Public Funding For Innovation Research Articles

Acesso a financiamento público para inovação: o papel da capacidade de comercialização

As Pequenas e Médias Empresas [PMEs] continuam sendo as que menos possuem acesso ao financiamento público para a inovação. A revisão da literatura identificou a capacidade de comercialização de tecnologia em todas as etapas do desenvolvimento de novos produtos em empresas de Tecnologia da Informação [TI], incluindo na fase de captação de recursos. Esta pesquisa, portanto, visa verificar a prática dessa capacidade na obtenção de financiamentos públicos reembolsáveis. Diante disso, foi realizado um estudo qualitativo baseado em entrevistas com gestores e empreendedores de PMEs do setor de TI que contaram com linhas reembolsáveis de financiamento público, voltadas para a inovação, de um banco de fomento. Os resultados sugerem que as capacidades de comercialização de novas tecnologias estão amparadas no entendimento dos critérios de editais de financiamento, na capacidade da empresa em apresentar ao banco o potencial inovador de seu produto e no impacto socioeconômico e na capacidade de mostrar a solidez de seu produto. o negócio. Esses recursos estão altamente associados à aprovação de crédito da proposta.

Consensus under strain: policy ideas and decline of Finnish public innovation funding in the 2010s

Over the last three decades, the literature on innovation policy and ideas has expanded. Yet the ideas deployed by governments and elected politicians in day-to-day budgetary discourses have mostly escaped research attention. Against this background, this article provides an extensive empirical case study on the policy ideas (policy solutions and related problem definitions) invoked in the Finnish government and parliamentary discourses over budget allocations to the Finnish innovation funding and governance agency in the 2010s. The article argues that the interplay of three policy ideas motivated the Finnish governments and members of parliament to decrease public innovation funding in the 2010s. It is suggested that policymakers’ interpretations of macroeconomic developments, institutions and industrial change shaped the salience and feasibility of these ideas. The Finnish case illustrates that during prolonged economic crises austerity and business subsidies are particularly powerful policy ideas.

The effect of output additionality of public funding support on firm innovation. Evidence from firms of different sizes

AbstractThe article aims to study the effect of output additionality of public innovation funding on firm innovation, measured as economic returns of innovation, across firms of different sizes. A panel sample consisting of 4125 Spanish firms observed during years 2009–2014 has been analysed, using a treatment model. Robustness tests have also been used. The findings show the effects of output additionality of innovation funding support for small, medium and large firms, with a greater effect on large firms and a lower effect on medium firms. However, there has a weak effect for very large firms, which do not benefit in terms of output additionality. Since it is relatively easy for large firms to benefit from public support for innovation, some of the resources allocated to them should be passed on to small and medium firms. Medium firms seem to be less inclined to benefit from economies of scales than large firms and may be less affected by public innovation policy given the priority for small firms' development. Small and medium enterprises can benefit further from well‐designed targeting programmes, with a prevalence of demand‐side support measures compared to the supply‐side measures.

Who benefits from innovation policy? The role of firms’ capabilities in accessing public innovation funding

ABSTRACT The objective of this paper is to study the role of firms’ capabilities in their benefiting from public funds for innovation. The literature agrees that capabilities play a key role in policy access, but this relationship has not been specifically explored. The theoretical framework combines the evolutionary approach to firms’ capabilities with the literature on innovation policy. The empirical strategy is based on the National Employment and Innovation Dynamics Survey, a CIS-type survey at the firm level. This includes data about access to the main Argentine Technological Fund (FONTAR). Results show that productive, innovation, and connectivity capabilities impact the probability of knowing about and accessing FONTAR, especially firms’ productive and connectivity skills. Results also show that innovator firms have higher probabilities of knowing about and accessing FONTAR than non-innovator ones. This provides evidence about the need to think of the public funding of innovation articulated with other firm-level policies.

Public funding effects on inputs and outputs from the innovative process in Chilean firms

ABSTRACT The objective of this study is to identify the effect of public funding instruments on the innovation expenditure intensity, percentage of innovative sales, and the number of intellectual property rights (IPRs) applications performed by Chilean firms using pseudo-panel data. Given the lack of panel data to perform this type of evaluation for a long period, repeated cross-sectional data of the different versions of the Innovation Survey are used to generate a pseudo-panel in which the firms are grouped in cohorts according to the economic sector to which they belong. The results estimated using linear and Tobit models of pseudo-panel with instrumental variables show that the use of public funding for innovation has a positive and significant effect on the innovation expenditure intensity and percentage of innovative sales, but that the effects on the number of IPRs applications performed by firms are not robust to different methods.

