Publications
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The effects of intangibles on productivity and resilience during the green transition
Intangible capital is a key driver of productivity growth, competitiveness and resilience. Unlike tangible investment such as machinery and equipment,… Show more investment in intangible assets, especially R&D, shows low sensitivity to adverse demand shocks. R&D intensive firms seem to be more resilient (higher employment) during crises and recover faster (higher productivity) afterwards. Productivity growth can contribute to decarbonisation, but in many instances productivity growth and decarbonisation lead to conflicting objectives, which needs to be addressed through policy action. Show less
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The exposure of EU inventive efforts to critical raw materials: evidence from an AI based patent indicator
Reducing uncertainty around critical raw materials (CRM) supply is a policy priority for the EU in view of their role… Show more for advanced carbon neutral and digital technologies. A new, AI based indicator is introduced to measure the exposure of inventive activities to critical raw materials, outperforming existing approaches by identifying CRM relevance even when not immediately evident. High exposure sectors, such as aerospace & defence and ICT services, intensify inventive efforts in response to CRM supply risk, indicating strategic shifts towards substitution and diversification. European regions differ significantly in CRM exposure: some areas (e.g. parts of France, Germany, Italy, and Scandinavia) show con-siderable hidden CRM based inventive activity. Firms in CRM exposed sectors adapt by both increasing their inventive efforts and seeking alternative inventive routes, suggesting that innovation can mitigate supply risk vulnerabilities. Show less
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R&D productivity: are ideas harder to find or does Europe suffer from a commercialisation gap?
It has been a long-standing debate whether Europe suffers from an innovation gap. Recent studies indicate a global decline in… Show more research and development (R&D) productivity across various sectors, raising concerns about the efficiency of innovation investments. New panel data from the EU Industrial R&D Investment Scoreboard allow examining long-term relationships between firm productivity and R&D. The results show that EU top R&D investors struggle more than their global counterparts to convert their R&D into new ideas and marketable products. Show less
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Financing EU Health Innovation: the role of Venture Capital
The EU is challenged by a persistent leadership gap in the global health innovation landscape, with the US leading in… Show more corporate health innovation and venture capital (VC) funding. The EU health innovation landscape is more concentrated in older "incumbent leading firms," while the US has a more dynamic landscape with higher R&D growth rates. Financing constraints are highly relevant in the health sector, particularly for startups and scale-ups with risky breakthrough ideas and technologies. The EU-US gap in dynamic innovative performance in health may be partly due to differences in access to risk finance, particularly venture capital. This paper analyzes trends in VC financing for health-related innovations in Europe compared to the US, using data from Dealroom. The results show that the weakness of the European health VC market continues to hold in the early and late stages, where less progress seems to have been made. Some of the main findings include the following: the EU is lagging behind the US in the number of health VC deals, with a larger gap in late-stage deals; European deal sizes are below the US, with a larger gap in late-stage deals, the EU has a lower occurrence of co-investment deals, which does not help reduce the gap in health VC deals. Overall, the European health VC market is particularly missing larger-sized investors (investment funds) with late-stage deals. To address this gap, policy attention is needed to identify and reduce barriers for European health VC investors to grow to a critical scale and engage in a higher number and larger-sized deals. All in all, Europe should further develop and strengthen its strongest asset, i.e., its Open Single Market, reducing the fragmentation in flows of venture capital, reaching a truly single European Venture Capital market. For an EU open strategic autonomy industrial policy for health, an open single market for health remains the critical instrument to further develop and monitor. Show less
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Handbook of Economic Complexity for Policy
This handbook collects JRC’s six years of experience on economic complexity for policy. It is a tool for practitioners who… Show more aim at understanding the methods of complexity from data collection to policy recommendations. After introducing the reader to this innovative unconventional approach, the volume articulates methods and analysis in three parts. First: data. Chapters 2, 3, and 4 describe the datasets that are most commonly used for economic complexity analysis, with a deep dive in trade, patents, and scientific publications, which have played a greater role in JRC’s research. Second: methods. This second part shows how to use the available data for analysis. Most notably, it describes in great detail how to compute fitness and complexity indices, as well as relatedness metrics. Third: policy. The final part of this handbook collects policy work - mainly from the JRC - to show how the methods can be put into practice. Show less
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The impact of the EU Industrial R&D Investment Scoreboard in Science and Policy
