This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg.The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.

The nature of publicly funded innovation and implications for regional growth: Reflections from the Sheffield City Region

By: C. Brooks, C. Gherhes, T. Vorley, N. Williams. Competitiveness Review, Vol. 28, Iss. 1, pp. 6-21, 2018.

Abstract: “The aim of this paper is to unpack the nature of business innovation and understand the impact on regional innovation and competitiveness. The paper is based on a qualitative study of Advanced Manufacturing and Advanced Materials businesses in the Sheffield City Region (UK). Interviews were conducted with 23 firms in exploring how innovation in the firm translates to innovation-led regional economic growth. The paper demonstrates that there is a tendency of owner managers to focus on innovation in terms of the development of new products, processes and/or services. Many of the businesses interviewed were technologically innovative, yet there was little evidence of wider business model innovation. This, the authors conclude, stymies regional innovation and with it regional economic growth. This study is based on a case study of the Sheffield City Region and is not generalizable, but offers insights into the nature of business model innovation, which are valuable in generating questions for further research. The paper highlights the need to think of innovation in broader terms and the scope of business model innovation to not only improve the performance of firms but also regional economic growth. Business model innovation is a growing domain of the literature, and this paper highlights how narrow interpretations of innovation may serve to limit growth business growth, and with it regional economic growth.” [ABSTRACT FROM AUTHORS]

The locations of innovation described through thirty-nine tech-campuses

By: F. T. de Jesus Curvelo Magdaniel, A. C. Den Heijer, H. De Jonge. Competitiveness Review, Vol. 28, Iss. 1, pp. 58-74, 2018.

Abstract: “This paper aims to describe the different locations of campuses developed to stimulate innovation. The paper aims at supporting strategic decisions in the development of new and existing campuses and similar innovation-driven areas. Additionally, it aims to outline the key role of location for urban and regional competitiveness in the knowledge economy. This paper tests an existing planning tool that proposes location and connectivity as key aspects to stimulate innovation in campus development. This tool is used to analyze and compare 39 campuses with different locations characteristics worldwide. Findings describe five types of location characteristics in existing campuses developed to stimulate innovation. These characteristics are dynamic, and exhibit differences in connectivity aspects enabling more or less efficient access to amenities and knowledge networks. Empirical findings were used to revise and improve the planning tool. Further research exploring the relation between connectivity aspects and innovation processes is recommended. This paper supports decision-makers of new and existing campuses struggling with location decisions, by outlining that campus’ connectivity is crucial regardless of whether the campus is in an inner city or a peripheral setting. Improving campus connectivity may be an efficient way to spend the many public and private resources invested on campus development to stimulate innovation. This paper provides a unique comparison of cases that can be useful to planners of existing campuses to benchmark their current locations in relation to their ambitions on innovation.” [ABSTRACT FROM AUTHORS]

Small scale entrepreneurship – understanding behaviors of aspiring entrepreneursin a rural area

By: S. Gretzinger, S. Fietze, A. Brem, T. Ugonna Ogbonna. Competitiveness Review, Vol. 28, Iss. 1, pp. 22-42, 2018.

Abstract: “Networking and being a part of an established business network supports the process of translating new ideas into marketable solutions and acquiring customers. The purpose of this paper is to investigate how aspiring entrepreneurs in a Danish rural area setting manage to get embedded into relevant business networks. Before the literature background on social capital and regional development, the authors use the embeddedness approach in explaining whether weak or strong ties are most beneficial to get the business started and how lacking strong ties can be compensated. This paper takes an economic sociology perspective on social capital and is empirically based on a case study. The sample consists of a group of young aspiring entrepreneurs, living in the rural area of Southern Jutland, who are all committed to an organization, which supports regional start-ups. The authors found that aspiring entrepreneurs have different needs depending on their development status and type of innovation. Founders, who are developing or have developed new product innovations, seem to have an increased need for “strong ties” with consultants and those with knowledge about building up a professional network. Founders, who are developing or have developed a significantly improved service, have strong ties with former fellow students and researchers at the university. This study illustrates that aspiring entrepreneurs connected to a regional entrepreneurship center gained access to a wider relevant network. Depending on their level of embeddedness, they could build new strong relationships and exploit information stemming from new “weak ties” and as such harness more benefits. The study shows that less privileged start-ups can substitute strong ties, especially through the support of professional managers of startup-supporting organizations. Finally, a model explaining the impact of social capital on the entrepreneurial sphere of regional business networks and on its innovativeness is deduced.” [ABSTRACT FROM AUTHORS]

