Publications
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PDF Assessing Open Strategic Autonomy
The objective of this report is to help increase the EU's open strategic autonomy (OSA) by providing data that help… Show more monitor and take steps to achieve OSA in the innovation and production domains. The report operationalises the concept and provides empirical insights into the current situation. It finds that the EU’s digital sector has obvious vulnerabilities that impair its OSA, most prominently in the areas of artificial intelligence and big data. Other areas of innovation also display some vulnerabilities, but which less obviously impair Europe's OSA, at least on the surface. In addition to pure economic dependencies, the changing geopolitical landscape has increased potential vulnerabilities stemming from international collaboration on innovation. Accordingly, increased attention should be paid to latent risks that might produce non-obvious or indirect innovation and production dependency relations in the future. In this respect, the role of the US is particularly critical, as US technologies and firms play a substantial role in innovation processes in Europe. Show less
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Economic Complexity for Regional Industrial Strategies
Innovation and industrial policies in the EU is often undertaken at regional level. Policymakers that have to design regional industrial… Show more strategy need quantitative tools for guidance. Economic complexity can support policymakers especially during the early phase of policy design: patent and trade data are fed into predictive models to assess the chances of success of a strategy. The methods of economic complexity follow the driving principles of machine learning to predict the probability that a region becomes successful in a given technology or product. We present a series of quantitative tools for regions: (1) relative innovation capabilities; (2) expected diversification by sector; (3) expected diversification by product; (4) fitness of a region for a project. 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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A resilient, competitive and fair EU: Industrial Innovation for Open Strategic Autonomy
This article gives a short EU policy contextualisation of “Industrial innovation for Open Strategic Autonomy – leaving no one and… Show more no place behind’’ followed by a digest of the results of CONCORDi 2023 conference (Oct. 24-26, 2023) on the same subject. It focusses on policy relevance, drawing on new scientific evidence, insights and recommendations highlighting some of the policy challenges ahead. The content of this document – original for its comprehensive and new science-to-policy handling of the topic - reinforces the messages related to Open Strategic Autonomy of recent Communications of the Commission.Main highlights arising from this Brief are: 1) Industrial Innovation as a pillar of industrial policy is central to achieving Open Strategic Autonomy (OSA); 2) In pursuing OSA, social and territorial cohesion should be integrated into industrial innovation policy; 3) Institutional capacities as well as quality and good governance are crucial to OSA; 4) More research and cooperation between practitioners and scientists is needed to underpin and monitor OSA. 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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PDF "Digital and green transitions: handling the economic and social challenges" (2023) Special Issue in Industry and Innovation. Volume 30, 2023 - Issue 7. September 2023
In an era of increasing global challenges, two paradigmatic shifts – the digital and green transitions – have gained traction… Show more due to their potential impacts on industrial ecosystems and societal inequalities. Termed the ‘twin transition’, these shifts underscore the synergies between technological advancements and environmental sustainability. Highlighting its importance in post-COVID-19 recovery, the special issue examines the twin transition’s potential to drive industrial innovation and affect social, economic, and geographical inequalities. The seven articles in this special issue explore the impact of the twin transition on corporate innovation strategies and investment, alongside the economic, social, and geographical implications. Key findings underscore the need for diversified technological investments, especially in AI, and enhanced digital infrastructures. Policy recommendations advocate for aiding firms lagging in digitalisation and developing region-specific innovation policies. The research sets a roadmap for future inquiries into the interplay of digital and green transition, broader economic impacts, and policy-driven strategies. Show less
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Productivity and HGEs: resilience and recovery from the COVID-19 pandemic
The impact of crises on firm performance has been studied widely. This paper explores the relationship between firms’ reaction to… Show more COVID-19 (in employment) and the adoption of digital technologies, taking into account their productivity, digitalisation level and high-growth episodes before the crisis. We match the EIB Group Survey of Investment and Investment Finance with ORBIS database for 27 EU Member States and the United Kingdom. We find that firms with higher productivity levels are less prone to decrease the number of employees in the short and long term due to the pandemic. High-growth enterprises are less likely to expect a reduction in the number of employees in the long term. Moreover, firms in highly digitalised sectors have a lower probability to reduce the number of employees. Finally, our results suggest that COVID-19 leads firms to increase their use of digital technologies, especially those that were already more digitalised. 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
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From rapid decline to high growth: where in the distribution did COVID hit hardest?
Purpose The authors explore how did the COVID shock hit European firms at the upper quantiles (high-growth superstars) and the lower… Show more quantiles (rapidly declining firms). Design/methodology/approach The authors analyze the European Investment Bank Investment Survey (2016–2020). This exploratory paper applies graphical techniques and quantile regression to evaluate the COVID shock along the growth rates distribution. Findings Regarding growth of sales and growth of value added, COVID had a negative effect on growth across the growth rates distribution. The negative COVID effect is larger at the lower quantiles. Employment growth shows no effect for many firms that have zero employment growth, but at the extreme quantiles, the authors can observe that some declining firms were adversely affected by COVID. For labour productivity growth, the COVID effect is small. Analysis of subsamples, and quantile regressions with interaction terms, emphasize that firms receiving policy support were relatively strongly affected by COVID, consistent with interpretations that COVID policy support was reaching the intended recipients. Finally, fully digitalized firms may have been somewhat shielded from the harmful effects of COVID. Originality/value First, previous studies have focused on the average effect of COVID on the growth performance. Our research contributes to understanding how the COVID shock affected the entire growth rates distribution, ranging to high-growth firms and declining firms. Second, governments devoted financial support to firms. Our analysis explores if COVID policy support was given to companies more affected by this shock. Third, previous digitalization may have boosted resilience by shielding firms from COVID’s harmful effects on firm growth. Show less