Publications
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PDF The 2019 EU Survey on Industrial R&D Investment Trends
The 131 EU companies participating in this year's EU Survey expect R&D investments to increase by 4.6% per year in… Show more 2019 and 2020. This is slightly below the 5.4% that was expected last year, but still high in a historic perspective. Companies in the 'Health industries' and 'ICT producers' sectors expect their R&D to increase most. Ninety percent of all participating companies have both environmental and social sustainability policies in place, while the rest plans to do so in the coming 5 years. Due to European Green Deal and climate action priority of the Commission, this year's survey asked participating firms on the sustainability efforts of their companies. Companies that had environmental sustainability policies in place also had social sustainability policies in place (and vice versa). Only two companies indicated to not have either an environmental or social sustainability in place and nor is planning to implement this within the coming five years. Sustainable technologies are considered among the most relevant technologies to remain competitive in the future. Together with Artificial Intelligence (AI) and Big Data, these technologies have been identified as most relevant for future competitiveness. While sustainability technologies are specifically relevant for companies from sectors that have a big impact on the environment (either as provider or supplier of sustainable solutions), AI and Big Data are expected to have a positive impact on competitiveness in a wide range of sectors. Health and Industrials invest the smallest proportion of net sales in environmental sustainability. Companies from the ICT sectors have the highest environmental sustainability intensity. While the average R&D intensity of all participants to the survey is 3.5%, this environmental sustainability intensity is 1.0%. Only less than half of the companies provided an estimation of the company's investments in environmental sustainability indicating that still many companies do not keep track of this information or find it difficult to provide even a rough estimate. This year’s expectations on the impact of Brexit on R&D strategies are much more negative than last year. The proportion of firms expecting no impact decreased from 52% to 37% while the group that expects a relevant impact on their R&D strategies multiplied from 4% to 16%. Especially the firms that responded last year that the impact depended on the negotiations turned more negative, with almost half of them expecting now a relevant impact, clearly indicating of how the situation has evolved over the last year. This information was gathered during the period March-June 2019, during which the insecurities about the implementation of the Brexit process increased significantly. 72% of all R&D is performed within the EU, which is similar to previous editions. This proportion has been stable since many years, still not showing any sign of erosion or offshoring the R&D base to other regions. In fact, the absolute amount of R&D within the EU is foreseen to grow the coming two years by 2.5% per year, from €25 to €26 billion, while the proportion of firms with R&D activities in all four of the main regions (EU, US, Asia and RoW) remains very high. For the first time since the start of the survey, R&D investment growth in China is expected to be single-digit (8.1% compared to 21.3% in the previous survey). The highest R&D increase in percentage points is expected in India (+10.4%, similar to last year). This year, with "only" a foreseen increase of 8.1%, this is the lowest foreseen increase since the start of the survey but still well above the average expected R&D growth. One out of nine companies in this survey performs R&D in only one country – in line with last year's survey. All of these firms perform their R&D exclusively in the country of the headquarters. The headquarters’ country remains an important location to perform for companies with international R&D activities: almost 80% of the firms have their main R&D location in the country of the headquarters and perform a higher proportion of their R&D in this location than firms with their main R&D location outside the company’s HQ (68% vs 42%). The US is the most popular R&D location for the top EU R&D performers that participated in this survey, followed by Germany and China. Almost half of the participants performs R&D activities in the US. For Germany and China, this is around one third of the companies. Within the EU, Germany is followed by the UK, France and Sweden. Show less
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PDF Robotization in Central and Eastern Europe: catching up or dependence
While in the most developed European countries the combination of fallingrobotpricesandhighwagesboostsrobotization,thesedriving factors do not sufficiently explain why we are experiencing… Show more today a sharp increase in deployment of industrial robots in European countries with low wages. Particularly, in Central and Eastern Europe where a decade ago industrial robots were almost nonexistent but today more than 30,000 robots are at work. Hence this paper, by recalculating the data of International Federation of Robotics and EU-KLEMS addresses the main question: What drives and hinders the robotization in Central and Eastern Europe? Show less
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PDF Financial constraints and intangible investments. Do innovative and non-innovative firms differ?
