Knowledge that Transforms

Innovation strategies in complementary product markets come with a dilemma: Platform sponsors must concede third parties autonomy to innovate to make a platform successful, but a platform sponsor must also participate in the complementary product market to make the platform grow, thus acting as a competitor to third parties. We examine the performance outcomes of four innovation strategies based upon combinations of development and commercialization activities, i.e., the proprietary, outbound, inbound and third-party strategies, and their evolution over time. Data was collected from a panel of 4,857 video games for the seventh generation of video consoles in the United States. The findings contribute to research on platform strategy, open innovation, and ecosystem management by highlighting the different performance outcomes of innovation strategies that co-exist in the same platform ecosystem at the same time. The findings emphasize that decisions on appropriate innovation strategies in platform ecosystems are much more complex than they have previously been portrayed as, through the traditional dualities of open or closed, platform sponsors or third parties, or first or subsequent strategies.

We investigate how different types of environmental policies and new regional environmental knowledge affect new venture creation in and financing of green (low carbon), brown (fossil fuel) and gray (unrelated to natural resources) technologies across 24 OECD countries and 293 regions over the period 2001-13. We find that new regional environmental knowledge positively impacts new venture creation in green technologies, and moderately in gray industries. Gray industries also benefit from enhanced start-up financing in regions where new environmental knowledge is created, confirming that environmental knowledge creation yields positive externalities beyond the green sector. We also find that a more stringent environmental policy regime negatively impacts the creation of new ventures across sectors, but most prominently, it discourages new fossil fuel ventures. However, once entrepreneurs decide to start a new business, stringent environmental policies have on aggregate a positive effect on new venture financing across sectors, particularly through feed-in-tariffs and emission standards.

In this paper we investigate the labour content of complex products. By exploiting O*NET information on the skill and knowledge required by occupations, we find that the product complexity measure suggested by Hausmann and Hidalgo (2009) is highly intensive in STEM knowledge and in Science, Mathematics and Critical Thinking skill requirements. We then propose a new measure of occupational complexity based on these occupational features. Among other advantages, this indicator has the merit to measure complexity for service industries that, so far, has never been measured. In an empirical model of the growth of USA Metropolitan Areas (MSAs), we find that MSAs whose initial industrial structure embeds a higher level of occupational complexity experience higher real per capita GDP growth over the 2001–2017 period. The occupational complexity measure is a stronger predictor of growth than other metrics of industries’ occupational and task content as well as compared to indicators of local occupational and industrial composition. When we separately compute occupational complexity of service and manufacturing industries and delve into their specific role for long run growth, we find a prominent role of the occupation complexity embedded in local services with respect to the one embedded in local manufacturing. Our baseline evidence is corroborated in the context of the NUTS3 regions of France over the period 2010–2017.

We describe the institutionalisation of responsible innovation (RI) over the last decade at the Engineering and Physical Sciences Research Council (EPSRC) and universities funded by it as a focal point for RI in the UK. Drawing on organisational theory we identify factors influencing the dynamics of RI institutionalisation, including forces of legitimation, entrepreneurship and decoupling. We report significant institutionalisation at the EPSRC prior to 2013, when it published its RI policy. Notwithstanding instances of experimentation and assimilation since, we report limited institutionalisation within research communities in universities as RI has encountered competing institutional logics, responsibility norms and epistemic practices. Our findings suggest an ongoing and dynamic process of translation that reflects RI's status as a performative and contested discourse ‘in the making’.

New ventures face both liabilities of newness and smallness, which may inhibit their innovation efforts and output. However, existing research has not clearly distinguished between the two liabilities, leaving it unclear how certain determinants differentially affect innovation performance in start-ups relative to older established small and medium sized enterprises (SMEs). Therefore, in this study we investigate the impact of R&D investments, external knowledge sourcing and public R&D subsidies on innovation effectiveness in new versus older small firms. Employing panel data from the Spanish Community Innovation Survey (CIS), we show that R&D investments have a lower contribution to the innovation performance of new ventures, compared to older small firms. In contrast, we find that external knowledge sourcing makes a higher contribution to the innovation performance of new compared to older small firms, but only in high-tech settings. However, we find no support for a differentiating effect of R&D subsidies in new versus established small firms. Effectively, our results highlight the limited effects of internal R&D investments and R&D policy instruments to promote the growth of innovative start-ups, while highlighting potential benefits of their openness to external sources of innovation. As such, these results have important implications for research, practices and policies that relate to innovation in new ventures and SMEs, while casting doubts on the effectiveness of some of the common strategy and policy instruments to stimulate performance in small innovative start-ups.

We develop natural language processing techniques to identify the creation and impact of new technologies in the population of U.S. patents. We validate the new techniques and their improvement over traditional metrics based on patent classification and citations in two case-control studies. First, we collect patents linked to awards such as the Nobel prize and the National Inventor Hall of Fame. These patents likely cover radically new technologies with a major impact on technological progress and patenting. Second, we identify patents granted by the United States Patent and Trademark Office but simultaneously rejected by both the European and Japanese patent office. Such patents arguably lack novelty or cover small incremental advances over prior art and should have little impact on technological progress. We provide open access to code, data, and new measures for all utility patents granted by the USPTO up to May 2018 (see https://zenodo.org/record/3515985, DOI: 10.5281/zenodo.3515985).

The transformative turn of innovation policy has resulted in calls for a more entrepreneurial and directional role of the state. However, the multiple roles that the state might play remains underexplored. This paper studies the embedded role of the state in four distinct modes of governance of socio-technical systems. Using a three-pillar analytical model, the paper examines four illustrative cases: cryptocurrencies, smart cities, automated vehicles, and nuclear power. The paper identifies 13 different roles of the state: observer, warner, mitigator, opportunist, facilitator, lead-user, enabler of societal engagement, gatekeeper, promoter, moderator, initiator, guarantor and watchdog. The conceptualization of these roles serves to understand that the transformative agency of the state is leveraged/constrained by the modes of governance, and that it is also ultimately exercised through specific mixes of roles.

Two classic perspectives of knowledge generation across space can be distinguished: one that focuses on localized knowledge networks in communities or clusters and another that investigates how innovation is linked to global knowledge networks of multinational enterprises. The former view has been prevalent in economic geography, the latter in international business. By integrating both perspectives, this paper focuses on the processes of how firms extend their knowledge networks from local to global settings. It develops a four-stage model of building cross-border knowledge pipelines, involving site selection, cross-border knowledge facilitation, local embedding, and cross-border knowledge generation. The model emphasizes the significant role of knowledge facilitators in building cross-border knowledge pipelines and is substantiated in a typical case study of Canadian firms in China.

We study how the timing of information disclosure affects the diffusion of codified technical information. On November 29, 2000, the American Inventors Protection Act (AIPA) reduced the default publication time of patents at the United States Patent and Trademark Office (USPTO) to 18 months. We analyze the effects of this change by means of a regression discontinuity design with time as an assignment variable and a complementary difference-in-differences analysis. Our study shows that information flows from patents measured by forward citations, increased. Interestingly, the degree of localization within geographic boundaries remained unchanged and technological localization even increased moderately. Moreover, the effect of early disclosure on citations from patents filed by patent attorney service firms is particularly strong. These results imply that knowledge diffusion stemming from speedier disclosure of technical information is confined to the existing attention scope and absorptive capacity of inventors and organizations.