Public funding of innovation: Exploring applications and allocations of the European SME Instrument

Financial constraints can severely limit the development of small and medium size enterprises (SMEs) and are very likely to affect innovative firms. In order to lower the barriers to firm growth, in 2014 the European Commission introduced the SME Instrument with the specific aim to support businesses with high-growth potential in need of external finance. By exploiting the availability of information not only on grant awards but also on applications, this is the first study that examines which types of firms apply to the scheme and which ones are selected for the two main rounds of funding. The evidence suggests that the scheme is successful at attracting SMEs with high-growth potential, and that – in line with signalling theory – patenting and prior venture capital funding are strong predictors of awards.

Sustainable Innovation Funding as a Tool for Developing the Economic System

The presented study examines the problems of public and private funding in the innovation domain of the national economic system. Based on the analysis of foreign experience, the authors propose creating federal and regional innovation funds within the Russian economic system driven by publicprivate partnership.Aim. The study aims to substantiate potential directions for the program of public-private funding of the national innovation system.Tasks. The authors examine the existing mechanism of innovation funding from the perspective of development of the national economic system; analyze the foreign experience of public funding of innovation-driven development of the economic system; examine approaches to solving the problem of public innovation funding in Russia; substantiate the implementation of innovation funds based on the principles of public-private partnership into the national economic system.Methods. This study uses the methods of institutional and structural analysis and the systems approach to formulate proposals and substantiate the implementation of innovation funds into the national innovation policy.Results. Based on the analysis of the funding mechanism of the national innovation policy within the national economic system, and considering the experience of the world’s developed innovation-driven economies, the authors substantiate the implementation of innovation funds based on the principles of public-private partnership and aimed primarily at providing financial support for the corporate sector of the national economic system in the field of innovative technologies.Conclusions. With a view to create an efficient funding model for the innovative development of the national economic system in Russia, the study substantiates the need to establish a system of federal and regional innovation funds based on public-private partnership. Their functions would include accumulation of funds and their allocation among individual innovation projects with clearly defined results. The activity of the established federal innovation fund can be differentiated to cover the most important directions and critical technologies, thus improving Russia’s position in the global competition. The purpose of regional funds is to ensure technological development that would enhance the competitiveness of regions at the national level (with allowance for regional specialization and development of mass innovative entrepreneurship). Combined with the use of such market tools as providing financial guarantees on investments in innovation, this will ensure positive dynamics of innovative development of the national economic system as a whole.

Innovation in firms, resilience and the economic downturn: Insights from CIS data in Portugal

AbstractThere is an interest in understanding the effect of economic crises such as the one that hit the financial markets in the late 2000s, on the innovation performance of countries and regions. This paper introduces the concept of “resilience of innovation” to illustrate how the economic slowdown affects firms' behaviour in terms of their ability to maintain and develop innovative activities and deploy product and process innovation. Using Portugal as a case study—an EU member‐state that was heavily affected by the economic downturn—this paper explores the data collected from four waves of the Community Innovation Survey from 2006 to 2012. It presents two‐stage limited dependent variable models to understand the changing impacts of structural factors, innovative activities and strategies in terms of exploration and exploitation of knowledge on the development of product and process innovation. We find knowledge exploration to be particularly important for product innovation, while exploitation is a strong determinant for process innovation. Size, market knowledge sources and public funding for innovation are positively associated with both types of innovation in the peak of the crisis. This reiterates the importance of innovation support efforts to mitigate the effects of economic shocks and boost recovery.

Pubic funding for innovation: The importance of individual resources of the entrepreneur and the relational resources of the firm

The main purpose of our quantitative study is to analyze the importance of individual resources of the entrepreneur and the relational resources of technology-based enterprises on the provision of public funding resources for innovation. The research was carried out in the State of São Paulo, Brazil, and encompasses incubated enterprises housed by technology-based incubators. The outcomes of this study indicate that: (i) there is a positive relationship between the individual resource of the entrepreneur and the provision of public resources for innovation, and (ii) there is a positive relationship between the establishment of partnerships with universities or institutes of science and technology and the provision of public resources for innovation. It is possible to assert that our study contributes positively for the literature on public funding for innovation, considering (i) the identification of the relevance of two variables in the process of selection accomplished by funding agencies; (ii) the focus on incubated technology-based micro and small-sized enterprises; and (iii) the application of theoretical propositions to a developing country.

