Aaron Chatterji, Edward Glaeser, William Kerr, 04 June 2013

Contrary to received wisdom, entrepreneurial clusters in the US – like Silicon Valley – are seen as success stories. But what is the rationale behind these clusters? Do they actually work? This column reviews the evidence and discusses localised policies currently being pursued in the US. In general, our understanding of what works remains limited and economists should more thoroughly pursue researching the effects of entrepreneurial clusters.

Alberto Galasso, Mark Schankerman, 14 May 2013

Do patents encourage innovation? This column presents a new analysis, suggesting that patent rights block cumulative innovation only in very specific environments. To encourage innovation, remedial government policies should be targeted; a ‘broad based’ scaling back of patent rights is unlikely to be appropriate. Policies and institutions should facilitate more efficient licensing, promoting cumulative innovation without diluting the innovation incentives that patents provide.

Josh Lerner, 21 March 2013

Josh Lerner of Harvard Business School talks to Romesh Vaitilingam about his book "The Architecture of Innovation: The Economics of Creative Organizations". They discuss a variety of issues around the challenges of innovation, including corporate venturing, venture capital-based enterprises, patents and public investment in science. The interview was recorded in Washington, DC, at the annual meeting of the Toulouse Network on Information Technology in September 2012.

Pierre-Richard Agénor, Otaviano Canuto, Michael Jelenic, 21 December 2012

Many of the emerging economies of the last two decades are now ensnared by ‘the middle-income trap’, in which middle-income countries don’t quite push through to high income status. This column presents recent research suggesting that, if governments act early and decisively to improve access to advanced infrastructure, enhance the protection of property rights, and reform labour markets, trapped economies – like their East Asian counterparts in the 1990s – can push on through.

Mika Maliranta, Niku Määttänen, Vesa Vihriälä, 19 December 2012

Do the ‘cuddly’ Nordic countries free ride on the ‘cut-throat’ incentives for innovation in US-style economies? Don’t PCs, the internet, Google, Windows, iPhones and the Big Mac speak for themselves? This column argues that, despite a higher overall tax burden and more generous safety nets, the Nordics have generated at least as much – if not more – innovation than the US. So far, ‘cut-throat’ capitalism has not been the only road to an innovative economy.

Federico Etro, 30 November 2012

Art, as any form of creativity, advances through innovations. But what is the cause of new artistic ideas? What can art history tell us about the relationship between demand and innovation? This column argues that during the Renaissance, it was demand for art – and entrepreneurial painters seeking to profit – that drove greats such as Titian, Tintoretto, and Canaletto to innovate.

Johan Hombert, Adrien Matray, 12 October 2012

Innovation is the heart of economic growth. This column presents evidence that the structure of a nation’s banking sector matters for innovation. The authors present evidence that when the banking market is very competitive and dominated by large banks, lenders are less able to fund innovation, as lending relationships can no longer be sustained.

Robert J. Gordon, 11 September 2012

CEPR Policy Insight 63 argues that innovation does not have the same potential to create growth in the future as in the past in the US.

David Greenaway, 14 June 2012

This joint BIS-CEPR-ESRC eBook looks at the UK’s medium-term growth prospects and the role that policy might have in shaping the economy’s growth trajectory once it emerges from recession.

Noboru Kawahama, 22 March 2012

Competition may drive down prices but it also drives down profits – and some would argue innovation as well. How should policymakers balance the short-term need for competition with the the long-term need for innovation? This column explores the idea of ‘innovation and competition policy’ rather than just ‘competition poliicy’.

Maria Guadalupe, Olga Kuzmina, Catherine Thomas, 09 September 2011

Studies have shown that foreign-owned firms are typically more productive. This column presents evidence from Spain that suggests this is mainly due to foreign firms buying the most productive domestic companies.

Thomas Meyer, 19 August 2011

Against the backdrop of noise about the damage financial markets can cause, this column focuses on the positives. It presents an analysis of innovation at 1,200 firms worldwide and finds that financial markets usually award a premium to innovative firms, though this premium differs across countries. Economies with more active financial markets have higher innovation – which may be a driver of faster productivity growth.

Aoife Hanley, Wan-Hsin Liu, Andrea Vaona, 24 March 2011

A decade ago economic theory might have suggested that Chinese innovation would be “piggybacking” on the West, taking advantage of the widely available machines and equipment imported from those economies. But using data for 2001 to 2008, this column finds that while foreign investment may once have fuelled technological advancement, it has lost ground to domestic financing channelled within a stronger and ever-improving Chinese financial system.

Sergey Lychagin, John Van Reenen, Margaret Slade, Joris Pinkse, 25 October 2010

Why do local policymakers fight so hard to attract research and development labs to their area? This column provides a possible explanation. Using patent data, it finds a strong link between R&D and growth caused by knowledge spillovers between firms.

Jeremiah Dittmar, 01 October 2010

The movable type printing press was the great innovation in early modern information technology, but until now, little evidence has been found of an impact on growth. Jeremiah Dittmar, who was then at American University in Washington, DC, talks to Romesh Vaitilingam about his research, which seems to resolve this precursor of the Solow paradox. The interview was recorded at the annual congress of the European Economic Association in Glasgow in August 2010.

Lant Pritchett, Martina Viarengo, 20 August 2010

In the World Cup, countries rely not on the average quality of their footballers, but on the quality of their best footballers. Could superstars also be crucial in economic competition? This column reveals that each year Mexico produces fewer than 6,000 world class mathematicians at age 15. If superstars do play any role in economic performance then this is particularly problematic, especially since the dominant policy attention is focused elsewhere.

Jennifer Hunt, 22 May 2010

American women leave science and engineering at a higher frequency than men. This column suggests that the gender gap is explained by women’s relative dissatisfaction with pay and promotion opportunities. This gap is correlated with a high share of men in the industry. Remedies should therefore focus on such fields with a high share of male workers.

Nune Hovhannisyan, Wolfgang Keller, 20 April 2010

Volcano-linked flight restrictions have brought Europe’s business travel to a halt; does it matter? This column describes recent research that demonstrates that short-term cross-border travel is critical to technology transfer and innovation – crucial factors behind economic growth.

Josh Lerner, 12 March 2010

Josh Lerner of Harvard Business School talks to Vox about the policies that governments employ to encourage venture capital and entrepreneurial activity, drawing on the findings in his book, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to Do About It. The interview was recorded in London in January 2010.

Reinhilde Veugelers, Philippe Aghion, David Hemous, 09 December 2009

Mitigating climate change while maintaining economic growth will require a wide portfolio of technologies. This column says too little has been done to turn on the “green innovation machine”. It says governments in developed economies should price carbon, subsidise research, and facilitate technology transfer to developing countries.

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