Publications
-
List item
PDF Where the EU stands vis-à-vis the USA and China? Corporate R&D intensity gap and structural change
Industrial innovation has always been key in the European Union (EU) to achieving competitive sustainability. Its role has become even… Show more more crucial in the context of COVID-19 recovery plans, the implementation of the twin green and digital transition, and the global sustainability agenda.1 Investments in research and development (R&D) by private sector companies drive industrial innovation. An analysis of differences in R&D intensity across world regions and their development over time is therefore of particular relevance. We examine the trends of the EU’s overall corporate R&D intensity relative to competing economies. Our findings reveal that the R&D intensity gap has changed over the last decade, and we explore to what extent the EU economy’s sectoral composition compared with that of its main competitors, the United States and China, has influenced this change. Our analysis covers 10 years (2012–2021) and is based on company data that is freely accessible on the EU Industrial R&D Investment Scoreboard website. Show less
-
List item
Investment expectations by vulnerable European firms in times of COVID
The effect of the COVID shock on European economies has been severe and also unequal, with some firms being affected… Show more much more strongly than others. To improve the effectiveness of policy interventions, policymakers need to understand which types of vulnerable firms have been suddenly pushed into dire circumstances. We seek to fill this important gap in our knowledge by providing evidence from the European Investment Bank Investment Survey 2016–2020 on how the COVID shock has affected the investment activity and investment-related framework conditions of vulnerable firms. While data on actual investment activity post-COVID is not yet available to us, we focus on investment expectations. We exploit the fact that the same questions relating to investment expectations have been asked in several previous survey waves, which enables a difference-in-differences approach to investigate how investment expectations might have suddenly changed, for vulnerable groups of firms, immediately after the onset of the COVID crisis. We focus on 4 groups of vulnerable firms: High-Growth Enterprises (HGEs), young and small firms, R&D investors and non-subsidiary firms. R&D investors are more likely to be pessimistic about investment plans as a consequence of the COVID shock, and (similarly) HGEs are less likely to be optimistic about investment plans. R&D investors are less likely to be optimistic about the availability of internal finance, while HGEs and R&D investors are more likely to be pessimistic about the availability of external finance. Subsidiary firms, interestingly, are more likely to report a decrease in expected investment, which is not necessarily evidence of financial constraints, because it could instead be part of a conservative group-level strategy and coordinated group-level reduction in investment. Event study graphs generally confirm our regression results. Show less
-
List item
PDF Technological relatedness and industrial transformation: Introduction to the Special Issue
This article introduces eleven research articles that connect concepts of technological relatedness and diffusion with the transformation of industrial and… Show more innovation systems. These studies focus on the role of knowledge spillovers, regional variations in innovation and performance, and the evolution of new technologies, such as green and digital technologies. Regional capabilities and ability to diversify are key in accelerating the transformation process of existing industries Taken all together, these studies suggest that industrial transformation hinge on firms capability to absorb domestic or foreign knowledge, regions capabilities, development trajectories, and their ability to network. In particular, regions capacity to diversify and leverage existing related knowledge are key in accelerating the green and digital transformation process of existing industries. Show less
-
List item
PDF Corporate Venturing for R&I: Practitioner’s views and policy questions
Recognising the increasing role that corporate venturing (CV), in general, and corporate venture capital (CVC), in particular, play in company… Show more innovation strategies, the European Commission organised on 23rd May 2022 a workshop with CVC practitioners to better understand the features of and rationales for CVC / CV and the role public policy could play to facilitate its expansion. The workshop confirms the Growing Phenomenon of CV in Europe; an increasing number of recurring CVC investors and growing investments, reaching 14.5b$ in 2019 from 3.6b$ in 2013. Despite this increase, CVC investments in start-ups are still modest with regard to the overall size of the VC market. They are modest also with regard to the corporate’s investment in internal R&D, representing about 2,6% of the sum spent on corporate R&D. In line with the overall venture capital (VC) market, corporate VC is also less mature in the EU than in the USA. The panel discussed options to improve this situation, geared to create an efficient pan-European market for cross-border deals, such as promoting VC networks, improving the visibility of start-ups (particularly outside the country of the headquarters of the mother company) or measures to strengthen linkages between start-ups and corporates at early stages. Show less
-
List item
PDF Top R&D investors recovering fast from the Covid-19 crisis: Preliminary insight to the 2022 EU Industrial R&D Investment Scoreboard
This policy brief presents preliminary insight in the 2022 EU Industrial R&D Investment Scoreboard (the Scoreboard). It is based on… Show more a subsample of companies with available published accounts for the year 2021. The subsample consists of 678 companies representing 66.5% of the global R&D in the previous year’s Scoreboard. It includes 274 companies based in the EU, 198 in US, 112 Chinese companies, 16 Japanese companies and 78 from the rest of the world. Show less
