This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg. The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.

Indexing innovation within China

By: D. McHardy Reid, G. Chi, Z. C. Zhao, I. Alon. Competitiveness Review, Vol. 29, No. 4, pp. 416-439, 2019.

Abstract: “Performed over a five-year time horizon, this paper aims to analyze the progression rates of technological innovation across 15 sub-provincial Chinese cities. The authors quantify and rate innovation performance, then rank the cities based on a purpose-built index designed to gauge the rate of technological progress.

Using the inferior constraint method, and a variety of national sources of data, the authors construct an innovation index based in part on new product sales revenue, proportion of college students, research and development expenditure of industrial enterprises in relation to gross industrial output value, contract deals in technical markets per capita, hazard-free treatment rate of waste, enterprises with technical development agencies accounts for industrial enterprises, number of high-tech enterprises and invention patent ownership per million population.

The findings provide a methodology for indexing cities, with 15 Chinese provincial cities as examples. Among the top five cities with the highest technological innovation index were Shenzhen, Nanjing, Guangzhou, Hangzhou and Wuhan. In the bottom were Shenyang, Changchun, Dalian, Xi’an and Harbin.

This study applied a new model of innovation at the city level for China. Application to other industries (real estate, manufacturing, etc.) and countries will extend boundaries of this model and show its wider applicability.

Companies can use this research and methodology when seeking new investments in high tech and innovative products. Locations offering more hospitable environments should be prioritized ceteris paribus.

One weakness of much of the international business and competitiveness literature is that it often views the country as the primary unit of analysis. In this way, nuanced views of the institutional environments within countries are often overlooked. This paper proposes a measure of regional rates of innovativeness across China.” [ABSTRACT FROM AUTHORS]

Understanding national innovation system (NIS) using porter’s diamond model (PDM) of competitiveness in ASEAN 05

By: M. Afzal, R. Lawrey, J. Gope. Competitiveness Review, Vol. 29, No. 4, pp. 336-355, 2019. 

Abstract: “The purpose this study is to investigate national innovation systems (NIS) using Porter’s Diamond model (PDM) by examining the five founding member nations of the Association of South East Asian Nations (ASEAN) namely Indonesia, Malaysia, Philippines, Singapore and Thailand, for the period 2010-2014 (WCY 2015, WDI 2015).

PDM of competitiveness helps us understanding a nation’s competitive position in world trade. In exploring the empirical relationship between NISs and PDM, a non-parametric approach has been applied using the Malmquist Productivity Index (MPI). This study focused on representing the PDM in a simplified manner and endeavored to understand NIS more rigorously through PDM. The study has used several innovation input-output variables to investigate the efficiency and productivity of the countries concerned. The accuracy of the study has been enhanced by the use of MPI.

PDM is found efficacious in the practice and strengthening of NIS in the context of these countries’ competitiveness. This study found unchanged Total Factor Productivity (TFP) for Philippines, Singapore and Thailand; that is technological progress is yet to be obtained. Indonesia lags both in technical and technological progress. On the other hand, Malaysia is found to be over-using the existing input-output factors of NIS.

Many authors have attempted to measure competitiveness and NIS separately in the context of ASEAN or other South-East Asian countries. However, as yet, no empirical investigation has been conducted to assess the competitiveness of a nation by applying NIS-based analysis according to PDM.” [ABSTRACT FROM AUTHORS]

Cluster identification: A joint application of industry concentration analysis and exploratory spatial data analysis (ESDA)

By: R. Belickas Manzini, C. L. Di Serio. Competitiveness Review, Vol. 29, No. 4, pp. 401-415, 2019.

Abstract: “This paper aims to contribute to the approaches based on traditional industry concentration statistics for identifying clusters by complementing them with the techniques of exploratory spatial data analysis (ESDA).

Using a sample with 34,500 observations retrieved from the social information annual report released by Brazil Ministry of Labor and Employment, the methodology was designed to make a comparison between the application of industry concentration statistics and ESDA statistics.

As the results show, the geographic distribution measures proved to be fundamental for longitudinal studies on regional dynamics and industrial agglomerations, and the local indicator of spatial association statistic tends to overcome the limitation of the industry concentration approach.

