Search

Innovation activities in high technology industries provide considerable challenges for technology and innovation management. In particular, since these industries have a long history of radical innovations taking place through distinct industry cycles of higher and lower demand, firms frequently consider the option to use acquisitions as a means for technology sourcing. The paper investigates this behaviour for three high technology industries, namely semiconductor manufacturing, biotechnology and electronic design automation which is a specific sub-segment of the semiconductor industry. It analyses the association of firm characteristics with different aspects of acquisition behaviour with a particular focus being put on innovation-related firm characteristics. The paper confirms a substitutive relationship between acquisitions and own research activities as well as between own and acquired firm patenting, but also finds that firm size, financial conditions and geographical origin of the firm matter for acquisition behaviour.

Innovation activities in high tech industries provide considerable challenges for technology and innovation management. In particular, firms frequently face significant technological challenges since these industries has a long history of radical innovations which are taking place through distinct industry cycles of higher and lower demand. The paper investigates these issues for three high-tech industries, namely semiconductor manufacturing, biotechnology and electronic design automation which is a specific sub-segment of the semiconductor industry. It analyses the association of firm characteristics with different aspects of acquisition behaviour. Particular focus is put on innovation-related firm characteristics. The paper finds that the determinants for acquisitions are mostly related to firm size, financial conditions and geographical origin of the firm. Only for biotechnology, a substitutive relationship is identified between acquisitions and own research activities.

Die Entwicklung und Produktion von Lithium-Ionen-Batterien für Fahrzeuganwendungen hat für die Automobilindustrie strategische Bedeutung. Ausschlaggebend für den neuen Markt für Batteriespitzentechnologie ist die Nachfrageentwicklung für Mild-, Voll- und Plug-in-Hybridfahrzeuge sowie für reine batteriebetriebene Elektrofahrzeuge. Ferdinand Dudenhöffer, Universität Duisburg-Essen, diskutiert die Nachfrageentwicklungen für elektrifizierte Antriebe und die Angebotsstrukturen auf dem Markt für Hochleistungsstromspeicher. Er argumentiert, dass es in Europa gelingen kann, eine leistungsfähige Lithium-Ionen-Batterieindustrie für automobile Anwendungen aufzubauen. Geschieht dies, kann mit einem hohen Wertschöpfungspotential für Europa gerechnet werden.

In jüngster Zeit haben sowohl der Bund als auch einige Länder ihr Instrumentarium zur Förderung von Forschung, Entwicklung und Innovation aufgerüstet. Der Freistaat Sachsen setzt eher auf schon lange bewährte Maßnahmen und Programme. Die relativ hohe Innovatorenquote im sächsischen verarbeitenden Gewerbe und die sich weiter verbessernde Performance der Unternehmen bestätigen die Wirksamkeit des eingesetzten innovationspolitischen Maßnahmenbündels.

This paper examines the impact of locational choice as a firm strategy to access knowledge spillovers from universities. Based on a large dataset of publicly listed, high-technology startup firms in Germany, we test the proposition that proximity to the university is shaped by different spillover mechanisms—research and human capital—and by different types of knowledge spillovers—natural sciences and social sciences. The results suggest that spillover mechanisms as well as spillover types are heterogeneous. In particular, the evidence suggests that new knowledge and technological-based firms have a high propensity to locate close to universities, presumably in order to access knowledge spillovers. However, the exact role that geographic proximity plays is shaped by the two factors examined in this paper—the particular knowledge context, and the specific type of spillover mechanism.

Die New Economy ist durch die Konvergenz zuvor getrennter Bereiche (Telekommunikation, Medien, Informationstechnik, Internet) gekennzeichnet, die gegenwärtig unterschiedlichen regulatorischen Rahmenbedingungen unterworfen sind. Ist dieser• heterogene Ordnungsrahmen noch geeignet, um den ökonomischen Strukturen der New Economy Rechnung zu tragen, oder sind grundlegende Veränderungen erforderlich?

Der Staat übt über die Ausgestaltung der gesetzlichen und institutionellen Rahmenbedingungen einen entscheidenden Einfluß auf die Forschung im Bereich der Zukunftstechnologien und die Innovationstätigkeit der Unternehmen aus. Dr. Gunter Festel und Professor Peter Oberender analysieren die Zusammenhänge am Beispiel der Gentechnik.

