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In May 2018, a new regulation, the General Data Protection Regulation (GDPR), on data protection came in the European Union into force. It requires firms to update their data protection strategy and may complicate the use of data related to individuals, with potentially adverse effects on product innovation. This study provides evidence on the likely impacts of the GDPR on innovation. We employ a conditional difference-in-differences research design and estimate firm fixed-effects models based on data from the German innovation survey. We find that the GDPR led to a substantial shift from radical to incremental product innovation. Our finding indicates that the GDPR stimulated firms to re-organise their data management in a more profound way than they would have done in the absence of the regulation, opening up opportunities for improving existing products. The additional resources needed for complying with the GDPR limited their capacity for developing entirely new products. [ABSTRACT FROM AUTHOR]

Innovation activities of firms tend to be highly persistent. Yet, little is still known about potential spatial contingencies affecting the degree of persistence. This paper analyses the influence of local knowledge spillovers on firms' persistence in innovation activities. Using a representative panel data set of firms in Germany from 2002 to 2016, complemented by detailed geographic information of patent activity over discrete distances to proxy local knowledge spillovers, we find that the local patenting activity positively moderates persistency in innovation activities. Estimations with different distance bands show that the strength of knowledge spillovers that contribute to innovation persistence attenuates with increasing distance and vanishes beyond 30 kilometres in manufacturing and beyond 20 kilometres in services. [ABSTRACT FROM AUTHOR]

The empirical evidence that innovation policies often lead to innovation additionality is long-standing. However, innovation is an intermediate outcome. Innovations are important to the extent that they contribute to some broader goal, such as the competitiveness of firms and economies. To this end, we take exporting as an important indicator of competitiveness and investigate whether innovation interventions lead to exporting outcomes. Using the Mannheim Innovation Panel, the current study explores whether innovation interventions at various administrative levels associate with changing export behaviors among German Small- and Medium-sized Enterprise (SMEs). Our results provide evidence of the scope for policymakers to employ innovation interventions as export policy. [ABSTRACT FROM AUTHOR]

Skilled labour is a key input to the innovation process. A shortage in supply may impede innovation activities and result in lower productivity gains. While governments are concerned about these likely negative impacts, there is only limited empirical evidence whether and to what extent skills shortage affects innovation activities. The paper addresses this question using panel data from two waves of the German innovation survey. We measure skills shortage by job openings that could not be filled at all, not with the required skills or only with significant delay, distinguishing different skill levels. We analyse whether skills shortage is linked to stopping or abandoning innovation projects. Endogeneity issues are tackled by instrumental variable estimation techniques. Our results show that innovative firms are more likely to be subject to skills shortage, whereas skills shortage induces the cancellation of innovation projects. [ABSTRACT FROM AUTHOR]

Obtaining indicators on the innovation activities of firms has been a challenge in economic research for a long time. The most frequently used indicators - R&D expenditures and patents - provide an incomplete picture as they represent inputs in the innovation process. Output measurement of innovation has strongly relied on survey data such as the Community Innovation Survey (CIS). However, this type of data suffers from several shortcomings typical of surveys, including incomplete coverage of the business sector, subjectivity concerns, low timeliness, and limited comparability across industries and firms. An alternative that has attracted growing interest is to use big data sources to collect innovation data at the firm level. This paper discusses recent attempts to use digital big data sources including websites and social media to generate firm-level innovation indicators. It summarises the main challenges of using big data and proposes practical guidelines for their use, including a research agenda that should be useful to practitioners as well as users of statistics derived from big data. • The paper discusses recent attempts to use digital big data sources to generate firm-level innovation indicators. • The paper summarises the main challenges of using big data. • The paper proposes practical guidelines and presents a research agenda. [ABSTRACT FROM AUTHOR]

