Philippe Aghion, Antonin Bergeaud, Gilbert Cette, Rémy Lecat, Helene Maghin, 13 September 2019

The impact of access to credit on productivity is not as straightforward as it seems.This column introduces a model that emphasises the coexistence of two opposing effects. Tighter access to credit makes it more difficult for entrepreneurs to invest and innovate, with detrimental long-run effects on productivity. But it also drives less efficient incumbent firms out of the market, easing the entry of new and potentially more efficient innovators. Combining these two opposite effects, the overall relationship between credit access and productivity takes the shape of an inverted-U.

Michele Pezzoni, Reinhilde Veugelers, Fabiana Visentin, 03 September 2019

The diffusion of novel technologies plays a crucial role in stimulating economic growth, but when a novel technology appears it is difficult to predict its later diffusion trajectory in terms of follow-on inventions. This column shows how the antecedents of a novel technology characterise its diffusion pattern by identifying the diffusion trajectories for a large sample of novel technologies using large-scale patent information. Riskier types of novel technologies, while having a larger technological impact, are taken up more slowly.

Robert J. Gordon, Hassan Sayed, 29 August 2019

Since 2005, productivity growth in the US and Europe has dipped below 1%. Using new industry-level from the US and ten EU countries, this column shows that that the industrial composition of the slowdown was similar in Europe and the US. Falling multifactor productivity growth explains both the magnitude and composition of falling productivity growth on both sides of the Atlantic. Decelerating technical change, rather than slowing investment, was the primary driving force in the transatlantic slowdown. 

Lene Kromann, Anders Sørensen, 15 July 2019

The automation of production processes is an important topic on the policy agenda in high-wage countries, but evidence of the economic effects of automation at the firm level is limited. This column presents insights on automation from new survey data for Denmark. The findings reveal that variation in the adoption of automation technologies is high, the change in adoption over time is slow, and almost half of Danish manufacturing firms relied greatly on manual production processes in 2010. Increasing international competition from China is a driver for investments in automation.

Ufuk Akcigit, Sina T. Ates, 04 July 2019

The US economy has witnessed a number of striking trends that indicate rising market concentration and a slowdown in business dynamism in recent decades. This column uses a micro-founded model of endogenous firm dynamics to show that a decline in the intensity of knowledge diffusion from frontier firms to laggard ones plays a key role in the observed shifts. It presents new evidence on higher concentration of patenting in the hands of firms with the largest stock that corroborates declining knowledge diffusion in the economy. 

Martin Watzinger, Monika Schnitzer, 21 June 2019

The role of science is the subject of controversial debate in the academic literature and public discourse. This column studies US patents to establish three new facts about the relationship between science and the value of private-sector inventions. First, patents building on science are on average $2.9 million more valuable than patents unrelated to science. Second, the novelty of patents predicts their value in a similar way as their science content does. Third, science-based patents are more novel. Taken together, these observations show that science introduces new concepts that are valuable for marketplace inventions.

Johannes Eugster, Giang Ho, Florence Jaumotte, Roberto Piazza, 12 June 2019

Technology diffusion to emerging markets helps share growth potential across countries and lift global living standards. Using a global patent citation dataset, this column estimates the magnitude and impact of international knowledge and technology diffusion, as well as the role that globalisation has played. In emerging markets, knowledge flows have increased innovation and productivity. Competition from emerging markets benefits global innovation.

Ramy El-Dardiry, Bastiaan Overvest, Michiel Bijlsma, 24 May 2019

Digitalisation is transforming human life – from the way we interact with each other to the way we work, relax, and create. R&D within companies is no exception. This column lays out pathways for policymakers to successfully adapt R&D policies to these changes based on three guiding principles: direct policies towards spillovers, make policies technology-neutral, and do not favour superstars over challengers.

Mónica Correa-López, Beatriz de Blas, 23 April 2019

Since the end of WWII, advanced economies have experienced long-lasting swings in economic activity. This column takes a look at the historical data and finds that, over the medium term, output and investment fluctuations among European countries have been even more volatile and persistent than in the US. It also reveals that, by diffusing embodied technology through trade inintermediates, large US firms appear to drive Europe's output over the medium term. 