The public funding of innovation in agri-food businesses

Public administrations have in recent years developed programs of public funding for innovation to boost the competitiveness of business. The study of how companies have used these funding sources generates knowledge to improve the design of support for private innovation and to provide advice for innovative companies. This paper investigates these issues in the agri-food sector which is of particular interest as it is comprised mainly of small and medium enterprises with a wide regional presence and interaction with their local environment. A survey on technological innovation was used to estimate panel logit models with random effects, taking as dependent variables three types of funding: regional, state and European Union. The results generally show a positive relationship between innovation efforts and access to public funding, but also significant differences between types of funding and between sectors. Food companies that obtain public funding tend to have a more innovative profile than Agriculture ones. Both types of firm present higher probabilities than others companies when it comes to gaining access to regional funding, though the opposite often occurs in the case of state funding. Firm size is not significant for regional funding and no overlap was detected between regional and state funding. The financial crisis has adversely affected regional and national aid, which experienced a significant decrease in the period from 2008 to 2013.

Determinants of public funding for innovation in Chilean firms

In this study, different versions of the Innovation Surveys carried out in Chile are used to evaluate the factors that would explain the obtaining of public funding for innovative activities. In order to achieve this, the estimated results from binary election models are contrasted with cross-sectional and pseudo-panel data. It is concluded that with pseudo-panel data it is possible to identify some relevant factors not observed with cross-sectional data, for example those firms that invest in training their workers in R&D activities in the previous year have lower probabilities of obtaining public funding. In addition, the foreign firms have greater probabilities of achieving funding than national firms. The most striking result is that larger firms have greater probability of obtaining public funding, which is contradictory when considering that many public programs declare that they are aimed to support SMEs.

Factors explaining firms’ receipt of public funding for innovation: the case of Chilean small and medium-sized enterprises

This study uses innovation surveys conducted in Chile to evaluate the factors that may explain public financing for innovative activities in small and medium-sized firms (SMEs). The analysis is important because small and medium sized firms are the focus of the existing public programs. The estimated results with binary choice models are contrasted with cross-sectional and pseudo-panel data, observing that firms with some types of expenditures on innovative activities in previous year have more probability to obtain public financing.

Impact of funding sources on innovation: evidence from Brazilian software companies

This paper aims to investigate the impacts of different sources of innovation funding on company performances in the context of an emerging economy. Brazilian software companies are selected as a case for this investigation. Data – related to the types of funding support received and eight types of company performances measured in binary scales – was collected through an online survey from 188 companies located across Brazil. A multivariate probit model was estimated to assess the impacts of different funding schemes on company performances – controlling for other confounding effects. The findings confirmed the critical importance of public innovation funding, and revealed that companies that: (1) Used public funds were more likely to become nationally competitive; (2) Used loans from commercial banks were less likely to become nationally and internationally competitive; (3) Reinvested revenues were more likely to gain market share, and help in increasing the number of employees; (4) Not aware of public funding schemes were less likely to invest on research, development, and innovation. The overall findings suggest the positive impacts of innovation funds on company performance. They can serve as a policy guide to develop targeted performance strategy to determine which funding scheme would be effective to foster what outcomes.

L’innovazione nelle piccole e medie imprese agroalimentari della Regione Campania

Purpose of the paper: The purpose of this paper is to analyse the impact of some drivers - both internal (n. employees, revenue, competences, investment in R&D) and external (collaboration, information sources, public funding) - on the development of innovation activities in small and medium enterprises (SMEs). Methodology: Based on a theoretical framework derived from the literature, it has been conducted an empirical analysis involving 122 agri-food SMEs of the Campania Region that belong to the grain-pasta, olive-oil, dairy and wine supply chains. The data has been elaborated through the cluster analysis technique in order to explore any meaningful patterns that may exist in terms of the innovation capacity. Results: Three clusters with different innovation modes have been identified: Innovative and collaborative (IC); Innovative and non-collaborative (INC); Noninnovative (NI). The analysis reveals that the main discriminating factors of the innovative capacity are the collaboration with different local stakeholders the access to information sources and the ability to obtain public funding for innovation. Research limits: A longitudinal analysis of some best practices of innovative SMEs could offer a better understanding of the relationships between some drivers and the results of the innovation. Other limits is the lack of the analysis of characteristics of the entrepreneur as the main dynamic actors of the business ri-organizational process. Practical implications: The dissemination of “best practices” can promote the adoption of collaborative practices by SMEs of the others two clusters INC and NI, given the fact that these usually innovate by imitation. Originality of the paper: This is the first quantitative study focusing on the innovation capacity of agri-food SMEs in the Campania Region. The study specifically highlights the existence of some innovative SMEs that generally are overlooked by national and European statistical surveys.