-
List item
PDF The regional green potential of the European innovation system
The brief provides an overview of green technological development across European regions employing the Economic Fitness Complexity approach to establish… Show more a green technology space. The study explores the associations between comparative advantage in specific technological domains and a region’s capacity to develop green technologies, i.e. its Green Fitness. Furthermore, it addresses the interaction between the green and non-green knowledge bases, with a particular focus on whether regional know-how in the non-green technological realm can be exploited in the green domain and vice versa. To this aim, a metric of regional Green Potential is proposed. The analysis suggests that regions specialised in green domains, irrespective of their complexity, have a higher propensity to develop technologies connected with green technologies. Green technologies are linked mostly to technologies related to the production or transformation of materials; with engines and pumps; and with construction methods. The regions with the highest Green Potential are not necessarily those with the highest Green Fitness. The results suggest that there is a potential for green and non-green technological advances to generate positive spillovers in terms of capabilities to produce innovations across the spectrum of technological complexity. Show less
-
List item
High-Growth Enterprises in times of COVID-19: an overview
This paper contributes to a fast-growing literature on the impact of COVID-19 on the business economy, by focusing on how… Show more a particular group of firms - High-Growth Enterprises (HGEs) have been affected by COVID-19 across several dimensions, such as investment expectations, investment priorities, employment decisions, and their post-COVID-19 green and digital transitions. Using the EIB Investment Survey (EIBIS) and relying on descriptive statistics and basic regressions, the results suggest that COVID-19 has had a significant impact on the investment expectations of HGEs, although they continue to invest slightly more than non-HGEs. Preliminary results suggest that HGEs appear to be more optimistic than non-HGEs in a variety of dimensions, such as optimism surrounding the use of digital technologies, and willingness to invest in climate mitigation and adaptation. However, our evidence shows that the HGEs in the 2020 survey wave have still been hit hard by the COVID-19 shock, compared to HGEs in previous years, which suggests that there may be a role for policy for supporting these valuable firms. Show less
-
List item
Economic crisis accelerates urban structural change via inter-sectoral labour mobility
Are recessions drivers of structural change? Here we investigate the resilience of cities, and argue that a re-allocation of labour… Show more between industrial sectors in times of crisis induces an acceleration in structural change. Using UK data, we find that cities experienced a sharp increase in inter-sectoral job transitions, and that local employment in skill-related sectors is most strongly associated with employment growth, during the recession, which we identify with the period of employment contraction between 2008 and 2011. This coincides with a massive but short-lived increase in the rate of structural change (i.e. the total change in employment shares of different industries) around 2009. These findings suggest that cities with skill-related sectors re-allocate workers in a crisis, thus inducing structural change. Show less
-
List item
Investment expectations by vulnerable European firms
The sudden onset of the COVID shock has left European economies reeling, resulting in a sudden contraction of demand that… Show more has hit some vulnerable firms and sectors in a remarkably uneven way. There is a genuine interest from policymakers to learn about which types of firms have been left in vulnerable circumstances as a result of the crisis. In this paper, we present new evidence on the evolution of investment plans of certain groups of firms suspected of being vulnerable -young and small firms, High-Growth Enterprises (HGEs) and R&D investors. We applied a difference-in-differences approach on panel data regarding forward-looking investment expectations. The results show that all the vulnerable groups are pessimistic about the availability of internal and external finance, with HGEs suddenly expecting less of a positive change in investment, and R&D investors expecting a negative change in investment. Show less
-
List item
Top R&D investors, structural change and the R&D growth performance of young and old firms
This paper investigates the structural change of the major economies through the lens of the leading global corporate R&D investors.… Show more Moreover, we explore the relationship between R&D intensity, capital intensity and profitability and R&D investment growth for young and old firms. Contrary to common understanding, our results show that in the EU the R&D distribution between sectors has changed – similar to the USA; however, the USA has experienced a very strong shift towards ICT-related sectors, which makes its change more visible. Both the EU and the USA have experienced a slower pace of structural change than emerging economies. The results also indicate that capital and R&D intensity may have a complementary effect on long-term R&D performance, which can vary according to a firm’s age. The specific nature of the sample allows to link our results to the Schumpeterian waves of innovation and the changes of techno-economic paradigms rather than alternative interpretation of management literature. Policy implications are discussed accordingly. Show less