In the period considered, due to economic, structural and circumstantial questions, activities linked to the transformation industry have been losing ground in the value creation process in Brazil. In this sense, the study of other industries may generate other types of insights that should be considered in the process of regional development.

This paper offers a critical analysis of empirical approaches and methodological advances with an emphasis on the treatment of special effects: spatial dependence, spatial heterogeneity and spatial scale. However, the regional dynamic presents a temporal dimension and a spatial dimension. The role of space has increasingly attracted attention in the analysis of economic changes. This work has identified opportunities for incorporating spatial effects in regional analysis over time.” [ABSTRACT FROM AUTHORS]

Determinants of firm´s propensity to patent its inventions: An evidence from Bengaluru high tech manufacturing cluster

By: D. Chandrashekar, B. Subrahmanya. Competitiveness Review, Vol. 29, No. 4, pp. 375-400, 2019.

Abstract: “The purpose of this paper is to ascertain the factors that influence the decision of a firm in a cluster to patent its inventions.

This study adopts a stratified random sampling technique to choose 101 sample firms from the identified population of firms in a cluster. Further, it uses the primary data collection method to collect data from sample firms through semi-structured questionnaires and in-depth interviews with the top level management of the sample firms. Furthermore, it carries out binary logistic regression analysis to primarily examine the influence of capability and willingness factors of a firm on the propensity of a firm to patent its inventions.

The paper corroborates from the results of the binary logit model that invention capacity has a significant positive impact on a firm’s propensity to obtain patents. In addition, the absorptive capacity of a firm above a certain threshold is likely to have a significant positive influence on the decision of a firm to patent its inventions. On the one hand, between the two motivator factors conventional motivators and strategy related motivators, conventional motivator factor has a significant positive influence on a firm’s propensity to obtain patents. On the other hand, both the de-motivator factors (time, market and cost constraints and procedural issues) have a significant negative influence on a firm’s propensity to patent its inventions.

This paper makes a key contribution to the existing literature by empirically validating the influence of capability of a firm in terms of its invention and absorptive capacities, and willingness of a firm constituting motivator and de-motivator factors, on the decision of a firm to obtain patents, in the context of a firm in a high-tech manufacturing cluster in a developing economy.” [ABSTRACT FROM AUTHORS]

Knowledge bases in German regions: what hinders combinatorial knowledge dynamics and how regional innovation policies may help

By: T. Bennat, R. Sternberg. European Planning Studies, DOI: 10.1080/09654313.2019.1656168, 2019.

Abstract: “Due to the greater involvement of users and the co-creation of ideas with suppliers or other firms, innovation processes are increasingly based upon combinatorial knowledge. Thus, innovation is not restricted to research-and-development-driven, science-based knowledge, but is also the result of experiences and creative thinking. This has consequences for regional innovation policies because each knowledge type differs regarding policy requirements. Contributing to the under-researched topic of the barriers of combinatorial knowledge dynamics in practice, the aim of this paper was to guide government policies in transferring theoretical insights into a contemporary, place-based policy approach. In accordance with the knowledge base approach this paper clearly distinguishes between analytical knowledge, synthetic knowledge and symbolic knowledge. The analysis consists of in-depth interviews, conducted in two case-study regions in Germany. This paper deduces several local factors that have hampered combinatorial knowledge dynamics, and identifies obstacles that can only be overcome at the federal state or national levels.” [ABSTRACT FROM AUTHORS]

What drives the location choice of new manufacturing plants in Germany?

By: A. Krenz. University of Göttingen, Center for European, Governance and Economic Development Research (cege), cege discussion paper No. 378, 2019.