Ann Harrison, Marshall W. Meyer, Will Wang, Linda Zhao, Minyuan Zhao, 07 April 2019

The conventional wisdom that privatisation of state-owned enterprises reduces their dependence on the state and yields positive economic benefits has not always been borne out by empirical work. Using a comprehensive dataset from China, this column shows that privatised SOEs continue to benefit from government support in the form of low-interest loans and subsidies relative to private enterprises that have never been state-owned. Although there are clear improvements in performance post-privatisation, privatised SOEs continue to significantly under-perform compared to private firms.

Jeffrey L. Furman, Markus Nagler, Martin Watzinger, 31 March 2019

It is a concern amongst policymakers that the disclosure component of patents is insufficient in stimulating subsequent innovation. Using evidence on patent trends around Patent Depository Libraries in the US, this column shows that the availability of information on prior art positively impacts innovation in the field. In the pre-internet era, these libraries helped reduce geographical barriers to knowledge diffusion.

Bettina Peters, Mark Roberts, Van Anh Vuong, 30 March 2019

International markets can provide exporting firms with more opportunities to generate and introduce innovations and capitalise on their investments relative to purely domestic firms. Using German data, this column demonstrates that exporting firms introduce innovations more frequently than domestic firms and have higher economic gains from their innovations. Trade restrictions such as tariffs can affect a firm’s economic activities in foreign markets and also their R&D and innovation activities.

Semih Akcomak, Bastiaan Overvest, 22 March 2019

The European Commission plans to spend about €120 billion on research and innovation under mission-oriented programmes between 2021 and 2027. This column shows that planned spending is small both relative to the total R&D spending of individual EU countries and relative to previous missions. In addition, there is a lack of clarity on how missions will be determined, designed and governed. Experiences in other countries suggest that the Commission should find new ways of increasing funding to missions and increase clarity on the implementation of mission-oriented policies.

Stefanie Stantcheva, 19 March 2019

Stefanie Stantcheva of Harvard University discusses how interaction with 'better' inventors increases knowledge and improves inventions.

Philippe Aghion, 08 March 2019

Philippe Aghion, of the College de France and LSE, discusses work on merged datasets from the UK – one detailing occupation & wages, the other looking at R&D and investment.

Javier Miranda, Nikolas Zolas, 18 February 2019

Private households have often been disregarded as sources of invention and innovation, but evidence has begun to emerge of this sector’s importance. This column examines data from the US Patent and Trademark Office and the US Census Bureau to describe patented household innovations and characteristics of US household inventors, who are predominantly male, white, and US-born. It estimates that in between 2000 and 2011, patented household innovations generated a revenue flow of $1.7 billion, and calls for further efforts to understand the economic role of household innovations.

, 28 January 2019

This video summarises the ZEW Lunch Debate "Beyond Horizon 2020: Translating Public Research into Innovation". 

James Harrigan, Ariell Reshef, Farid Toubal, 23 January 2019

Economists have studied the nexus between labour demand, globalisation, and technology adoption for decades, but quantifying the relative importance of these factors is challenging. Using firm-level data from France, this column proposes a new measure of productivity based on the number of workers in technology-related occupations. It finds large effects of importing, ICT, and R&D on the relative demand for skilled workers through their effects on productivity. Interestingly, the demand for both skilled and unskilled workers rises when firms hire ‘techies’ or engage in offshoring.

Debora Revoltella, 22 January 2019

Europe is at risk of falling behind its global competitors. In a period of radical technological transformation, European firms are investing too little, with a gap both in tangible and intangible investment compared to the US. This column calls for a ‘retooling’ of Europe’s economy in relation to skills, innovation finance, the business environment, infrastructure, and deepening the Single Market.

Peter Egger, Nicole Loumeau, 16 January 2019

Innovative activity is unevenly distributed geographically, with regional characteristics such as global market accessibility or an innovation-promoting policy environment affecting the spatial distribution. Using global data on regional characteristics, regional patenting output, and innovation-promoting policy environments, this column examines the origins of innovation clusters, and particularly the role of R&D tax policy instruments, in attracting innovative firms. It estimates that innovation-promoting R&D tax policy instruments contribute to about one-tenth of the long-term economic growth around the globe.

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