We show that every time a local economy generates a new job by attracting a new business in the traded sector, a significant number of additional jobs are created in the non-traded sector. This multiplier effect is particularly large for jobs with high levels of human capital and for high tech industries. These findings are important for local development policies, as they suggest that in order to increase local employment levels, municipalities should target high tech employers with high levels of human capital.

Governments purchase everything from airplanes to zucchini. This paper investigates whether the technological intensity of government demand affects corporate R&Dactivities. In a quality-ladder model of endogenous growth, we show that an increase in the share of government purchases in high-tech industries increases the rewards for innovation, and stimulates private-sector R&D at the aggregate level. We test this prediction using administrative data on federal procurement performed in US states. Both panel fixed effects and instrumental variable estimations provide results in line with the model. Our findings bring public procurement within the realm of the innovation policy debate.

Dass die Wandlungsfähigkeit der deutschen Industrie neben ihrer Flexibilität einer ihrer entscheidenden Wettbewerbsvorteile ist, ist spätestens seit der letzten Wirtschaftskrise und dem daran anschließenden Aufholprozess offensichtlich. Umso erstaunlicher ist es, dass die Erfassung dieser wichtigen Fähigkeit bisweilen noch größte Schwierigkeiten bereitet. Ihr systematisches Management erfordert neben der Kenntnis geeigneter technischer und organisatorischer Befähiger auch Messkonzepte, die eine praktisch handhabbare Operationalisierung als strategische Zielgröße unterstützen. Um dieser Frage nachzugehen, hat das Fraunhofer ISI die Wandlungsfähigkeitspotenziale sowie -befähiger erstmals systematisch am Beispiel der deutschen Hightech-Industrie erfasst und einem vergleichenden Benchmarking zugeführt. Die Ergebnisse können Unternehmen helfen, Stärken und Schwächen ihrer Wandlungsfähigkeit im Vergleich zu anderen Firmen zu analysieren und konkrete Ansatzpunkte zu ihrer Steigerung aufzudecken.

In order to investigate the effectiveness of science and technology industrial parks (STIPs), this study examines data on high-tech firms within and outside the STIPs in China, while paying special attention to the issues related to agglomeration and congestion. The main finding is that the negative effect of congestion on productivity is highly likely to outweigh the positive productivity effect of agglomeration economies within the STIPs but not among high-tech firms outside the STIPs. The paper also finds that the productivity of high-tech firms, whether within or outside the STIPs, are positively associated with foreign direct investment and the academic activities of local universities in the same city., http://www.grips.ac.jp/list/jp/facultyinfo/sonobe_tetsushi/

Similar to the creation and distribution of new knowledge through industrial R&D and university research, entrepreneurial activity tends to vary across regions. Therefore the regionalized production of new knowledge is a prerequisite of entrepreneurial innovation. Based on endogenous growth theory, in particular the so-called Griliches-Jaffe-Model of regional knowledge production, we investigate industrial and university characteristics as determinants of technologically oriented entrepreneurship. Using hand-collected data from multiple sources, our results clearly show that high technology entrepreneurship is highly dependent on regional knowledge production by industry and university, while medium technology entrepreneurship does largely not dependent on these factors.

We develop a sequential trade model of Iceberg order execution in a limit order book. The Iceberg-trader has the freedom to expose his trading intentions or (partially) shield the true order size against other market participants. Order exposure can cause drastic market reactions ('market impact') in the end leading to higher transaction costs. On the other hand the Iceberg trader faces a loss-in-priority when he hides his intentions, as most electronic limit order books penalize the usage of hidden liquidity. Thus the Iceberg-trader is faced with the problem to find the right trade-off. Our model provides optimal exposure strategies for Iceberg traders in limit order book markets. In particular, we provide a range of analytical statements that are in line with recent empirical findings on the determinants of trader's exposure strategies. In this framework, we also study the market impact also market impact of limit orders. We provide optimal exposure profiles for a range of hightech stocks from the US S&P500 and how they scale with the state-of-the-book. We finally test the Iceberg's performance against the limit orders and find that Iceberg orders can significantly enhance trade performance by up to 60%.

This paper addresses the question of whether government procurement can work as a de facto innovation policy tool. We develop an endogenous growth model with quality-improving in-novation that incorporates industries with heterogeneous innovation sizes. Government de-mand in high-tech industries increases the market size in these industries and, with it, the in-centives for private firms to invest in R&D. At the economy-wide level, the additional R&D induced in high-tech industries outweighs the R&D foregone in all remaining industries. The implications of the model are empirically tested using a unique data set that includes federal procurement in U.S. states. We find evidence that a shift in the composition of government purchases toward high-tech industries indeed stimulates privately funded company R&D.

