Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems
Jena Economic Research Papers, Nr. 2007-018,
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.
What Determines the Efficiency of Regional Innovation Systems?
Jena Economic Research Papers, Nr. 2007-006,
We assess the efficiency of regional innovation systems (RIS) in Germany by means of a knowledge production function. This function relates private sector research and development (R&D) activity in a region to the number of inventions that have been registered by residents of that region. Different measures and estimation approaches lead to rather similar assessments. We find that both spillovers within the private sector as well as from universities and other public research institutions have a positive effect on the efficiency of private sector R&D in the respective region. It is not the mere presence and size of public research institutions, but rather the intensity of interactions between private and public sector R&D that leads to high RIS efficiency. We find that relationship between the diversity of a regions’ industry structure and the efficiency of its innovation system is inversely u-shaped. Regions dominated by large establishments tend to be less efficient than regions with a lower average establishment size.
Capturing the changes in the knowledge base underlying drug discovery and development in the 20th century and the adjustment of Bayer, Hoechst, Schering AG and E. Merck to the advent of modern biotechnology.
The so-called biotechnology revolution has changed the institutional and knowledge environment of the pharmaceutical industry. The industry incumbents have faced the challenge of adjusting to the new conditions for innovation in drug discovery and development. Drawing on the theoretical framework of the organizational capabilities of the firm, this contribution aims at capturing the changes in the knowledge environment and exploring the adjustment of 4 German corporations (2 companies rooted in the coal tar dyestuff industry and 2 traditional pharmaceutical companies) to the advent of modern biotechnology. Despite the firm-specific capabilities in organic chemical synthesis, the representatives of the coal tar dyestuff industry seem to have been better able to adjust to the external discontinuity in their knowledge environment.The existence of research and development activities, the science-based research tradition together with interactions to access the extramural knowledge base of the firms seem to have been crucial in the perception and adoption of the new technological possibilities of biotechnology after the 1970s, rather than prior competence in biotechnology or the employees with the skills to develop the capabilities to exploit it.