Smart Specialisation, seizing new industrial opportunities

By: A. Vezzani, M. Baccan, A. Candu, A. Castelli, M. Dosso, P. Gkotsis.  JRC Technical Reports, doi:10.2760/485744, 2017.

Abstract: “This study offers a novel analytical approach to inform the regional search for new industrial opportunities, as promoted by Smart Specialization within the EU Cohesion policy context. The analysis departs from the challenges of practicing Smart Specialization and its entrepreneurial discovery process in a dynamic perspective. It argues that the adoption of a dynamic approach to identify new opportunities implies mapping regional business and innovation assets as well as, assessing their position within the global technological and industrial landscape. The report brings a case study of the Lombardy region business environment, spurring from the S3 Lab initiative (in collaboration with Baden-Württemberg, Catalonia and Lapland), together with a comparative analysis focusing on technological development. The empirical study combines patent data from OECD REGPAT and territorial proprietary micro-data from Lombardy region on firm creation in emerging industries (EI) – new industrial sectors or existing sectors evolving into new industries (European Cluster Observatory). These industries represent a priority area for Lombardy's innovation-led development strategy. The initial observations confirm the importance of such industries in the region; they represent more than one-third of employment, almost a half of the regional value-added and feature together the majority of innovative start- ups, suggesting the relevance of the regional strategic development choices. Also, in terms of productive advantages, Lombardy ranks high in some key EI. The mapping of technological competences through patent indicators measuring specialization, diversification and the ability to specialize in fast-growing and niche fields gives relevant insights on the technological potential of the region, providing further guidance for better targeted interventions.” [ABSTRACT FROM AUTHORS]

When genesis shapes cluster life cycle? Applying mixed method on a French cluster case study

By: B. Bernela, M. Ferru, M.-H. Depret. University of Poitiers, halshs-01616929, 2017.

Abstract: “Adding to the growing literature on cluster life cycle (CLC), this paper gives new insights focusing on the crucial stage of genesis. We argue that the process by which clusters came into existence matters by structuring its further development. We conceptualize this dynamic process through an evolutionary perspective - considering the relevance of history - enriched by the relational and institutional ones, giving the structuring role of interpersonal ties and institutions. To implement this comprehensive approach of CLC, data availability becomes a great challenge since historical and relational materials are needed. We suggest using an original mixed method we apply on a French cluster. Whereas our understanding of the preexisting stages of the cluster official birth is only based on qualitative data, its evolution is derived from quantitative approach interpreted by qualitative one. The CLC appears to be driven by historical features which make it able to adapt over time.” [ABSTRACT FROM AUTHORS]

Cluster Dynamics: Learning from Competitiveness Cluster Policy. The Case of 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region

By: C. Longhi. GREDEG Working Paper No. 2017-42, 2018.

Abstract: “The paper aims to identify the forms and dynamics of the organizational structures of high-tech clusters overtime. Since Markusen (1996), it is well acknowledged that diversity is an emergent property of clusters, but the interactions between local and non-local actors of the clusters are difficult to trace because of lack of relevant data. The cluster policies developed to fix the network failures between the heterogeneous actors – large and small firms, universities, research institutes – of the current processes of innovation provide new information opportunities. In France, Competitiveness Clusters work as a “factories of project”; the information they produce on collective R&D projects applying for subsidies provides a proxy of local and non-local relations of the clusters. Social network analysis is used to infer the organizational structure of the collective learning networks and trace their dynamics. The case studies considered are Sophia-Antipolis and Rousset, two high tech clusters which belong to the same Competitiveness Cluster, ‘Secure Communicating Solutions’ in the Provence-Alpes-Côte d’Azur Region. The paper highlights the decoupling of the two clusters overtime as a consequence of distinctive organizational structures. The diversity of the dynamics of the collective learning networks which emerges through the analysis of the collective R&D projects in the two high tech clusters shows that knowledge creation and innovation can follow different paths and questions the public policies implemented.” [ABSTRACT FROM AUTHOR]

Firm Productivity and Cities: The Case of Colombia

By: J. Balat, C. Casas. Borradores de Economia, Banco de la Republica, Paper No. 1032, 2018.

