Generation Of New Technological Knowledge Research Articles

Are ideas getting cheaper? The European evidence

Abstract Recent economics of knowledge studies have highlighted the strong positive effects that the limited exhaustibility of knowledge and its cumulability exert on the recombinant generation of new technological knowledge. While existing empirical investigations primarily focus on the knowledge generation and technology production functions, the analysis of the cost of knowledge has received less attention. This paper aims to fill this gap by investigating the dynamics and determinants of patent costs in the European Union in the period 1992–2012. The analysis of patent unit costs in European countries, measured as the amount of research and development (R&D) expenditure per patent application to the European Patent Office (EPO), shows a steady decline and clear convergence toward lower levels, both in time and across countries. We find that a larger stock of patents and a higher technological variety and coherence of its composition are associated with a sharper reduction in patent costs. Our findings suggest that, in Europe, ideas have been getting cheaper.

Knowledge complexity and the mechanisms of knowledge generation and exploitation: The European evidence

A knowledge complexity trade-off can be identified if and when the complexity of the stock of knowledge engenders positive effects in the recombinant generation of new technological knowledge but negative ones in its exploitation in terms of productivity gains. On the one hand, the complexity of the stock of knowledge increases the scope for recombination and hence the amount of knowledge that each firm is able to generate with a given budget. On the other, the complexity of the stock of knowledge has controversial effects on productivity: the indirect effects -via the larger amount of knowledge generated upstream- are positive but the direct ones can be negative if they generate difficulties in the exploitation of a highly heterogeneous stock of knowledge. The econometric test on the European regions in the years 1997–2009, provides strong empirical evidence about the relevance of the composition of the stock of quasi-public knowledge and its twin positive effects in terms of the direct support of the knowledge generation function and of the indirect one on productivity growth. Moreover, the analysis highlights the negative direct effects on productivity dynamics, though with substantial heterogeneity across different groups of regions.

The knowledge cost function

This paper contributes to the economics of knowledge with an analysis of the knowledge cost function, shedding light on the determinants of the large variance in the cost of knowledge across firms. The amount and the composition of external knowledge and the internal stocks of knowledge that firms can access and use in the generation of new technological knowledge help to reduce the costs of knowledge. The empirical analysis is based on a panel of companies listed on UK and the main continental Europe financial markets for the period 1995–2006, for which information about patents have been gathered. The econometric analysis of the costs of knowledge considers the unit costs of knowledge on the left hand side, and on the right hand side next to R&D expenditures, the stock of knowledge internal and external to each firm, and their size. In order to articulate the different facets of the external knowledge that is made accessible by proximity with firms collocated in the same region (NUTS2), we include variables proxying for regional variety, complementarity and similarity. The results confirm the Marshallian hypothesis that the size and composition of the stock of external knowledge play a key role in reducing the actual cost of the generation of new technological knowledge at the firm level. The evidence also sheds new light on the Schumpeterian hypothesis, suggesting that the size of the stock of internal knowledge helps in reducing the costs of knowledge, while costs of knowledge increase with the size of R&D expenditures and employment.

External and Internal Knowledge in the Knowledge Generation Function

This paper explores the role of internal and external knowledge in the generation of new technological knowledge. It implements the notion of recombinant knowledge generation function with the appreciation of: (i) the complementary—as opposed to supplementary—role of external knowledge and (ii) the role of the size and composition of the internal stock of knowledge. The empirical section is based upon a panel of companies listed on the main European financial markets for the period 1995–2006. The econometric analysis is based on simultaneous equations. The results confirm that R&D efforts and external knowledge are indispensable inputs into the generation of new technological knowledge.

Knowledge Governance

Building on the Schumpeterian and the Marshallian legacies, this article elaborates a model of endogenous growth. It provides a systemic explanation for the levels and the rates of total factor productivity growth. The generation of technological knowledge consists in the recombination of existing bits of heterogeneous technological knowledge that is necessarily possessed by a myriad of agents. As such, much technological knowledge is external to each agent and yet an essential input. In this context, knowledge governance mechanisms play a key role in the identification, recollection, and provision of the specific items of necessary technological knowledge, external to each agent. Effective knowledge governance mechanisms engender pecuniary knowledge externalities that take place, mainly at the regional level, when and where existing units of external knowledge can be identified, accessed, unbundled, and used—again—at costs that are below equilibrium ones for the recombinant generation of new technological knowledge.

Complexity and technological change: knowledge interactions and firm level total factor productivity

The analysis of social interactions as drivers of economic dynamics represents a growing field within the economics of complexity. Social interactions are a specific form of interdependence whereby the changes in the behavior of other agents affect utility functions for households and production functions for producers. In this paper, we apply the general concept of social interactions to the area of the economics of innovation and we articulate the view that knowledge interactions play a central role in the generation of new technological knowledge so that innovation becomes the emergent property of a system, rather than the product of individual actions. In particular, we articulate and test the hypothesis that different layers of knowledge interactions play a crucial role in determining the rate of technological change that each firm is able to introduce. The paper presents an empirical analysis of firm level total factor productivity (TFP) for a sample of 7,020 Italian manufacturing companies observed during the years 1996–2005. This will enable us to identify the distinctive role of regional, inter-industrial and localized intra-industrial knowledge interactions as distinctive and significant determinants, together with internal research and innovation efforts, of changes in firm level TFP.

