发展方式

转变经济发展方式的关键是增强自主创新能力。本文认为,增强自主创新能力是社会经济发展到一定阶段的必然要求,是可持续经济发展的必然要求,是提高经济发展质量和效益的内在需求,是继续应对国际金融危机的迫切需要。因此,增强自主创新能力,加快经济发展方式转变,必须提高企业技术创新能力,建立以企业为主体、市场为导向、产学研相结合的技术创新体系,优化科技创新环境,加强科技创新人才队伍建设。     

Data protection by design and technology neutral law

This article argues that to achieve a technology neutral law, technology specific law is sometimes required. To explain this we discriminate between three objectives, often implied in the literature on technological neutrality of law. The first we call the compensation objective, which refers to the need to have technology specific law in place whenever specific technological designs threated the substance of human rights. The second we call the innovation objective, referring to the need to prevent legal rules from privileging or discriminating specific technological designs in ways that would stifle innovation. The third we call the sustainability objective, which refers to the need to enact legislation at the right level of abstraction, to prevent the law from becoming out of date all too soon. The argument that technology neutral law requires compensation in the form of technology specific law is built on a relational conception of technology, and we explain that though technology in itself is neither good nor bad, it is never neutral. We illustrate the relevance of the three objectives with a discussion of the EU cookie Directive of 2009. Finally we explain the salience of the legal obligation of Data Protection by Design in the proposed General Data Protection Regulation and test this against the compensation, innovation and sustainability objectives.     

Multiplicative-innovation synergies: tests in technological acquisitions

Technological innovations enjoy synergies that vary in their speed and magnitude of impact, depending upon whether they are additive or multiplicative in nature. Additive-innovation synergies build incrementally on familiar technologies (as is reflected in the technologies built upon within their patents’ respective antecedents) and the duration of their effect is shorter-lived. Multiplicative-innovation synergies arise from combining greater proportions of diverse technologies and their effects have longer duration. The most-effective organizational-learning processes accompanying exposure to exotic technology streams via technological acquisition will occur if firms have properly invested in adaptive capacity to synthesize inventions using the unfamiliar knowledge. In the first tests of innovation synergies on firm performance, we find that technological novelty in patent content improves return on assets for firms that consistently invested in R&D. Using patent-content scores to characterize whether inventors have integrated greater proportions of exotic technological antecedents into their inventions (or not), we test the impact of innovation synergies on firms’ performance after technological acquisitions. Diversification posture (which could be an alternative explanation for performance differences) is negatively-correlated with innovation synergies in our results.     

Towards a broad understanding of innovation and its importance for innovation policy

This paper considers the changes in the concept of innovation during recent decades and the degree to which such changes have been of significance to innovation policy. We observe that: (1) the notion of innovation in research, statistics, and policy is becoming increasingly broad; (2) while this broader notion is conceptually more adequate for understanding the complexity of innovation activity, it also makes it increasingly difficult to gain a clear, unambiguous picture of innovation activity; (3) policy concepts built upon this extended understanding of innovation are becoming more complex in terms of governance capacities, coordination capabilities, and evidence-based policy formulation. The broad perception of innovation will, in fact, require substantial innovations in political and administrative systems to apply.     

Regional Innovation Systems in Central and Eastern Europe: Determinants, Organizers and Alignments

While proximity was an asset in socialism, during the post-socialist period the development of the region as a locus of innovation is essential for restructuring and sustainable growth of economies of Central and Eastern Europe (CEE). The paper analyzes the factors that determine the emergence of regional innovation systems in CEE. Based on a conceptual model of regional innovation system we explore four determinants: national, sectoral, micro and regional. These determinants operate as conditional advantages or disadvantages that require network organizers and network alignment in order to be turned into real advantages. The paper points to the important role of network organizers for enhancing regional innovation in the post-socialist economies. Policy implications of the model suggest that the emphasis should be on functions and programs rather than on new organizations.