The economic expansion of the late 1990s created many opportunities for business creation in Silicon Valley, but the opportunity cost of starting a business was also high during this period because of the exceptionally tight labor market. A new measure of entrepreneurship derived from matching files from the Current Population Survey (CPS) is used to provide the first test of the hypothesis that business creation rates were high in Silicon Valley during the “Roaring 90s.” Unlike previous measures of firm births based on large, nationally representative datasets, the new measure captures business creation at the individual-owner level, includes both employer and non-employer business starts, and focuses on only hi-tech industries. Estimates indicate that hi-tech entrepreneurship rates were lower in Silicon Valley than the rest of the United States during the period from January 1996 to February 2000. Examining the post-boom period, we find that entrepreneurship rates in Silicon Valley increased from the late 1990s to the early 2000s. Although Silicon Valley may be an entrepreneurial location overall, we provide the first evidence that the extremely tight labor market of the late 1990s, especially in hi-tech industries, may have suppressed business creation during this period.

It is commonly believed that the business environment in developing countries does not allow productive technology-based entrepreneurship to flourish. In this paper, we draw on the experience of Indian software firms where entrepreneurial growth has belied these predictions. This paper argues that the business models chosen by Indian firms were those that best aligned the country's abundant labour resources and advantages to global demand. Many potentially higher value added opportunities struggled to attain success, but the qualitative value of experimental failures and the capability gaps they exposed was invaluable for collective managerial learning in the industry. Second, the paper also shows that the presence of growth opportunities and the success of firms stimulated institutional evolution to promote entrepreneurial growth. Last we show that the distinctive aggregate contribution of entrepreneurial firms was that they outperformed business houses and multinational subsidiaries in their more productive use of available capital resources whilst achieving similar levels of growth in output and employment. This paper draws upon an earlier shorter paper co-authored with Mike Hobday and titled Overcoming Development Adversity: How Entrepreneurs Led Software Development in India.

Der Freistaat Bayern hat im Jahr 1999 mit der High-Tech-Offensive als erstes Bundesland in Deutschland eine landesweite »Clusterpolitik« eingeführt, die insbesondere auf Unternehmen in fünf Technologiefeldern ausgerichtet war. Die Politikmaßnahme sollte die Infrastruktur stärken und damit die Kooperation zwischen Unternehmen, zwischen Unternehmen und dem Forschungssektor sowie zwischen Unternehmen und dem Finanzsektor fördern und damit die Innovationsaktivität von Unternehmen stärken. Unter Verwendung eines Differenz-in-Differenzen-Ansatzes und von Daten aus dem ifo Innovationstest wird in diesem Beitrag gezeigt, dass die bayerische Politikmaßnahme eine positive Wirkung auf die Innovationsaktivität der Unternehmen in Bayern hatte. Unternehmen in einem der fünf Technologiefelder in Bayern weisen durch die Politikmaßnahme in den folgenden Jahren eine um 5,77 Prozentpunkte höhere Wahrscheinlichkeit zu innovieren auf.

Using a country-industry panel dataset (EUKLEMS) we uncover a robust empirical regularity, namely that high-risk innovative sectors are relatively smaller in countries with strict employment protection legislation (EPL). To understand the mechanism, we develop a two-sector matching model where firms endogenously choose between a safe technology with known productivity and a risky technology with productivity subject to sizeable shocks. Strict EPL makes the risky technology relatively less attractive because it is more costly to shed workers upon receiving a low productivity draw. We calibrate the model using a variety of aggregate, industry and micro-level data sources. We then simulate the model to reflect both the observed differences across countries in EPL and the observed increase since the mid-1990s in the variance of firm performance associated with the adoption of information and communication technology. The simulations produce a differential response to the arrival of risky technology between low- and high-EPL countries that coincides with the findings in the data. The described mechanism can explain a considerable portion of the slowdown in productivity in the EU relative to the US since 1995.

