Publications
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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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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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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
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Which European firms were hardest hit by COVID-19?
The COVID-19 shock hit firms hard, on average. This paper uses graphical techniques and quantile regression to analyse the effect… Show more of the shock across the distribution of firms. The COVID-19 shock had a strong negative effect on aggregate economic performance, with the average firm taking a hit on sales revenues and financial performance. However, the effects varied from firm to firm. Were already-struggling firms hit hardest, threatening their very survival? Or did the COVID-19 shock disproportionately deter tomorrow’s superstars at the upper end of the distribution, thus sacrificing future growth potential? This paper investigates where the COVID-19 shock hit the firm growth distribution, using graphical techniques and quantile regressions to analyse the full distribution of firm growth rates. We investigate how the COVID-19 shock relates to growth outcomes for four dependent variables: growth of sales, value added, employment, and labour productivity. Our results confirm that COVID-19 policy support reached its intended recipients. Show less
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PDF Europe’s Technology Sovereignty and the Role of Knowledge Diffusion in Global Value Chains
The rise of China as the ‘workshop of the world’, combined with experiences with supply shortages during the COVID-19 pandemic,… Show more have led to a re-assessment in recent years of the dependencies of countries on foreign sources of technology. This study seeks to contribute to this discussion by analysing technology dependency in a global value-chain framework. We employ input-output and R&D investment data to assess how dependency on imported R&D inputs has developed over the last decade. Our results indicate that there has been no general trend towards greater technological dependency on foreign R&D. In the last decade, the share of imported R&D in total R&D increased in around half of the countries in the analysis and remained unchanged in the United States and in the EU-27. Both the EU-27 and United States show comparable levels of dependency on foreign sources of technology. At industry level, low-tech sectors revealed the highest rates of dependency on foreign sources of technology. The data also confirm that dependency on China for imported R&D has at least doubled in most countries over the last decade. China, in contrast, was able to reduce its own dependence on foreign sources of technology in the past decade dependency due to fast-growing domestic R&D investments. In addition, regional integration in technology flows between Asian countries is much greater today than it was 10 years ago. Show less
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Industrial Innovation for Open Strategic Autonomy - leaving no one and no place behind
This working paper sets the scene and provides background information on 'Industrial Innovation for Open Strategic Autonomy”, the main focus… Show more of the 9th edition of the European Conference on Corporate R&D and Innovation (CONCORDi 2023), as well as introduces scientific contributions that will be presented at the conference. It thus aims to stimulate fruitful discussion between academia, experts and policy-makers at the conference, identifying potential policy initiatives and areas where additional research and evidence are needed. Show less
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Regional incidence and persistence of high-growth firms: Testing ideas from the Entrepreneurial Ecosystems literature
Policy-makers and scholars often assume that a higher incidence of high-growth firms (HGFs) is synonymous with vibrant regional economic dynamics… Show more and that HGF shares are persistent over time as Entrepreneurial Ecosystems (EEs) have slowly-changing features. In this paper, we test these hypotheses deeply rooted in the EE literature. We draw upon Eurostat data for up to 20 countries over the period 2008-2020 and study HGF shares in NUTS-3 regions in Europe. Analysis of regional rankings yields the puzzling finding that the leading EEs in Europe, apparently, are in places such as southern Spain and southern Italy. These places would not usually be considered Europe’s foremost entrepreneurial hotspots. Additional results do not provide strong support for the hypothesis that more developed regions feature higher HGF shares. We do find evidence consistent with HGF shares displaying persistency over time. However, we show that more developed regions do not have higher persistence in their HGF shares and that the strength in persistence does not increase across the HGFs distribution, which does not support path dependency as the main mechanism behind the observed persistence. Overall, we call for a more nuanced interpretation of both regional HGF shares and the EEs literature. Show less
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PDF Walking the Green Line: Government Sponsored R&D and Clean Technologies
The study analyses whether government sponsored R&D induces the development of clean technologies with a high impact on subsequent technological… Show more development. The analysis uses information on USPTO patents granted between 2005 and 2015 and combines different methods to control for possible sorting of projects into public funding and for non-random (public) treatment. We also assess the distributional effect of government sponsored R&D. Results show that patents from public funded projects have a significantly higher impact and that this is particularly true for highly cited patents, thus supporting a role for technology-push policies in determining a clean technological transition. Show less