Abstract
Countries can enhance endogenous innovation using multifaceted incentives for science and technology indicators. We explore country-level innovation using OECD data for research and development (R&D), patents, and exports. We deploy a dual methodology of descriptive visualization and panel regression analysis. Our results highlight industry variances in R&D spending. As a nation develops, governmental expenditure on R&D decreases, and businesses take on an increasing role to fill the gap, increasing local innovation. Our portfolio of local versus foreign resident ownership of patents highlights implications for taxation/innovation policies. Countries with high foreign ownership of patents have low tax revenues due to the lack of associated costs with, and mobility of income from, patents. We call on these countries to devise targeted policies encouraging local patent ownership. Policy makers should also recognize factors influencing high-technology exports for innovation. Lastly, we call on countries to reinstate horizontal and vertical policies, and design national innovation ecosystems that integrate disparate policies in an effort to drive economic growth through innovation.
Highlights
Innovation is a key driver of economic growth and a prime source of competition in the global marketplace (Organization for Economic Cooperation and Development (OECD) 2005); at least 50% of growth is attributable to it (Kayal 2008; Organization for Economic Cooperation and Development (OECD) 2005)
In the context of our research framework, we explore the following research questions using a descriptive visualization and an econometric panel regression approach: How do the science and technology (S&T) indicators (R&D expenditure, patents, and exports) influence countrylevel innovation? How do countries around the world differ in terms of innovation with S&T indicators?
Econometric panel analysis Our panel analysis follows a threefold structure: first, we perform a regression analysis on exports for each industry; we analyze the influence of research and development (R&D) expenditure on patents; and lastly, we explore the international ownership of and investment in patents and the influence on exports
Summary
Innovation is a key driver of economic growth and a prime source of competition in the global marketplace (Organization for Economic Cooperation and Development (OECD) 2005); at least 50% of growth is attributable to it (Kayal 2008; Organization for Economic Cooperation and Development (OECD) 2005). Notable in this regard are the levels of adoption and creation of technological innovation (Grupp and Mogeec 2004; Niosi 2010) and technological learning (Koh and Wong 2005; Organization for Economic Cooperation and Development (OECD) 2005) in creating this expansion. The government plays a key role in supporting these institutions through policies, targeted incentives, R&D collaboration, and coordinated infrastructure
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