The aim of this paper is to test how geographical and technological proximity relate to a particular industry's innovative output. Two mechanisms are therefore tested, i.e. agglomeration economies and the regional exploitation of technological proximity. A new dataset is applied, which includes German patent applications from within the period 1995 to 2006. Four industries are considered, two of which are science-based, whereas the remaining two are specialised supplier industries. While diversity is associated with high innovative output in the specialised supplier industries, the results for specialisation are mixed. However, all industries seem to benefit, at least to a certain degree, from the regional re-combination of their own technologies with those of specific key industries.

Better understanding the innovative process of renewable energy technologies is important for tackling climate change. Though concentrating solar power is receiving growing interest, innovation studies so far have explored innovative activity in solar technologies in general, ignoring the major differences between solar photovoltaic and solar thermal technologies. This study relies on patent data to examine international innovative activity in concentrating solar power technologies. Our unique contribution, based on engineering expertise and detailed datawork, is a classification system matching solar thermal technologies to the International Patent Classification (IPC) system. To this end we suggest a narrowly defined set of IPC classes and a broader one of technologies relevant to CSP, but not exclusively so. We moreover exploit information from three international patent offices, the European, the United States and the Japanese patent office. Innovative activity in narrowly defined CSP technologies has experienced an early boom before 1980 and only recently showed some signs of more activity - a pattern closely resembling the R&D support path. R&D and innovation are concentrated in few high-tech countries - such as the U.S. or Germany. Large CSP potential is not a sufficient condition for innovation, only developed countries such as Australia with both CSP potential and adequate economic and scientific capabilities are found to be among the group of relevant innovators.

This paper contributes with empirical findings to the research on structural inequality and geographic concentration of European inventorship activity at the level of European micro regions. We analyze the spatial structure and dynamics of 43 technology fields (ISI-SPRU-OST concordance) and 6 high-technology fields based on data on EPO patent applications and EPO inventors for the reference period 1977-2004. Based upon OECD RegPAT database (January 2009), we extract EPO patent applications (fractional counting) and inventor IDs (full counting), which are spatially linked to 819 European micro regions (OECD TL3), covering the EU-25, Switzerland and Norway. Besides standard descriptives, we compute Herfindahl-Hirschman indices, location quotients and weighted locational and spatial GINI coefficients. We confirm the hypotheses that (i) the technology fields under analysis differ in their overall size with respect to the stock of EPO patent applications and inventors; (ii) the share of regions with LQ > 1 has decreased compared to the share of regions with at least a single patent application; (iii) the sample of European regions is characterized by highly concentrated and unequally distributed technology fields; (iv) spatial inequality of EPO patenting and inventor location has decreased significantly within the last two decades for most technology fields. In this respect, our quantitative approach clearly depicts dispersion tendencies and decreasing inequality, although structural dynamics differ between technology fields.

In order to investigate the effectiveness of science and technology industrial parks (STIPs), this study examines data on high-tech firms within and outside the STIPs in China, while paying special attention to the issues related to agglomeration and congestion. The main finding is that the negative effect of congestion on productivity is highly likely to outweigh the positive productivity effect of agglomeration economies within the STIPs but not among high-tech firms outside the STIPs. The paper also finds that the productivity of high-tech firms, whether within or outside the STIPs, are positively associated with foreign direct investment and the academic activities of local universities in the same city.

There is increasing evidence that the interaction between shocks and labour market institutions is crucial to understanding the dynamics of employment. In this paper, we show that the inclusion of labour adjustment costs in a trade model affects the impact of exchange rate movements on employment. We also explore how labour market rigidities interact with the degree of exposure to international competition and with the technology level. Our model-based predictions are consistent with estimates obtained using panel data for 23 OECD countries. Namely, our estimates suggest that employment in low-technology sectors that have a very high degree of openness to trade and are located in countries with more flexible labour markets are more sensitive to exchange rate changes. Our model and estimates therefore provide additional evidence on the importance of interacting external shocks and labour market institutions., Fundação para a Ciência e a Tecnologia (FCT), Fundação para a Ciência e a Tecnologia (FCT) - Programa Operacional Ciência e Inovação 2010 (POCI 2010), Fundo Europeu de Desenvolvimento Regional (FEDER)

This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labour productivity; this general result is largely consistent with previous literature in terms of the sign, the significance and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation.

