20 years of innovation policy in East Germany – from a pure “survival support” to high-tech subsidy
Jutta Günther, Nicole Nulsch, Katja Wilde
Wirtschaft im Wandel,
20 Jahre Deutsche Einheit - Teil 2 -
2010
Abstract
The article uses the occasion of “20 years German re-unification” in order to provide an overview of the range of innovation policy schemes in East Germany with the intention to identify changing patterns or paradigms in its philosophy and priorities over time. In general, innovation policy schemes aim at increasing research and development (R&D) activities of companies in order to strengthen their competitiveness as market incentives for R&D are usually too low (problem of market failure). However, in East Germany in the early 1990s the situation was different. At the very beginning, the transformation process in East Germany was accompanied by innovation policy schemes that aimed at the pure maintenance of industrial research and the stock of R&D personnel since the potential for innovation was at a risk to be eliminated completely. In the late 1990s the intention of innovation policies changed. Instead of financial support primarily for human resources, innovation policy schemes since then focused on the support of cooperation projects between different research entities (companies and scientific organizations) and, later on, also the setup of networks in order to close the economic differences between East and West Germany.
Read article
Organization and Financing of Innovation, and the Choice between Corporate and Independent Venture Capital
Paolo Fulghieri, Merih Sevilir
Journal of Financial and Quantitative Analysis,
No. 6,
2009
Abstract
This paper examines the impact of competition on the optimal organization and financing structures in innovation-intensive industries. We show that as an optimal response to competition, firms may choose external organization structures established in collaboration with specialized start-ups where they provide start-up financing from their own resources. As the intensity of the competition to innovate increases, firms move from internal to external organization of projects to increase the speed of product innovation and to obtain a competitive advantage with respect to rival firms in their industry. We also show that as the level of competition increases, firms provide a higher level of financing for externally organized projects in the form of corporate venture capital (CVC). Our results help explain the emergence of organization and financing arrangements such as CVC and strategic alliances, where large established firms organize their projects in collaboration with external specialized firms and provide financing for externally organized projects from their own internal resources.
Read article
European Commission, Leibniz Association and IWH Discuss Innovation Related Policy in Transitions Regions
Björn Jindra, Katja Wilde
Wirtschaft im Wandel,
No. 7,
2009
Abstract
On February 17, 2009, the Halle Institute for Economic Research (IWH) and the Leibniz Association (WGL) held the final conference of the EU-project “Understanding the Relationship between Knowledge and Competitiveness in the Enlarging European Union” (U-know) in Brussels. The research dealt with systemic aspects of innovation and knowledge transfer as well as the development of R&D (research and development) and innovation related policy. Thereby, a particular emphasis was put on the challenges facing the new EU member states and East Germany. The research project proved to be very productive with 54 research papers in refereed journals as well as 33 articles in edited volumes.
The aim of the conference was to present and discuss the main results of the U-know project with experts from the industry as well as the political and scientific community. Within four parallel sessions (Enterprises and markets, Public science and industry links, Systems and governance, Role of institutions), research output was presented. Representatives of the EU Commission commented directly on the presentations with a view on policy implications. In a final panel, all participants underlined the increasing importance of education, R&D, and innovation related policy to support the competitiveness of the EU-15 countries as well as the catching-up process of the new EU member states. The conference has raised significant interest both within the scientific community and the EU Commission.
Read article
The Role of the Intellectual Property Rights Regime for Foreign Investors in Post-Socialist Economies
Benedikt Schnellbächer, Johannes Stephan
IWH Discussion Papers,
No. 4,
2009
Abstract
We integrate international business theory on foreign direct investment (FDI) with institutional theory on intellectual property rights (IPR) to explain characteristics and behaviour of foreign investment subsidiaries in Central East Europe, a region with an IPR regime-gap vis-à-vis West European countries. We start from the premise that FDI may play a crucial role for technological catch-up development in Central East Europe via technology and knowledge transfer. By use of a unique dataset generated at the IWH in collaboration with a European consortium in the framework of an EU-project, we assess the role played by the IPR regimes in a selection of CEE countries as a factor for corporate governance and control of foreign invested subsidiaries, for their own technological activity, their trade relationships, and networking partners for technological activity. As a specific novelty to the literature, we assess the in influence of the strength of IPR regimes on corporate control of subsidiaries and conclude that IPR-sensitive foreign investments tend to have lower functional autonomy, tend to cooperate more intensively within their transnational network and yet are still technologically more active than less IPR-sensitive subsidiaries. In terms of economic policy, this leads to the conclusion that the FDI will have a larger developmental impact if the IPR regime in the host economy is sufficiently strict.
Read article
Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems
Michael Fritsch, Viktor Slavtchev
Determinants of Innovative Behaviour,
2008
Abstract
Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs’ externalities). We test the impact of both MAR as well as Jacobs’ externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.
Read article
Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems
Michael Fritsch, Viktor Slavtchev
Jena Economic Research Papers, Nr. 2007-018,
No. 18,
2007
Abstract
Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs’ externalities). We test the impact of both MAR as well as Jacobs’ externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.
Read article
Can EU Policy Intervention Help Productivity Catch-Up?
Johannes Stephan, P. Holmes, J. Lopez-Gonzales, C. Stolberg
Closing the EU East-West Productivity Gap - Foreign direct Investment, Competitiveness, and Public Policy,
2006
Abstract
"A product of the Framework V research project, this book addresses one of the key problems facing the EU today: Why is the ‘new’ EU so much poorer than the ‘old’, and how will EU enlargement help to solve the problem? Focusing on the productivity problems underlying the East-West gap, it looks in particular at the role that foreign investment and R&D can play in closing it. Against that background, the book assesses what role proactive development policy might play in attacking the roots of low social productivity. Concluding that there will be a clear-cut process of convergence between East and West, albeit an incomplete one, it finishes with an assessment of the patterns of competitiveness, East and West, that are likely to emerge from this process of incomplete convergence."
Read article