We analyse the geographic proximity of innovative firms to different types of knowledge sources in an urban environment on a microgeographic scale. Based on a comprehensive panel data set of manufacturing and service firms in the German capital city Berlin, we investigate the characteristics of firms' knowledge environment while differentiating by the type of innovation. Geocoded firm locations at the level of individual addresses allows us to describe the knowledge environment of firms on a very fine microgeographic scale. We find that innovative firms are located in places with higher numbers of same-sector firms, more start-ups and a higher inflow of other firms. They also locate in closer proximity to universities and research institutes. These differences decay rapidly within a few metres (50–250 m), indicating a truly microgeographic scope of knowledge sources in urban environments. [ABSTRACT FROM AUTHOR]

The paper analyses how geographical clustering of beneficiaries might affect the effectiveness of public innovation support programs. The geographical proximity of firms operating in the same industry or field of technology is expected to facilitate innovation through knowledge spillovers and other localization advantages. Public innovation support programs may leverage these advantages by focusing on firms that operate in a cluster. We investigate this link using data from a large German program that co-funds R&D projects of SMEs in key technology areas called 'Innovative SMEs'. We employ three alternative cluster measures which capture industry, technology and knowledge dimensions of clusters. Regardless of the measure, firms located in a geographical cluster are more likely to participate in the program. Firms being part of a knowledge-based cluster significantly increase their chance of receiving public financial support. We find no effects, however, of geographical clustering on the program's effectiveness in terms of input or output additionality. [ABSTRACT FROM AUTHOR]

This paper analyzes the use and effectiveness of patents and trade secrets designed to protect innovation. While previous studies have usually considered patents and trade secrets as substitutes for one another, we investigate to what extent and in what situations the two protection methods are used jointly. We identify protection strategies for single innovation firms and hence overcome the assignment problem of existing empirical studies, that is, whether firms using both protection methods do so for the same innovation or for different innovations. Employing firm panel data from Germany, we find fairly few differences between the determinants for choosing secrecy and patenting. Single innovators that combine both strategies, 39% of the group, tend to aim at a higher level of innovation and act in a more uncertain technological environment. Firms combining both protection methods yield significantly higher sales with new-to-market innovations, providing some evidence for a complementarity of the two protection methods. [ABSTRACT FROM AUTHOR]

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Abstract: Empirical analyses of eco-innovation determinants have rarely been able to distinguish between different areas of environmental impact. The present paper tries to close this gap by employing a new and unique dataset based on the German Community Innovation Survey, conducted in 2009. The main purpose of this paper is to test whether different types of eco-innovation (according to their environmental impacts) are driven by different factors. Beside a complex set of different supply, firm-specific, and demand factors, the literature on determinants of eco-innovation accentuates the important role of regulation, cost savings and customer benefits. We find that current and expected government regulation is particularly important with regard to pushing firms to reduce air (e.g. CO2, SO2 or NOx) as well as water or noise emissions, avoid hazardous substances, and increase recyclability of products. Cost savings are an important motivation for reducing energy and material use, pointing to the role of energy and raw material prices as well as taxation as drivers for eco-innovation. Customer requirements are another important source of eco-innovations, particularly with regard to products with improved environmental performance and process innovations that increase material efficiency, and reduce energy consumption, waste and the use of dangerous substances. Firms confirm a high importance of expected future regulations for all environmental product innovations. [Copyright &y& Elsevier]

This paper employs the so-called Lead Market approach to assess for European Union member states the attractiveness of the national market as a test market for innovations in the Textile Industry that later will become successful also in other countries. The basic idea behind the Lead Market Approach is that country-specific demand-side factors shape the design of an innovation (i.e. its technical specifications). At the same time, this innovation design is critical for the global success of innovations. National markets that prefer designs that later become globally accepted may be called Lead Markets. Literature has identified five factors of national demand that determine a country's Lead Market potential: price advantage, demand advantage, export advantage, transfer advantage and market structure advantage. The aim of this paper is to identify and operationalise indicators to measure and compare the Lead Market properties of EU countries. The indicators used are taken from the Community Innovation Surveys (CIS-3), the Eurostat/OECD PPP and Expenditure Database at BH level, the UNCTAD FDI-Database, the EU Business Demography Statistics, and the Eurostat Foreign Trade Database (Comext). Based on the Lead Market analysis, implications for policy makers are outlined. [ABSTRACT FROM AUTHOR]