Real exchange rate movements are important drivers of the reallocation of resources between sectors of the economy. Economic theory suggests that the impact of exchange rates should vary with the degree of exposure to international competition and with the technology level. We show that both the degree of openness and the technology level mediate the impact of exchange rate movements on labour market developments. According to our estimations, whereas employment in high-technology sectors seems to be relatively immune to changes in real exchange rates, these appear to have sizable and significant effects on highly open low-technology sectors. The analysis of job flows suggests that the impact of exchange rates on these sectors occurs through employment destruction., Fundação para a Ciência e a Tecnologia (FCT), COMPETE, QREN, FEDER

The aim of this study is to investigate the relationship between a firm's R&D activities and its productivity using a unique micro data panel dataset and looking at sectoral peculiarities which may emerge; more specifically, we used an unbalanced longitudinal database consisting of 532 top European R&D investors over the six-year period 2000-2005. Our main findings can be summarised along the following lines: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.125; this general result is largely consistent with previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient increases monotonically when we move from the low-tech to the medium-high and high-tech sectors, ranging from a minimum of 0.05/0.07 to a maximum of 0.16/0.18. This outcome, in contrast with recently-renewed acceptance of low-tech sectors as a preferred target of R&D investment, suggests that firms in high-tech sectors are still far ahead in terms of the impact on productivity of their R&D investments, at least as regards top European R&D investors.

Starting from the premise that firms are distinct in terms of their capacity to create radical product innovations, the present paper attempts to explore how firms choose between different forms of R&D cooperation and their consequences for social welfare. It studies a duopolistic market, where firms have to choose between R&D competition, a cost sharing alliance, an information sharing alliance or an R&D cartel. The paper demonstrates that asymmetry has an impact on alliance choice and social welfare. With similar firms, the cost sharing alliance will be preferred to R&D competition or any other form of collaboration. With significant asymmetry no alliance may be formed. In terms of social welfare, any alliance is preferable to R&D competition and the R&D cartel is the best. Given this inherent contradiction between private preferences and optimal social choice, the paper provides a rationale for public investment in terms of science and technology parks to promote R&D cartels.

This paper is an empirical test of the hypothesis that the appropriateness of different business strategies is conditional on the firm's distance to the industry frontier. We use data on four 2-digit high-tech manufacturing industries in the US over the period 1972-1999, and apply semi-parametric quantile regressions to investigate the contribution of firm behavior to market value at various points of the conditional distribution of Tobin's q. Among our results, we observe that innovative activity, measured in terms of R&D expenditure or patents, has a strong positive association with market value at the upper quantiles (corresponding to the leader firms) whereas the innovative efforts of laggard firms are valued significantly less. Laggard firms, we suggest, should instead achieve productivity growth through efficient exploitation of existing technologies and imitation of industry leaders. Employment growth in leader firms is encouraged whereas growth of backward firms is not as well received on the stock market.

It is often assumed that recent success in the high-technology software industry will lead India's development. However, evidence suggest that basic manufacturing industry is stagnant. This paper proposes a mechanism that ties these two trends together. A big-push type of model, featuring linkages between firms, demand spill-over, and technology choice is elaborated. By imposing different cost structures on the manufacturing and high-technology industries the model describes outcome in terms of distribution between sectors. It is found that a policy which promotes a high-technology sector can have negative effects on the manufacturing industry as well as aggregate income. Directing resources towards infrastructure, on the other hand, benefits all sectors and increases aggregate income. The results from the model are found to correspond with the recent development pattern in India.

This paper examines the knowhow in strategic business areas that venture capital companies and organizations impart to their portfolio firms in early-stage high-tech enterprises and the mechanisms they use to impart this knowledge. The paper considers three types of investors, independent, private-sector venture capital firms, public-sector venture capital organizations, and business angels, who can be regarded as informal venture capital investors. The study draws on a limited data set to illustrate their activities. The paper draws attention to different theoretical approaches that might explain the observed behaviour. It examines whether the differences are related to the intermediary position of each investor type and subsequent incentives they have in doing their jobs - especially expounded by contract-based approaches - or the competencies in doing their jobs - based on competence-based view of the firms. It turns out that neither approach alone can account for the observed behaviour. It is claimed that the two different types of rationales have interactive relations thus reinforcing the observed patterns of behaviour. Thus an active involvement both ex ante and ex post by the private sector venture capital firms might be the result of both factors at work. Another important finding relates to the role of public sector venture capital organizations as the most passive among the investor types. This leads the paper to suggest a reconsideration of the role of the public sector organisations in venture capital activity.