Understanding the flow of knowledge between scientific research and policymaking is increasingly important. This study examines the influence of the… Show more EU Industrial R&D Investment Scoreboard, which has been active at the science-policy interface since 2004. We analyse citation trends in scientific publications and policy documents to assess the Scoreboard’s usage, impact, and reach. Our findings indicate that the Scoreboard is cited more frequently in policy documents, though academic interest is growing. Policy documents cite the Scoreboard more quickly, reflecting its immediate relevance for policy actors, while scientific publications take longer to cite it and utilise its data. Papers citing the Scoreboard tend to have a higher citation impact than average, underscoring its significance in a broad set of research fields. In our citation content analysis, we find that "insight" citations are more common than "data" citations. However, papers combining patent data and Scoreboard tend to receive more citations, highlighting the value of integrating R&D data with other relevant variables to better understand the innovation process. Additionally, we show that the Scoreboard has influenced EU policy discourse to address the need for structural changes towards high R&D intensity sectors, and showing EU’s strengths in green innovation. Show less
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PDF Corporate Venture Capital in the Automotive Sector
The ongoing transformation of the automotive sector is in part driven by factors such as the unrelenting onslaught of electric/hybrid… Show more powertrain technologies, in-vehicle and networked software applications, rising demand for electric vehicles, and the emergence of new entrants like Tesla and others notably in China. The response of automotive firms to these challenges includes, inter alia, Open Innovation (OI) tools and strategies of which Corporate Venture Capital (CVC) is one element. CVC investments by large automotive companies are globally spread, but there is a clear concentration of these investments in the US, particularly in California. The vast majority of CVC investments in startups are made in conjunction with other co-investors, reflecting the high-risk nature of the innovative technologies being developed. Newcomers to the automotive industry, such as Tesla and BYD, are primarily beneficiaries of venture capital financing, including corporate VC, rather than themselves engaging in venture financing. Despite a drop in CVC in 2023, the rising trend in automotive CVC may return over the medium to long term, driven by increasing startup activity in automotive-relevant areas. Show less
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Innovation dynamics in the automotive industry
This brief provides JRC firm-level microdata-based analyses of innovation dynamics in the global automotive industry comparing EU firms to their… Show more global competitors. It takes the sector's top global players from the 2023 EU Industrial R&D Investment Scoreboard as a starting point, analyses clusters of R&D intensity, examines past financial performance and analyses participation in start-ups via corporate venturing. Show less
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Economic complexity and the sustainability transition: A review of data, methods, and literature
Economic Complexity (EC) methods have gained increasing popularity across fields and disciplines. In particular, the EC toolbox has proved particularly promising… Show more in the study of complex and interrelated phenomena, such as the transition towards a greener economy. Using the EC approach, scholars have been investigating the relationship between EC and sustainability, proposing to identify the distinguishing characteristics of green products and to assess the readiness of productive and technological structures for the sustainability transition. This article proposes to review and summarize the data, methods, and empirical literature that are relevant to the study of the sustainability transition from an EC perspective. We review three distinct but connected blocks of literature on EC and environmental sustainability. First, we survey the evidence linking measures of EC to indicators related to environmental sustainability. Second, we review articles that strive to assess the green competitiveness of productive systems. Third, we examine evidence on green technological development and its connection to non-green knowledge bases. Finally, we summarize the findings for each block and identify avenues for further research in this recent and growing body of empirical literature. Show less
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Covid-19 and the resilience of European firms
Using EIBIS data, this paper shows how firms with higher productivity, before the pandemic, were less likely to cut employment… Show more during the crisis, while the adoption of digital technologies was led by firms that were already relatively advanced digital users. Past research suggests that economic crisis lead to a reallocation of resources from less productive to more productive firms, with many firms taking action to boost their own productivity. This paper uses data from the EIB Investment Survey and the ORBIS database to analyse how the COVID-19 crisis affected the level of employment and digitalisation efforts of European firms. Moreover, it examines how these changes relate to the pre-crisis performance of firms, in terms of productivity, digitalisation and growth. It finds that firms were less likely to reduce their number of employees, both in the short and in the long term, if they exhibited higher productivity or higher growth, or were in highly digitalised sectors. It also finds that firms were more likely to increase their use of digital technologies during the crisis if they were already relatively advanced users of digital technologies. Show less