Carl Benedikt Frey, Giorgio Presidente, 06 May 2022

Face-to-face interactions are critical for the cross-fertilisation of ideas. Yet, the share of geographically distributed teams in scientific research has steadily risen since the 1960s and accelerated with the ICT revolution of the 1990s. This column explores how the rise of remote collaboration has shaped disruptive discoveries in science between 1961 and 2020. Remote collaboration negatively impacted breakthrough discoveries, but the effect reversed after 2010, likely due to improvements in technologies that support effective remote collaboration at distance. 

Richard Blundell, 22 April 2022

Governments are desperate to create innovation hubs or attract tech companies to kickstart economic growth, but that creates winners and losers. Richard Blundell tells Tim Phillips how policy can balance the impact of innovation on inequality and create policies so that creative destruction and social mobility can go hand-in-hand.

Read more about the research behind this podcast and download the free DP:
Blundell, R, Jaravel, X and Toivanen, O. 2022. 'Inequality and Creative Destruction '. CEPR


The Japanese government aims to realize a "new capitalism" based on the concepts of "Virtuous Circle of Growth and Distribution" and "Pioneering a New Post-Corona Society." In the new capitalism, the issues to be addressed include the decline in productivity and international competitiveness of the Japanese economy, as well as climate change and the intensifying international competition over technology.

In this symposium, European and Japanese experts will discuss the current debate on the new capitalism, "Climate Change and Economic Dynamism" and "Global Value Chains (GVC) Resilience in the Face of Geoeconomics Shocks," and explore ways to solve both global and Japanese problems.


  • Time and Date: 5:00pm-6:30pm (JST) / 9:00am-10:30am (CET), Wednesday, March 23, 2022

Keynote Speech: Agenda for the New Capitalism

YANO Makoto (Chairman, RIETI / Project Professor, Institute of Economic Research, Kyoto University / Professor by Special Appointment, Sophia University)

Panel Disscussion1: Climate Change and Economic Dynamism --Innovation for economic and planetary security

Panelists (in order of appearance)

Rick VAN DER PLOEG (Research Fellow, CEPR / Professor of Economics and Research Director, Oxford Centre for the Analysis of Resource Rich Economies (OxCarre), University of Oxford)

ONO Yuki (Representative, Hachidori Denryoku, Borderless Japan, Inc.)


Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

Panel Disscussion2: GVC Resilience in the Face of Geoeconomics Shocks

Panelists (in order of appearance)

Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

TODO Yasuyuki (Faculty Fellow, RIETI / Professor, Faculty of Political Science and Economics, Waseda University)


WATANABE Tetsuya (Vice President, RIETI)

Summary and Concluding Reflection

Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

Noam Yuchtman, 14 January 2022

The Chinese government isn't just a world leader in the use of AI for facial recognition, its orders are funding innovation in its domestic industry too. But what's good news for entrepreneurs may be bad news for political protest, Noam Yuchtman tells Tim Phillips.

Read more about the research behind this podcast and download the free DP:
Beraja, M, Kao, A, Yang, D and Yuchtman, N. 2021. 'AI-tocracy'. CEPR

Andreas Lichter, Max Löffler, Ingo E. Isphording, Thu-Van Nguyen, Felix Poege, Sebastian Siegloch, 21 December 2021

Studies have shown that targeted R&D tax incentives – such as tax credits for R&D spending – induce firms to conduct more R&D. However, little is known about the effects of general profit taxes on firm-level R&D spending and innovation output. This column presents evidence from Germany that points to sizeable negative effects of increasing profit taxes on firms’ R&D spending and patents. However, slashing business tax rates may not be the most efficient policy instrument to spur innovation altogether.

Martin Beraja, Andrew Kao, David Yang, Noam Yuchtman, 17 December 2021

The growth of artificial intelligence technology brings the potential of a ‘fourth industrial revolution’, but also poses challenges for democratic institutions. This column analyses the mutually reinforcing relationship between AI innovation and the political control objectives of autocrats. In the context of facial recognition AI in China, it shows that episodes of local political unrest lead to higher public procurement of AI technologies. Furthermore, these technologies are shown to mitigate the potential for exogenous shocks to trigger unrest, while also boosting broader software innovation in affected regions. 

Xavier Giroud, Simone Lenzu, Quinn Maingi, Holger Mueller, 01 December 2021

It is widely believed that the productivity gains from place-based policies are geographically highly localised. This column argues instead that productivity spillovers from local place-based policies may propagate far beyond the initial target region to the entire economy, through the plant-level networks of multi-region firms. But while these productivity spillovers amplify the aggregate welfare gains from local place-based policies, they widen economic disparities between individual workers and regions in the economy. 

Florian Englmaier, 12 November 2021

Tournaments are increasingly being used in business to solve non-routine problems. Florian Englmaier tells Tim Phillips about new research into what gives these teams the will to win. Do they respond to having a common sense of identity, do they want kudos and status from other people, or are they just looking for a cash prize?

Read more about the research presented and download the free discussion paper:
Englmaier, F, Grimm, S, Grothe, D, Schindler, D and Schudy, S. 2021. 'The Efficacy of Tournaments for Non-Routine Team Tasks'.CEPR

Ana Cusolito, Alvaro Garcia Marin, William Maloney, 04 November 2021

The impacts of rising competition on innovation remain unclear, and often depend on country context. This column analyses the impact of increased import competition from China on innovation by Chilean firms. It finds a negative overall impact of competition on innovation indicators. Low-productivity firms in particular see declines across all innovation measures, while the most productive firms experience improvements in product innovation and product quality. Raising the capabilities of firms and their access to resources may be an important complement to pro-competition policies.