Innovation as an Emerging System Property: An Agent Based Simulation Model

The paper elaborates the notion of innovation as an emerging property of complex system dynamics and presents an agent-based simulation model (ABM) of an economy where systemic knowledge interactions among heterogeneous agents are crucial for the recombinant generation of new technological knowledge and the introduction of innovations. In this approach the organization of the system plays a crucial role in assessing the chances of individual firms to actually introduce innovations because it qualifies the access to external knowledge, an indispensable input, together with internal learning and research activities, into the recombinant generation of new knowledge. The introduction of innovations is analyzed as the result of systemic knowledge interactions among myopic agents that are credited with an extended procedural rationality that includes forms of creative reaction. The creative reaction of agents may lead to the introduction of productivity enhancing innovations. This takes place only when the structural, organizational and institutional characteristics of the system are such that agents, reacting to out-of-equilibrium conditions, can actually take advantage of external knowledge available within the innovation system into which they are embedded to generate new technological knowledge. The ABM enables one to explore effects of alternative organizational features of the systems, namely different configurations of the intellectual property right regimes and different architectural configurations of the regional structure into which knowledge interactions take place, on the rates of introduction of technological innovations. The results of the ABM suggest that the dissemination of knowledge favors the emergence of creative reactions and hence faster rates of introduction of technological innovations.

Recombinant knowledge and growth: The case of ICTs

The economics of recombinant knowledge is a promising field of investigation. New technological systems emerge when strong cores of complementary knowledge consolidate and feed an array of coherent applications and implementations. However, diminishing returns to recombination eventually emerge, and the rates of growth of technological systems gradually decline. Empirical evidence based on analysis of the co-occurrence of technological classes within two or more patent applications, allows the identification and measurement of the dynamics of knowledge recombination. Our analysis focus on patent applications to the European Patent Office, in the period 1981–2003, and provides empirical evidence on the emergence of the new technological system based upon information and communication technologies (ICTs) and their wide scope of applications as the result of a process of knowledge recombination. The empirical investigation confirms that the recombination process has been more effective in countries characterized by higher levels of coherence and specialization of their knowledge space. Countries better able to master the recombinant generation of new technological knowledge have experienced higher rates of increase of national multifactor productivity growth.

Technological cognition and co-adaptation in mesoeconomic plexuses

In this paper we propose a new approach to technological knowledge based on the concept of mesoeconomic plexus conceived as the fundamental analytical unit of the meso level. We consider this entity as a complex adaptive system, in which technological cognition and innovation are emergent phenomena. In order to substantiate this hypothesis we examine the link between industrial organisation and knowledge generation and diffusion at the meso level, and we look at cognition as an evolutionary process and, more specifically, the generation of new technological knowledge and its intersubjective systemisation through competitive and mutualistic co-adaptation respectively.

The Geography of Invention in High- and Low-Technology Industries: Evidence from the Second Industrial Revolution

Technological progress has long been widely recognized as a crucial source of economic growth. Many countries have, accordingly, devoted considerable resources to promote more rapid generation and diffusion of technology in their economies. Yet recent studies reveal a persistence of stark contrasts across countries and geographic space more generally, not only in productivity, but also in the generation of new technological knowledge. What accounts for these geographic disparities is not well understood.

The Governance of Interactive Learning within Innovation Systems

The generation of new technological knowledge is the result of a variety of interactions : market transactions are only a subset of a much wider flow of knowledge interactions and technological communication. Specific governance mechanisms are necessary to make technological interactions and technological communication possible. Dedicated governance mechanisms emerge under the influence of the types of knowledge, products, markets, organisation of firms and institutions involved. Geographical space plays a key role in such a context.

The influence of different test procedures and microstructures on fatigue crack propagation in aluminium alloys with magnesium and silicon: Detert, K., Ibas, O. and Scheffel, R. Z. Metall. Mar. 1991 82, (3) 225–229 (in German)

This paper contributes to the economics of knowledge with an analysis of the knowledge cost function, shedding light on the determinants of the large variance in the cost of knowledge across firms. The amount and the composition of external knowledge and the internal stocks of knowledge that firms can access and use in the generation of new technological knowledge help to reduce the costs of knowledge. The empirical analysis is based on a panel of companies listed on UK and the main continental Europe financial markets for the period 1995–2006, for which information about patents have been gathered. The econometric analysis of the costs of knowledge considers the unit costs of knowledge on the left hand side, and on the right hand side next to R&D expenditures, the stock of knowledge internal and external to each firm, and their size. In order to articulate the different facets of the external knowledge that is made accessible by proximity with firms collocated in the same region (NUTS2), we include variables proxying for regional variety, complementarity and similarity. The results confirm the Marshallian hypothesis that the size and composition of the stock of external knowledge play a key role in reducing the actual cost of the generation of new technological knowledge at the firm level. The evidence also sheds new light on the Schumpeterian hypothesis, suggesting that the size of the stock of internal knowledge helps in reducing the costs of knowledge, while costs of knowledge increase with the size of R&D expenditures and employment.