This paper analyses the effects of innovation networks on product and pro-cess innovation and sales growth of high technology SMEs. Innovation net-works are positively related to both product and process innovation, i.e. know-ledge creation. One exception is the negative effect of innovation networks with suppliers on product innovation. Older SMEs are more product innovative than young SMEs. The positive relation between firm size and (process) inno-vation, disappears when networks are introduced into the analyses. The general conclusion is that vertical innovation networks remove the effect of firm size on process innovation. In other words, high-tech SMEs can ‘borrow’ size if they co-operate with customers, but especially with suppliers for pro-cess innovation. So smallness is not necessarily a disadvantage for inno-vation, as long as firms cooperate with other organisations. Innovation and networks do not seem to effect value creation, measured as sales growth.

Searching for externally available knowledge has been characterised as a vital part of the innovation process. Previous research has, however, almost exclusively focused on hightechnology environments, largely ignoring the substantial low- and medium-technology sectors of modern economies. We argue that low- and high-technology firms differ in their search patterns and that these moderate the relationship between innovation inputs and outputs. Based on a sample of 4,500 firms from 13 European countries we find that search patterns in low-technology industries focus on market knowledge while they are built around differences in technology sourcing activities for high-technology industries.

The issue of technological unemployment receives perennial popular attention. Although there are previous empirical investigations that have focused on the relationship between innovation and employment, the originality of our approach lies in our choice of method. We focus on four 2-digit manufacturing industries that are known for their high patenting activity. We then use Principal Components Analysis to generate a firm- and year-specific 'innovativeness' index by extracting the common variance in a firm's patenting and R&D expenditure histories. To begin with, we explore the heterogeneity of firms by using semi-parametric quantile regression. Whilst some firms may reduce employment levels after innovating, others increase employment. We then move on to a weighted least squares (WLS) analysis, which explicitly takes into account the different job-creating potential of firms of different sizes. As a result, we focus on the effect of innovation on total number of jobs, whereas previous studies have focused on the effect of innovation on firm behavior. Indeed, previous studies have typically taken the firm as the unit of analysis, implicitly weighting each firm equally according to the principle of 'one firm equals one observation'. Our results suggest that firm-level innovative activity leads to employment creation that may have been underestimated in previous studies.

This document presents an indicator-based methodology that attempts to approximate the Lead Market attributes of EU-25 countries for four high-tech industries. A Lead Market is defined as a country where users prefer and demand a specific innovation design that not only appeals to domestic users, but can subsequently be commercialised successfully in other countries as well. A system of five particular country-specific attributes - the so called Lead Market factors - is regarded as critical for the probability of the market becoming a Lead Market. These factors, which influence a country's Lead Market potential, are as follows: price advantage, demand advantage, export advantage, transfer advantage and market structure advantage. The aim of this document is to identify and operationalise indicators to measure and compare the Lead Market properties at international level. The indicators used are taken from the Community Innovation Surveys (CIS-3 and CIS-4), 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.

It is often assumed that recent success in the high-technology software industry will lead India’s development. However, evidence suggests that basic manufacturing industry is stagnant. This paper proposes a mechanism that ties these two trends together. A big-push type of model, featuring linkages between firms, demand spill-over, and technology choice is elaborated. By imposing di¤erent cost structures on the manufacturing and high-technology industries the model describes outcome in terms of distribution between sectors. It is found that a policy promoting a high-technology sector can have negative effects on the manufacturing industry as well as aggregate income. A policy directing resources towards infrastructure benefits all sectors and increases aggregate income. The results from the model are found to correpond with the recent development pattern in India.

Demographic change will be one of the major challenges for economic policy in the developed world in the next decades. In this article, we analyze the relationship between age structure and the number of startups. We argue that an individual's decision to start a business is determined by his or her age and, therefore, that a change in a region's age distribution affects the expected number of startups in the region. Using German regional data, we estimate a count-data model and find that the expected number of startups is positively influenced by the fraction of individuals of working age 20 64 years old. A more detailed analysis of the working-age distribution suggests that startups in knowledge-based (high-tech) manufacturing industries are affected by changes in this distribution whereas firms in other industries are not. In particular, increases in the fraction of individuals in the 20 30 age range and individuals in the 40 50 age range have a positive effect on the number of high-tech startups.