Willem Thorbecke, 15 October 2021

During the COVID-19 pandemic many countries experienced difficulty obtaining the semiconductors that are vital for smartphones, computers, cars, artificial intelligence, cybersecurity, and many other applications. This column looks at how Asia gained comparative advantage in this sector and identifies lessons for countries seeking to promote domestic semiconductor manufacturing.

Josh Lerner, Amit Seru, 14 September 2021

Financial innovation is intensely controversial, yet we know little about where or by whom these new products and services are developed. This column looks at over 24,000 financial US patents applied for between 2000 and 2018 to analyse the nature of financial patents. A surge in financial patenting was driven by IT firms and firms in industries outside of finance. Financial regulatory actions seem to have adversely affected innovation by financial firms, while regions with the highest technological opportunities attracted financial innovation by IT and non-financial firms.

Xuelin Li, Andrew Lo, Richard Thakor, 11 August 2021

Innovation is a key driver of economic growth, and incentivising research and development is therefore a vital policy goal. This column explores the role of competition policy in stimulating innovation by pharmaceutical firms. Specifically, the authors assess the effect that ‘pay-for-delay’ agreements have on firm-level research and development in the US. The results suggest that restricting the ability of firms to engage in pay-for-delay agreements appears to increase their incentives to innovate in the face of competition, although the aggregate effects are not clear-cut.

Marc Melitz, Stephen Redding, 28 July 2021

International trade is a key determinant of firm profitability and survival, so it is natural to expect it to influence both incentives to innovate and the rate of creative destruction. This column highlights four key mechanisms through which international trade affects endogenous innovation and growth: market size, competition, comparative advantage, and knowledge spillovers. Each of these mechanisms offers potential static and dynamic welfare gains. Discriminating between alternative mechanisms for these dynamic welfare gains and strengthening the evidence on their quantitative magnitude remain exciting areas of ongoing research.

Sebastian Siegloch, Nils Wehrhöfer, Tobias Etzel, 04 June 2021

Increasing regional inequality has become a major concern for policymakers both in the US and Europe. This column investigates the effects of a large place-based investment subsidy targeted at manufacturing firms in East Germany. It shows that a decrease in the subsidy rate leads to a decrease in manufacturing employment, highlighting spillovers to untreated sectors in treated counties and untreated counties connected via trade and local taxes. It also finds that the place-based policy is at least as efficient as cash transfers for the unemployed but is more effective in curbing regional inequality overall.

Jessica Bai, Shai Bernstein, Abhishek Dev, Josh Lerner, 14 May 2021

Government funding to boost innovation has seen an uplift since the unfolding of the COVID crisis. Using extensive global data, this column examines how government funding programmes focused on early-stage companies interact with private capital markets, and finds a positive relationship between government funding at this business stage and private capital allocation. Increased reliance on private capital markets enabled governments to mitigate investment frictions, improve capital allocation, and thereby increase local innovation.

Sabrina Howell, Jason Rathje, John Van Reenen, Jun Wong, 08 May 2021

In recent decades, US defence R&D seems to have lost its lustre. To combat the declining innovation, in 2018 the US Air Force reformed its contracting procedures to allow applicants more freedom to suggest projects with potential military benefits. This column uses data on applications and winners from such competitions to assess the effects of the reform. It finds that the ‘open’ programme attracts new and younger firms, increases future venture capital investment, and increases patenting. Government R&D could thus benefit from more bottom-up, decentralised approaches to promote innovation in the public sector. 

Alexander Cuntz, Matthias Sahli, 28 April 2021

Appropriation artists incorporate borrowed images from different sources to produce new compositions. These artists not only risk infringing copyright, but also leave intermediaries such as auction houses at risk of litigation. This column considers changes to the secondary market for appropriation art in the aftermath of a 2013 decision by the US Court of Appeals. Providing quantitative evidence of how the ‘fair use’ defence has affected the secondary arts market, the column questions whether the existing framework promotes or hampers innovation in the art world.

Matthias Breuer, Christian Leuz, Steven Vanhaverbeke, 08 April 2021

Firms often argue that disclosure and reporting regulations such as the EU Accounting Directive require them to reveal proprietary information, which discourages innovation. This column explores the effects of disclosure requirements on corporate innovation in the EU, and finds that forcing firms to publicly disclose their financial statements does indeed discourage innovative activities. At the industry level, positive information spillovers to competitors, suppliers, and customers appear insufficient to compensate for the negative direct effect on innovation. Indeed, the spillovers seem to concentrate innovation within a few large firms in a given industry.

Robin Döttling, Lev Ratnovski, 19 March 2021

Technological progress increases the importance of corporate intangible assets such as research and development knowledge, organisational structure, and brand equity. Using US data covering 1990 to 2017, this column shows that the stock prices and investment of firms with more intangible assets respond less to monetary policy shocks. Similarly, intangible investment responds less to monetary policy compared to tangible investment. The key channel explaining these effects is a weaker credit channel of monetary policy, as firms with intangible assets use less debt.

Lauren Cohen, Umit Gurun, Danielle Li, 14 March 2021

Covid-19 has revealed the importance of quick, efficient, but safe medical innovation. The development of various vaccines, as well as a range of treatments, have been tech tools in the fight against the public health and economic crises. This column explores the impact of informal deadlines within the drugs market, arguing that such regulatory pressures can end up distorting product safety and marketability. The findings highlight the need for well-designed regulatory systems which allow medical innovators to move swiftly but safely during the next health shock.



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