Abstract: “About 30 years after German reunification a persistent gap in different firm performance measures exists between East and West Germany. In this paper I focus on the differences in new German manufacturing plants’ location choices across the German district-free cities and districts and investigate its regional determinants. For that purpose, I construct a novel, rich regional- and firm-level dataset based on the Official Firm Statistics from the German Federal Statistical Office and the Offices of the Laender. The analysis provides first time evidence how in particular the location decision of firms in the German economy is influenced by regional road infrastructure as well as regional structural funding. The effects are economically important and significant. The results reveal that a 10 percent increase in firm agglomeration increases the odds of a new plant to locate in the region by 12 percent. A 10 percent decrease of travel time on roads increases the odds of a plant to locate by 4 percent in overall Germany, by 7.6 percent among East German regions and by 26.5 percent in particular for large plants in the East German regions. A 10 percent larger population increases the odds to locate by 8.7 percent. A 10 percent increase in regional structural funding for infrastructure purposes increases the odds to locate in a region in East Germany by 8.3 percent in particular for large plants. Policy implications emerge that address in particular the improvement of infrastructure and support to reap off benefits that arise from agglomeration externalities.” [ABSTRACT FROM AUTHOR]

Re-centring peripheries along ring roads under a smart growth agenda: case studies OF Espoo Innovation Garden and Vantaa Aviapolis in Finland

By: A. Amr. European Planning Studies, DOI: 10.1080/09654313.2019.1663794, 2019.

Abstract: “The study expands on the recent cluster-oriented smart growth vision in Greater Helsinki, Finland, and examines with two case studies the pertinent locational factor and locality-specific issues. The contemporary regional development tendencies of smart clustering have reframed place-making schemes with an aim of placing large concentrations of business activities on the periphery. The case studies of Espoo Innovation Garden and Vantaa Aviapolis draw on descriptive before-and-after analysis over a defined timeframe. The study addresses the formation and transformation of the spatial structure and its relative and relational qualities on an aggregated scale. It demonstrates the potential, challenges, tools, and strategies of the operating smart growth agenda generating spatial-economic competitiveness and attractiveness factors in these particular projects. The findings explain how the locational factor along ring roads parallel with the land-use management and former model of spatial and economic concentration and centralization are hampering the restructuring of new urban centralities.” [ABSTRACT FROM AUTHOR]

Industry relatedness, FDI liberalization and the indigenous innovation process in China

By: A. Howell. Regional Studies, DOI: 10.1080/00343404.2019.1623871, 2019.

Abstract: “This paper employs a structural innovation model to study the process of indigenous innovation in China and the role of industry relatedness. To better take into account China’s transitioning economy context, it further tests to what extent the relationship between relatedness and firms’ innovation process is influenced by the relaxation of foreign ownership controls, an arguably exogenous shock. Controlling for selection, simultaneity and unobserved heterogeneity, the results show that firm research and development (R&D) boosts innovation output, which in turn enhances firm productivity. Relatedness economies are positively related to each phase of innovation, although the size of the effects depends on the type of firm and the stage of innovation. Foreign direct investment (FDI) liberalization encourages firms to rely more on relatedness economies: (1) to complement R&D spending that is required to adapt foreign technologies to local applications; (2) to recombine knowledge from related industries in order to bring forth new proprietary ideas, processes or concepts; and (3) to help solve process or organizational problems faced in related industries.” [ABSTRACT FROM AUTHOR]

Responsible research and innovation (RRI) in Chile: from a neostructural productivitist imperative to sustainable regional development?

By: J. R. Barton, Á. Román, J. Rehner. European Planning Studies, DOI: 10.1080/09654313.2019.1658719, 2019.

Abstract: “This paper addresses the nature of Chilean investment in science, research and innovation and how this feeds into a broader narrative of productivist versus regional development, with a particular focus on natural resources. The concept of neostructuralism is employed to describe this productivist public sector support for investment in science and policy in relation to socio-economic and environmental research. Against this productivist perspective, a responsible research and innovation (RRI) approach is highlighted which is characterized by contextual, geographical relevance rather than generic solutions: sustainable regional development. Examples are drawn from mining and aquaculture to provide sectoral detail of this productivist logic: the case of mining reveals the focus on generating a cluster while the dimensions of indigenous conflicts and water stress are left to critical social sciences, while aquaculture provides examples of state support for aquaculture promotion with comparatively little investment in impact studies and conflicts. The conclusions point to a strong bias in science and development policy towards product innovation and the protagonism of the private sector allied with science policy support, while sustainable regional development and the role of the decentralized public sector is relegated to a more marginal field of ‘critical’ research.” [ABSTRACT FROM AUTHORS]