Matthew effect, capabilities and innovation policy: the Argentinean case

ABSTRACTThe purpose of this paper is to test the presence of Matthew effects in different types of public funding for innovation – non-refundable grants, subsidized loans and tax credits. According to the literature, Matthew effect refers to the impact of past accessing to public funds on reputation, which increases the probability of accessing in the present. The dataset is made of 966 firms that accessed the Technological Argentinean Fund (FONTAR), main instrument to foster innovation in Argentina, during 2007–2013 – 3300 observations. Results confirm the existence of Matthew effects: past accessing to FONTAR increases the probability of accessing in the present, but only when different instruments are taken altogether. Then, Matthew effect is positively associated with the diversification of access to promotional instruments rather than the repeated access to one type of funding tool. Additionally, results show that firm’s innovation investments, R&D activities, and human resources, explain the increase in probability of accessing, which provides evidence regarding the presence of capability effects. All of this suggests that once the firm enters the system of public funding, it remains with an active innovative behaviour, not just because of reputation effects, but because it has accumulated capabilities in the pursuit of a technological advantage.

The Contribution of Different Public Innovation Funding Programs to SMEss Export Performance

This paper studies the effects of different public innovation funding programs on the innovation output and export performance of small and medium-sized enterprises (SMEs). We evaluate the effectiveness of regional, national and European funding programs implemented in Germany for both product and process innovations. Our panel study shows that public financial support contributes to higher innovation outputs, which in turn translates into higher export success in later years. This relation however only holds for certain sources of public funding and certain types of innovation output. Innovation support from the European Union and national programs for cutting-edge technology that results in higher sales with new-to-market products shows a significant positive effect on SMEs’ export performance. For funding programs run by regional authorities, we find similar though relatively smaller impacts on both innovation output and exporting. Bottom-up funding at the national level-which allows firms to freely define the design of the funded innovation projects in terms of content and cooperation-increases sales with innovations that are only new to the firm, but these innovations have limited impacts on export success. Our results suggest that public innovation programs should challenge SMEs to go for more ambitious innovations in order to strengthen their competitiveness.

Public funding of innovation

Public funding of innovation

Innovation after Brexit

Abstract Brexit is intended to return autonomy for law-making to the UK Parliament, and this opportunity could be used to improve intellectual property laws. These were originally drafted to support innovation, but like other laws of property they were captured by interests. The result is that their original function has been far surpassed in economic importance by their use for moving corporate profits to and through tax havens for tax evasion and avoidance. Although an opportunity to improve information protection laws may indeed result, Britain has never been a leader in drafting these, compared with Germany and the United States. Also, to the extent that better laws could refocus investment on technological innovation, and away from financial innovation, it could be expected that they would be opposed by interests with a major stronghold in the City of London. Reference is made to specific proposals for change already advanced in Prometheus, to which is added a new suggestion about how more generous overhead payments from public funding of innovation could help to stimulate more firms to bid for this. Also, a proposal is made for a means of rectifying a series of legal decisions which have had the effect of denying firms the ability to benefit from new ideas offered by outsiders.

Restrição financeira e financiamento público à inovação no Brasil: uma análise com base em microdados da PINTEC

Resumo: Com a motivação de avaliar os avanços da política de inovação no Brasil, este artigo propõe caracterizar as firmas com obstáculos financeiros para inovar. As características das firmas restritas financeiramente serão comparadas entre os triênios pré e pós-implementação dos principais instrumentos de financiamento à inovação no Brasil. O presente trabalho averigua se as firmas que obtêm financiamento público à inovação sofrem de restrição financeira. É feita uma avaliação do critério de concessão de financiamento público à inovação. Assim, informações das edições de 2005 e 2008 da PINTEC são utilizadas para estimações de modelos log-log complementar e de variáveis instrumentais.

Regional Policies, Key Levers of Regional Innovation Dynamics

Regions tend to become the relevant space for the analysis of public funding of innovation, as emphasised by numerous recent works. However, it is still to be demonstrated that the regional level is really the right spatial scaling for implementing innovation public policies. The aim of this paper is to provide a series of analytical and empirical elements that could help clarify this issue. The paper builds first on a review of the literature dedicated to territorial innovation systems (TIS), showing that beyond their extreme diversity, there are several criteria that provide a basis for a tentative typology of TIS. We then examine how and on which grounds there has been a shift of focus from the notion of National Innovation System (NIS) to that of Regional Innovation System (RIS). The paper also provides a rationale for considering the region as being at the core of TIS, but as part of a multiscalar and dynamic territorial setting. Building on these analytical grounds, the paper turns to an empirical investigation based on the French innovation system case. The specific features of this system and its recent evolution towards more regionalisation display particular patterns of how public policies, and more specifically regional policies, play a nodal role in initiating, supporting and coordinating innovation processes and projects at the regional level. But the leveraging effects of theses policies on territorial innovation dynamics are subject to various contingent conditions related both to the funding mechanisms mobilised and to the timing of the support to innovation projects according to their development stages. We conclude the paper by identifying some crucial pending issues and suggesting directions for further investigation on the role of regional innovation policies in various territorial and sectoral contexts.