We investigate the extent to which financial constraints hamper the firms’ investment in intangibles. Drawing on the extant literature, we… Show more maintain that a distinction should be kept between innovators and non-innovators. Moreover, we argue that such a distinction should be investigated along the whole spectrum of intangibles firms invest and by addressing the risks of reverse causality and simultaneity bias in the relationship. Through an original quasi-panel extension of a recent European Innobarometer survey, we estimate two sets of recursive bivariate probit models – for innovative and non-innovative firms’ investments – from which interesting results emerge. Financial barriers hamper the investment of both kinds of firms only for R&D, design, and organisation and business processes. With respect to other intangibles, instead, financial barriers act only on innovators (or non-innovators) or are even absent. Furthermore, the hampering role of financial barriers distributes differently across different intangibles between innovators and non-innovators. Show less
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PDF Labor mobility from R&D-intensive multinational companies: Implications for knowledge and technology
Private sector R&D is largely concentrated in a few multinational companies (MNCs), which thus play an important role in the… Show more creation of knowledge and technology in the economy. The mobility of labor between these firms and the rest of the economy is therefore an important mechanism for the diffusion of knowledge. This paper analyses in great detail the flow of labor between firms with specific emphasis on flows to and from R&D intensive MNCs. Using linked employer-employee data for Denmark, we match employees moving from R&D intensive MNCs to other employees switching jobs. We find that employees are more inclined to move between R&D intensive MNCs and their subsidiaries rather than between these firms and other firms in the economy. This is particularly true for high skill employees. Our results suggest that other domestic firms are to a larger extent kept out of the ‘knowledge spillover’ loop, which provide them with fewer opportunities to learn from the R&D intensive MNCs. In other words, R&D intensive MNCs and their subsidiaries form a kind of sub labor market within the national labor market; employees exhibit higher mobility within this group of firms than between this group and the rest of the labor market. Show less
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PDF Industrial innovation for transformation: New science & policy insights
This article introduces the main challenges, the latest scientific evidence and policy issues, and the science and policy areas for… Show more industrial innovation to be further developed, and the role of industrial innovation in sustainability and prosperity in Europe. New innovations and integrated production structures need updated management practices. Territorial and economic disparities and the performance heterogeneity of firms depend on the differences in innovation diffusion and adoption rates. Mixed consequences on the labour force and structural inequalities arise out of advanced digitalisation, while sustainable technologies may have a significant positive impact on employment and industrial composition. Disruptive transformative EU policies should be set up to trigger the exploration of innovation with the highest possible economic, social, and employment returns. These should also be able to attract industrial investment. Show less
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PDF Firm market valuation and intellectual property assets
This paper investigates the relationship between the innovative activity of the top corporate R&D investors worldwide and their market valuation.… Show more The analysis exploits a sample of more than 1,250 publicly listed Multinational Corporations (MNCs) and their intellectual property rights (IPR) – patents and trademarks – filed between 2005 and 2012. The study contributes to the literature on the IPR-market value link by examining the premium resulting from the interactive use of different IPR. Moreover, the empirical setting allows differentiating the effects of an increase in market value derived from additional IPR (within-effects) with respect to the premium received for holding more IPR than the competitors (between-effects). The findings suggest that investors value the simultaneous use of the two IPRs and form their expectations by benchmarking firms. Finally, significant industrial specificities are observed in the individual effects of patents, trademarks and their interactions on the market value of firms. Show less
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PDF Teaming up with Large R&D Investors: Good or Bad for Knowledge Production and Diffusion?
The participation of top R&D players to publicly funded research collaborations is a common yet unexplored phenomenon. If, on the… Show more one hand, including top R&D firms creates opportunities for knowledge spillovers and increases the chance for a project to be funded, on the other hand, the uneven nature of such partnerships and the asymmetry in knowledge appropriation capabilities could hinder the overall performance of such collaborations. In this paper, we study the role of top R&D investors in the performance of publicly funded R&D consortia (in terms of number of patents and publications). Using a unique dataset that matches information on R&D collaborative projects and proposals with data on international top R&D firms, we find that indeed teaming up with leading R&D firms increases the probability to obtain funds. However, the participation of such R&D leaders hinders the innovative performance of the funded projects, both in terms of patents and publications. In light of this evidence, the benefits of mobilizing top R&D players should be carefully leveraged in the evaluation and design of innovation policies aimed at R&D collaboration and technology diffusion. Show less
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PDF Concordance and complementarity in IP instruments
This work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms… Show more of revenues, growth and profitability. By resorting to the virtual universe of Italian manufacturing firms this work provides a rather complete picture of the Intellectual Property (IP) strategies pursued by Italian firms, in terms of patents and trademarks, and we study whether the two instruments for protecting IP exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance exert any effect on performance. Show less
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PDF A geography of corporate knowledge flows across world regions: evidence from patent citations of top R&D-investing firm
This exploratory study looks at the structural and geographical patterns of corporate knowledge flows from a regional perspective. The methodological… Show more approach combines the centrality indicators developed in the social network analysis (SNA) and complementary tools from the graphs theory to assess the betweenness centrality of regions (or poles) their ability to control knowledge flows within a network or to impact its cohesiveness and the relative contribution of individual firms (or layers) to the centrality of regions. The combination of the two approaches brings relevant insights on the way large R&D-driven firms organise their knowledge sourcing and generation across world regions. Show less
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PDF World Corporate Top R&D Investors: Shaping the Future of Technologies and of AI
In modern societies, innovation and new technologies are key to growth and development and to achieving more inclusive economies and… Show more societies. In the past decades, the development and adoption of new technologies across all sectors of the economy has been characterised by unprecedented speed, scale and scope of technological change. Some of these new technologies are so pervasive that they have the potential to affect every part of economies and societies. Artificial Intelligence (AI) is one such general purpose technology that seems set to play a key role in almost every aspect of our lives. While very widespread and deep, ongoing changes are nevertheless difficult to fully understand. The prospect for opportunities seems huge but so do the challenges, and there is the risk that the future may bring undesirable consequences - at least for some parts of society - if technological change is not steered towards enabling inclusive and sustainable outcomes, nor follows internationally agreed ethical principles. AI is a typical example of a technology having the potential to profoundly improve our lives but also to create or widen disparities. Understanding the role of all players involved in and leading technological change, also in the private sector, is key to better understand ongoing and future developments and to steer them in a direction that enhances society. This report brings together data on patents, trademarks and scientific publications of the world’s top corporate R&D investors to shed light on the role of these key players in shaping the future of technologies, and of AI in particular. As for the two previous editions, this work results from the collaborative effort of the Joint Research Centre of the European Commission (EC-JRC) and the Organisation for Economic Co-operation and Development (OECD), two organisations committed to providing solid data and analysis in support of evidence-based policy making. Show less