Innovation PolicyDr.BertSadowskiMScTechnischeUniversiteitTUeEindhovenUniversity of TechnologyWhere innovation starts
Innovation Policy Dr. Bert Sadowski MSc
StructureCourse review:Bringing everything back togetherToolsof innovationpolicySome recent policy discussiononstimulatingfibernetworksintheNetherlandsTechnischeUniversiteitTUEindhoveneUniversityofTechnology10/24/2013PAGE1EconomicsofInnovation2013
Structure • Course review: Bringing everything back together • Tools of innovation policy • Some recent policy discussion on stimulating fiber networks in the Netherlands Economics of Innovation 2013 10/24/2013 PAGE 1
CourseReviewTechnische UniversiteitTUeEindhovenUniversity ofTechnology10/24/2013PAGE2EconomicsofInnovation2013
Course Review Economics of Innovation 2013 10/24/2013 PAGE 2
Bringing everything back togetherProblemsituation(HC1).NLis“lagging behind"in terms innovativeMicro-performanceeconomicsDuetoinsufficientinvestmentbycompanies(BERD)·Definitions of innovations (HC2)InnovationDistinctionbetweenincrementalandradicalmanagementinnovations>problems stimulatingradicalinnovationseffectsonwholeeconomy(Apple)SourcesSourcesofinnovations(HC3).Variety of sources importantforinnovationR&Dandinnovativeperformance(HC4)PerformanceCDMmodel>characteristicsofinnovativefirmsasinput-outputscheme(differentoutputmeasures)>sizeimportantTechnischeUniversiteitTUEindhovenUniversityofTechnologyPAGE3EconomicsofInnovation201310/24/2013
Bringing everything back together • Problem situation (HC1) • NL is “lagging behind” in terms innovative performance • Due to insufficient investment by companies (BERD) • Definitions of innovations (HC2) • Distinction between incremental and radical innovations > problems stimulating radical innovations effects on whole economy (Apple) • Sources of innovations (HC3) • Variety of sources important for innovation • R&D and innovative performance (HC4) • CDM model > characteristics of innovative firms as input – output scheme (different output measures) > size important Innovation management Microeconomics Sources Performance Economics of Innovation 2013 10/24/2013 PAGE 3
Bringing everything back togetherInnovationInnovation and intellectual propertyPolicyrights (HC5)IPR.Whyintellectual propertyrights important>allowsappropriationofbenefits(patents)IndustrialDynamics and InnovationSectoral(HC6)perspectiveIndustrydynamicsmatter>lifecycles,dominantdesignMarketFailure,R&DSubsidiesandCriteriatoInnovation (HC7)interveneinWhentointervene>FormsofmarketmarketsfailureTechnische UniversiteitTUEindhovenUniversityofTechnologyPAGE4EconomicsofInnovation201310/24/2013
Bringing everything back together • Innovation and intellectual property rights (HC5) • Why intellectual property rights important> allows appropriation of benefits (patents) • Industrial Dynamics and Innovation (HC6) • Industry dynamics matter > life cycles, dominant design • Market Failure, R&D Subsidies and Innovation (HC7) • When to intervene > Forms of market failure IPR Sectoral perspective Innovation Policy Criteria to intervene in markets Economics of Innovation 2013 10/24/2013 PAGE 4
Bringing everything back togetherMarket structureandInnovation(Hc8)MarketDifferentmodelsoninnovationandmarketstructurestructure>examiningconcentrationinindustriesDiffusion/DiffusionandAdoptionofInnovation(Hc9)usersDiffusionmodelsandcharacteristicsofusersSystemicSystemiccharacterofinnovation(HC10)characterInnovationislinkedasasystemTechnischeUniversiteitTUEindhoven-UniversityofTechnology10/24/2013PAGE5EconomicsofInnovation2013
Bringing everything back together • Market structure and Innovation (HC8) • Different models on innovation and market structure > examining concentration in industries • Diffusion and Adoption of Innovation (HC9) • Diffusion models and characteristics of users • Systemic character of innovation (HC10) • Innovation is linked as a system Market structure Diffusion / users Systemic character Economics of Innovation 2013 10/24/2013 PAGE 5
Bringing everything back togetherStrategic management in networkNetworkindustries (HC12)markets.Ifinnovationislinked>networkexternalitieswithdifferentdynamics(Policyhas“BlindGiantDilemma')OpennessNetworkindustriesandopeninnovation(HC13)Openinnovation model> createsincentivesforsmall scaleinnovative entryTechnische UniversiteitTUEindhoven一University of TechnologyPAGE610/24/2013EconomicsofInnovation2013
Bringing everything back together • Strategic management in network industries (HC12) • If innovation is linked > network externalities with different dynamics (Policy has ‘Blind Giant Dilemma’) • Network industries and open innovation (HC13) • Open innovation model > creates incentives for small scale innovative entry Network markets Openness Economics of Innovation 2013 10/24/2013 PAGE 6
Bringing everything back togetherInnovationandlabormarkets(HC14)Effectsofinnovation onskillsstructureWagesin labormarkets>skills complementarytotechnology (computers)Technological changeandImportanceofinformationtechnologies(HC15)ICT·General purposetechnologiesandcomplementary innovation>ExplanationforfibertechnologiesInnovationInnovationpolicy(HC16)PolicyChoices>whatismarketandwhatisintervention,whichtools to useTechnische UniversiteitTUEindhoven一UniversityofTechnologyPAGE7EconomicsofInnovation201310/24/2013
Bringing everything back together • Innovation and labor markets (HC14) Effects of innovation on skills structure in labor markets > skills complementary to technology (computers) • Technological change and information technologies (HC15) • General purpose technologies and complementary innovation > Explanation for fiber technologies • Innovation policy (HC16) • Choices > what is market and what is intervention, which tools to use Wages Importance of ICT Innovation Policy Economics of Innovation 2013 10/24/2013 PAGE 7
InnovationpoliciesTechnische UniversiteitTUeEindhovenUniversityof Technology10/24/2013PAGE8EconomicsofInnovation2013
Innovation policies Economics of Innovation 2013 10/24/2013 PAGE 8
Innovationpolicy(G&Rbookchapter11)PoliciesaimedatprotectingIntellectualpropertyrights>Patenting>Hasthegrowthof patentingfacilitated innovation?(G&Rbookpp.299-302)IncentivesforEncouragingfirm-levelR&D.R&DTaxincentives,R&DGrants,etc.PoliciestowardsuniversitiesStimulatingentrepreneurship·Competition policyand regulation·GovernmentprocurementpolicyTechnische UniversiteitTUEindhoven-UniversityofTechnology10/24/2013PAGE9EconomicsofInnovation2013
Innovation policy (G&R book chapter 11) • Policies aimed at protecting Intellectual property rights > Patenting > Has the growth of patenting facilitated innovation? (G&R book pp. 299-302) • Incentives for Encouraging firm-level R&D • R&D Tax incentives, R&D Grants, etc. • Policies towards universities • Stimulating entrepreneurship • Competition policy and regulation • Government procurement policy Economics of Innovation 2013 10/24/2013 PAGE 9