Is the process of workforce aging a burden or a blessing for the firm? Our paper seeks to answer this question by providing evidence on the age-productivity and age-earnings profiles for a sample of plants in three manufacturing industries (“forest”, “industrial machinery” and “electronics”) in Finland. Our main result is that exposure to rapid technological and managerial changes does make a difference for plant productivity, less so for wages. In electronics, the Finnish industry undergoing a major technological and managerial shock in the 1990s, the response of productivity to age-related variables is first sizably positive and then becomes sizably negative as one looks at plants with higher average seniority and experience. This declining part of the curve is not there either for the forest industry or for industrial machinery. It is not there either for wages in electronics. These conclusions survive when a host of other plausible productivity determinants (notably, education and plant vintage) are included in the analysis. We conclude that workforce aging may be a burden for firms in high-tech industries and less so in other industries.

Hardly any other field has received so much public R&D investments globally in such a short time as nanotechnology. Nanotechnology can be considered as an umbrella term for R&D at the nanometer scale (1‐100 nm) where unique phenomena enable novel applications. The interest given to nanotechnology is largely due to its perceived, and partly also over‐hyped, generic nature and potentials to renew industries in a revolutionary way. Nonetheless, the field is still in a fluid and nascent phase without clear indications of how and where commercial breakthroughs will emerge on a larger scale. This paper aims to conceptualize nanotechnology in the literature on the economics of technological change, review the extant empirical research towards this end, and provide a brief overview and new insights into the development of nanotechnology in Finland. It discusses to what degree nanotechnology fits the criteria of a general purpose technology (GPT) and, in this context, highlights some important issues related to technology transfer, industrial dynamics and organisation. The case of Finland is interesting due to recent and relatively significant nanotechnology policy initiatives and the competitive position that it holds in many traditional industries. Although new firms also are emerging, Finnish nanotechnology primarily appears to be driven by scientific developments and the role of large firms is still small. Patenting is picking up from a low level, and process engineering and chemicals are emerging as the main application fields.

Innovations spur science-based trade and industrial development in a fast changing pace of globalization. Knowledge accumulation and diffusion have been increasingly recognised as fundamental factors that play an important role in long-run economic growth. This paper focuses on the long-term innovation strategy of industrial and technological development in developing countries. Growth theory, empirical evidence and several indicators of innovation have been pressed into service to draw important lessons from historical experience of the developed and newly industrializing countries for the industrial development of the developing economies. Technology development and public technology policy experience of the East Asian countries have been examined to reinvent the role of public technology policy that can be adopted to develop national innovation system to nurture and build innovative capabilities in the developing economies in the dynamic global economy. – innovations ; growth ; high-technology ; Asia ; government policy

We study return predictability of stock indexes of blue chip firms and smaller hightechnology firms in Germany, France, and the United Kingdom during the second half of the 1990s. We measure return predictability in terms of first-order autocorrelation coefficients, and find evidence for return predictability of stock indexes of smaller hightechnology firms, but no evidence for return predictability of stock indexes of blue chip firms. Our findings suggest that a leading candidate for explaining the economic sources of return predictability of stock indexes of smaller high-technology firms is transaction costs.

The choice of the appropriate sales mode belongs to the firm's most important strategic decisions after entering into a foreign market. Thus, it is important that the selected foreign sales mode best suits a firm's available resources and capabilities. However, these resources and capabilities change over time. Therefore, it might be necessary for a firm to adjust its foreign sales mode to these changing firm-specific conditions. Using a longitudinal data set of newly founded technology-based firms in Germany and the UK, this paper applies logistic regressions and analyses empirically the probabilities of changing between the two sales modes most frequently used by the sampled exporters: direct exports and exporting via an intermediary. The estimation results confirm the importance of the firm's physical and intangible resources as well as the influence of transaction-specific assets on a sales mode change. However, the effects of the latter factors might be dominated by strategic considerations that are not covered by our data. For example, a young high-tech firm will resort to an intermediary regardless of its resources and transaction-specific assets if this is the only way of coming into contact with foreign customers.

