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National Technological Capabilitiesand Innovation Performance
Krzysztof SzczygielskiCASE & Lazarski School
EACES workshop, 10. April 2010, Moscow
Definitions (in this paper)
National technological capabilities characteristics of the economic and social
system that determine a country’s ability to implement and develop new technologies
in particular: knowledge, skills, infrastructure cf. Fagerberg, Srholec, Verspagen (2010)
Innovation performance The intensity of introduction of new product and
processes by the firms (new to the firm)
Why a study of innovation performance?
Innovation activity is a key element of technological progress
The inferior performance of Eastern Europe
S hare of mnf firms that introduc ed produc t or proc es s innovations in 2006
0
10
20
30
40
50
60
70
80
Aus
tria
Bel
gium
Cyp
rus
Den
mar
k
Fin
land
Fra
nce
Ger
man
y
Gre
ece
Irel
and
Ital
y
Luxe
mbo
urg
Mal
ta
Net
herla
nds
Nor
way
Por
tuga
l
Spa
in
Sw
eden UK
Bul
garia
Cze
ch
Est
onia
Hun
gary
Latv
ia
Lith
uani
a
Pol
and
Rom
ania
Slo
vaki
a
Slo
veni
a
Cro
atia
Rus
sia
Ukr
aine
Why a study of national capabilities?
Contribution to the empirical literature Several studies have examined the relationship
between technological capabilities and innovation growth
But the hypothesized channel (i.e. innovations) remains unexplored
Interesting from the theoretical perspective
Policy relevance National technological capabilities relatively easily
addressed by policy measures
Research questions
Are there diminishing innovation returns to national technological capabilities?(hypothesis justified by the National Innovation
System approach)
Is inferior innovation performance of Eastern Europe explained by lower technological capabilities?
G E R D 2008
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
Bel
gium
Den
mar
k
Ger
man
y
Irel
and
Spa
in
Fra
nce
Ital
yC
ypru
s
Luxe
mbo
urg
Mal
taN
ethe
rland
s
Aus
tria
Por
tuga
lF
inla
nd
Sw
eden
UK
Ic
elan
d
Nor
way
Gre
ece
Bul
garia
Cze
chE
ston
ia
Latv
ia
Lith
uani
aH
unga
ry
Pol
and
Rom
ania
Slo
veni
a
Slo
vaki
a
Cro
atia
Tur
key
Rus
sia
Ukr
aine
Chi
na (
excl
.
Uni
ted
Japa
nS
outh
P atent aplic ations to E P O per mio. inh. (2006)
1,00
10,00
100,00
1000,00
Aus
tria
Bel
gium
Cyp
rus
Den
mar
k
Fin
land
Fra
nce
Ger
man
y
Gre
ece
Icel
and
Irel
and
Ital
y
Luxe
mbo
urg
Mal
ta
Net
herla
nds
Nor
way
Por
tuga
l
Spa
in
Sw
eden
Uni
ted
Bul
garia
Cro
atia
Cze
ch
Est
onia
Hun
gary
Latv
ia
Lith
uani
a
Pol
and
Rom
ania
Slo
vaki
a
Slo
veni
a
Chi
na (
excl
.
Rus
sian
Tur
key
Japa
n
Sou
th
Uni
ted
Research methodology
Generally speaking: regression of the share of innovating manufacturing firms on various measures of national and sectoral technological capabilities.
Dataset Estimation strategy
Methodology: Data
Dependent variable: share of firms that introduced a process or a product innovation in 2006(Community Innovation Survey: 28 countries x 23 two-digit NACE industries)
Independent variables: innovation capabilities Knowledge
GERD as % of GDP Applications to the EPO per 1000 inhabitants Firm expenditure on R&D over sales (industry-level data) Number of citations (minus self-citation) per an average paper (data from Scopus)
Skills Number of engineers and scientists per 1000 employed Pseudo-skill-intensity (industry-level data)
Infrastructure Broadband penetration rate Price of a standard telecommunication service
Also necessary: average life expectancy in the country (data from the CIA handbook)
Methodology: estimation strategy
estimated by a Tobit regression
Three models:
Results (*)
Results (**)
Results (** for country subsets)
Results (***)
Conclusions
National technological capabilities (NTC) are a significant factor of industry-level innovation performance
Evidence on diminishing innovation returns is mixed and depends on the subset of countries and on the measure of technological capability
Differences in NTC cannot explain the entire East-West innovation gap
Next stage
More periods (previous CISs) Better handle of the collinearity and
endogeneity problems Extension to service industries?
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