Abstract: “In this paper we study the determinants of firm-level productivity in Colombia. We are interested in the effects of agglomeration forces that explain why manufacturing economic activity tends concentrate geographically as well as the effect of forces that can hurt productivity in high-density areas. An unfortunate major example of the latter forces in Colombia is its high levels of crime and terrorist attacks. We carry out this study by exploiting two very rich data sources: a firm-level panel which allows us to estimate firm-level productivity and a panel of municipality characteristics. To address selection and endogeneity issues in the estimation of firm-level productivity we use a control function approach. Our main findings are the following. First, scale economies do not seem to affect firm-level productivity. Second, we do find evidence of location economies (industrial specialization has a positive effect on productivity). Industrial variety, on the other hand, lowers productivity. It seems that firms in Colombia benefit from forming clusters and locating in cities with less industrial variety. We also find non-trivial effects of city fiscal performance, education level and quality, and crime and violent attacks.” [ABSTRACT FROM AUTHORS]

Modeling interregional research collaborations in German biotechnology using industry directory data: A quantitative social network analysis

By: T. Mitze, F. Strotebeck. MPRA Paper No. 83392, 2017.

Abstract: “We use industry directory data as a novel source of information to model the strength of interregional research collaboration in German biotechnology. Specifically, we gather data on the number of research collaborations for biotech actors listed in the BIOCOM Year and Address book and aggregate this information to the level of German NUTS3 regions. This allows us to set up a modeling framework that treats individual regions as nodes of the biotech research network. We then specify the collaboration activity between regional nodes as a function of research and economic capacities at the regional level, the geographical proximity between regions, and policy variables. Our results show that the strength of interregional research collaboration can be related to both node properties and the relationship between nodes. As such, we find that modern locational factors are positively correlated with the extent of interregional research collaboration, while geographical distance is found to be an impediment to collaboration. The results further show that the pursuit of network and cluster policies in the biotech sector, particularly through collaborative R&D funding, is positively related to the strength of the interregional collaboration activity.” [ABSTRACT FROM AUTHORS]

Regional Growth Paths: From Structure to Agency and Back

By: M. Grillitsch, M. Sotarauta. Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Papers in Innovation Studies, Paper No. 2018/01, 2018.

Abstract: “The study of regional growth paths is a key theme in economic geography and of elemental interest for policy makers concerned with regional development. Evolutionary theory explains the path-dependent nature of regional development, and points to its open-ended nature. This paper addresses the interplay between path-dependent, structural forces and the construction and utilization of opportunities through agentic processes. Extending to the evolutionary framework, it is argued that not only history but also perceived future opportunities influence agentic processes in the present and thus shape regional growth paths. Building on recent work about foresightful, strategic and distributed agency, this paper identifies three forms of agency, Schumpeterian innovative entrepreneurship, institutional entrepreneurship and place leadership, that call for and necessitate each other in the process of shaping regional growth paths. It is argued that such a holistic view is essential to understand regional development processes and in particular structural change as manifested in economic diversification and new industrial path development. ” [ABSTRACT FROM AUTHORS]

Who Becomes an Inventor in America? The Importance of Exposure to Innovation

By: A. Bell, R. Chetty, X. Jaravel, N. Petkova, J. Van Reenen. CEP Discussion Paper No. 1519, ISSN 2042-2695, 2017.

Abstract: “We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high- impact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by cutting tax rates. In particular, there are many “lost Einsteins” - individuals who would have had highly impactful inventions had they been exposed to innovation.” [ABSTRACT FROM AUTHORS]