This paper analyses the role of creative industries in affecting an economy's innovation performance. Conducting a survey of more than 2,000 creative industry enterprises, we show that creative industries are among the most innovative sectors in the economy. They support innovation in a variety of other sectors through creative inputs, such as ideas for new products, supplementary products and services or marketing support for product innovations. They are also an important user of new technology and demand innovations from technology producers, particularly information and communication technologies. Own innovative activities are a key driver for supporting innovation. Creative industries are no homogenous sector, however. While software and advertising show the strongest links to industrial innovation, architecture and content providers contribute rather little.[1] [1] This paper has originated from a broader study on the role of creative industries as part of an innovation system which was funded by the initiative 'creative industries Austria' within the Austrian Chamber of Commerce. The full report is available in German language (see Georgieff et al. 2008). [ABSTRACT FROM AUTHOR]

The paper investigates thresholds and options for financing innovation activities in manufacturing and services using data from the German Community Innovation Survey (CIS) 2007. We analyze the significance of financing restrictions, especially the role of internal financing, external capital, and public funding, and discuss applicable management options to cope with challenges in markets and technology. We find that most firms rely mainly on self-financing means to start an innovation project. As a consequence of information asymmetries, private investors, e.g. banks, are uneager to invest in risky innovative ventures. Public funding might complement internal financing in order to balance shortcomings in private capital provision, but these sources have to be identified and convinced. In sum, the empirical work states that financing innovation is an entrepreneurial task, and the management of innovation needs strategic thinking as well as a well defined capital portfolio policy. [ABSTRACT FROM AUTHOR]

This paper studies the effects of local market attributes on local firms’ exports of innovations. Our starting point are three common hypotheses. First, innovations are a major determinant for the export performance of firms. Second, user–producer interaction is an important factor for successful innovations. Third, user–producer interaction is most efficient in close proximity. Taken together this would mean that intense local user–producer interaction increases exports. This reasoning contradicts a main proposition in international management that overt local responsiveness may be hampering export chances of a firm. In order to generate global innovations, an international firm should look at the world market instead, for instance by identifying the global common denominator of national preferences. Yet, many local innovations have become globally successful. This paper investigates the question to what extent local demand is capable of inducing innovations that are export effective. We utilize data from the German innovation survey of 4,786 firms in the manufacturing and service industries. In this survey firms were asked about the sources of their innovation and their export activities. We find evidence that the export orientation and the domestic demand structure stimulate export success. [ABSTRACT FROM AUTHOR]

The present study investigates the effects of energy-related technologies on economic performance at firm level. We distinguish clearly between adoption and use of energy-related technologies (process innovation in the broad sense) and product innovation in energy-related fields. We take into consideration four energy-related policy instruments (and expected demand for energy-related new products and services). We investigate the possibility of indirect effects of policy on performance via adoption or innovation by interacting adoption and innovation variables with policy instrument dummies. We test our hypotheses not only for the pooled data but also separately for the three countries (Austria, Germany, Switzerland) that are taken into consideration in this study. We find a positive direct effect of investment expenditures for energy-related technologies on labour productivity – that measure intensity of adoption of energy-related technologies – and a positive indirect effect of energy taxes via investment in energy-related technologies. Further, we find positive direct and indirect effects of regulation , standards and voluntary agreements via the adoption of production-related technologies and for technologies for the generation of renewal energy sources . We find neither direct nor indirect effects of the sales of innovative energy-related products – that measure product innovation in energy-related products – on labour productivity. No differences among the three countries could be detected with respect to investment in energy-related technologies and sales of innovative energy-related products. The indirect effects of regulation and standards and voluntary agreements can be primarily traced back to German firms. [ABSTRACT FROM AUTHOR]