Research is increasingly pointing to the rising concentration of creative and science-oriented workers as the basic force for making cities, and large cities in particular, the contemporary motors of innovation. This column examines whether this is the case in Germany. The results suggest that creative workers’ innovation is constrained to the boundaries of the firm, while science-based workers generate considerable innovation spillovers. Policies to generate innovation in Germany are likely to yield greater returns by focusing on ‘geeks’ rather than ‘creatives’, and innovation policy should look beyond the largest cities to a broader range of territories that have proven attractive to ‘geeks’.
Productivity and Innovation
Patent protection is assumed to benefit entrepreneurs seeking investment, because patents signal quality and are an asset that can be resold if a startup fails. This column argues that the evidence for these benefits is inconclusive. Notably, patents acquired in a secondary market may be used for rent-seeking, rather than to incentivise innovation.
Evidence from the US indicates that business dynamism is declining, and that this affects overall productivity growth. This column explores business dynamism in Belgium between 1985 and 2014. The results show remarkable similarities to those from the US, suggesting that these changes are likely due to global trends such as the rise of information and communication technology.
Job reallocation is an important determinant of productivity. This column uses US data to show that a decline in the degree of job reallocation in response to shocks is behind the overall fall in the rate of reallocation over the past decades. Weakening responsiveness became a drag on aggregate productivity for high-tech businesses in the 2000s, but in other sectors the problem dates back to the 1980s.
Disagreements over intellectual property rights policies have been a major roadblock in recent trade agreement talks, and the issue has also been a pillar of critiques of globalisation. This column discusses new research that matches confidential, comprehensive data on firm patenting and trade behaviour for the first time. It shows that, all else equal, firms who hold patents in the US are significantly more likely to export to countries that better protect intellectual property rights.
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Casey, Crane, Gensler, Johnson, Narula, 16 July 2018
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Events
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14 August - 1 September 2018 / / World Trade Organization
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20 - 21 August 2018 / Goethe University Frankfurt / Central Bank Research Association (CEBRA) and the Research Center SAFE (Sustainable Architecture for Finance in Europe) at Goethe University Frankfurt
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27 - 28 August 2018 / Sala del Sindaco, Palazzo Orsini, Galatina (Lecce) / Banque de France and Paris School of Economics
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10 - 11 September 2018 / Leipzig University / Leipzig University, European Association of Young Economists
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12 - 13 September 2018 / Rome, Italy / European Center of Sustainable Development , CIT University