What are the consequences of European economies’ goods structure for their exports as they face Asian competition? Over the last 30 years, the share of East Asian nations in international merchandise trade has been growing noticeably. This rise is often explained by the notion that Asian countries developed a network in which the production of mainly machinery goods has been split up along the production chain over different (Asian) countries and firms. Even though European imports from and exports to Asian countries currently account for only a relatively small fraction of Europe’s total trade, this share is increasing. Thus, the question regarding export perspectives of the European industry facing Asian competition arises. Based on the goods structure of eleven European and five Asian economies as well as the USA using the Standard International Trade Classification at the 1- and 2-digit level, similarities, differences and trends over time are analysed. The additional distinction of the export structure by stage of production (on the basis of the Broad Economic Categories of the United Nations) provides some information with respect to whether an economy is more assembly-based and less research-based or not. Moreover, special attention is given to the share in high-tech goods of the selected countries. Exports of hightech products expand more strongly with spill-over effects on other sectors of an economy. A look at the development of trade balances completes the picture, which of the European economies considered have more favourable export perspectives in the medium term and which ones less so., KOF Working Papers, 104

To facilitate the transformation of the German economy from the traditional manufacturing industries towards emerging new technologies, a new segment of the Frankfurt exchange was introduced in 1997 - Der Neue Markt. This study provides evidence that not only did many new firms obtain funding from the Neuer Markt, but that for the first time in recent history, Germany succeeded in enabling smaller firms to grow faster than larger firms. This suggests that the new policies were not only successful in promoting a new type of firm that otherwise might not exist, but in transforming the sources of growth and innovation within the German economy.

For small high-tech firms international orientation is regarded as crucial for growth and long-term survival. Even newly founded technology based firms (NTBFs) are often internationally active shortly after their inception ("born globals"). However, in order to create jobs and have a sustainable influence on (macro)economic development, continuous growth of NTBFs is needed and research must focus on the continuous role of internationalisation. Based on longitudinal data, this paper examines empirically the long-term internationalisation behaviour of German and British technology-oriented firms founded between 1987 and 1996. Applying logit models, I am able to identify firm-specific success factors that influence the probability of entry into and exit from the international market. The results show, for instance, that firms can overcome high entry costs by acquiring firm-specific assets. Similarly, firm-specific resources prevent high-tech companies from exiting the international market. The strategic role of investment in R&D is stressed in particular by the data.

The paper outlines a static equilibrium model, which analyses the economic development in a two-country case by considering interregional migration in R&D-sectors. The effects of migration and firm decisions on both industrial agglomeration and economic development will be shown: lock-in-effects and free market entry will lead to a concentration of firms. In addition, the consideration of fundamental and secondary research activity leads to a higher number of firms and products by means of cost reduction and spillover effects. The resulting demand of unskilled and skilled labor will be met by sectoral and interregional migration. This reinforces the concentration of economic activity and leads to a higher degree of specialization and economic development. The formation of single equilibria is shown under consideration of exogenous shocks: diminishing transportation cost will turn economies, originally equally endowed and with the same economic structure, to spatial concentration and uneven economic development.

This paper presents evidence that, in Europe, production of high-tech goods is attracted to large markets, while R&D activities tend to be located away from them. In order to explain this phenomenon, we develop a two-country general equilibrium model where firms make separate choices about the location of R&D and high-tech production. There are two agglomeration forces: R&D spillovers and a home-market effect creating incentives for firms to locate production in the relatively large market. We show that, for relatively weak R&D spillovers and intermediate trade costs, the smaller economy tends to specialize in R&D. We also discuss the welfare consequences of different outcomes with respect to the location of R&D, showing that while skilled labor may gain from hosting an agglomeration of R&D activities, unskilled labor will lose.

International engagement is often expected to improve firm performance. Especially for small technology-oriented firms, export activities may be important, being regarded as one way to amortise these firms' high product research and development costs. This paper examines the relationship between international business activities and firm performance using a sample of about 200 young high-tech firms in Germany and the UK that were contacted by two surveys in 1997 and 2003. I find out that the performance enhancing effects of internationalisation that were still observed in 1997 are in fact restricted to an early stage of the firms' life cycles and disappear when technology-oriented firms become mature. The results are in line with many other studies: Firms exhibiting superior performance are or will become exporters.

Labour economists have been increasingly interested in the impact of technological change upon employment and unemployment. However, the predominant focus of empirical studies has been on employment and unemployment stocks, whereas technological change is more likely to affect the flows of labour. This paper focuses on the latter issue. In particular, given the technological change, two major questions posed in this paper are: (i) who moves from low-tech to high-tech jobs and who moves from high-tech to low-tech jobs, and (ii) what are the factors which drive such movements. The data used in this study are from the 1994 Australian Labour Mobility Survey. A new index describing the technological level of a job is constructed and the magnitude and direction of movements along the technological ladder are examined. Using individual-level socio-economic variables, we explain the determinants of the direction of the job change. Some relevant policy implications are also discussed.