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Geography of inventive activity in OECD regions

Geography of inventive activity in OECD regions. Stefano Usai CRENoS, University of Cagliari 8 july 2010 DIMETIC Summer School, Pecs.

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Geography of inventive activity in OECD regions

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  1. Geography of inventive activityin OECD regions Stefano Usai CRENoS, University of Cagliari 8 july 2010 DIMETIC Summer School, Pecs Thanks to a contribution by OECD, Directorate for Science Technology and Industry within the research project on THE IMPACT OF BUSINESS STRUCTURES AND STRATEGIES ON THE DEGREE AND PATTERNS OF INNOVATION AT REGIONAL LEVEL

  2. Technological progress as an engine of growth Geography of innovation in OECD regions

  3. Research line • Technological activity is acknowledged as the main engine of growth and we contribute in investigating on how this engine works at the regional level • First systematic, albeit preliminary, attempt to analyse comparatively the processes of knowledge creation and dissemination across regions (and possibly in the future also sectors) in OECD countries Geography of innovation in OECD regions

  4. TABLE OF CONTENTS • 1 Introduction • 2 Theoretical and empirical background • 3 Some methodological and data issues • 4 Descriptive statistics for patents and citations • Spatial concentration • 5 Econometric estimation • Cross region Knowledge Production Function (KPF) • Across regions Knowledge Gravity Model (KGM) • 6 (Many) Other things to do Geography of innovation in OECD regions

  5. Main Objectives • To estimate a Knowledge Production Function (KPF) at the regional level • (and later at the regional-industry) • To estimate a Knowledge Gravity Model (KGM) at the regional level (also for some sectors) • We assess the importance of local and external factors and among them knowledge spillovers (both pecuniary and technological) in facilitating innovative activity • We also assess the importance of geographical proximity Geography of innovation in OECD regions

  6. The literature behind us/1 • From a theoretical point of view: knowledge and technological progress are engines of economic dynamics in most endogenous growth models (since Romer, 1986). In the spatial context this implies that local growth depends on • the amount of technological activity which is carried out locally (depending on several factors among which internal technological spillovers) • the ability to exploit technological achievements from outside, that is external technological spillovers (through several channels) • In this respect geographical (Glaeser et al, 1992; Henderson, 1997, Paci and Usai, 2000) and technological (Keller, 2000, Verspagen, 2000, Paci and Usai, 2005) proximity have been considered and proved relevant. Geography of innovation in OECD regions

  7. The literature behind us/2 • From an empirical point of view: a useful starting point is the Knowledge Production Function (KPF) originally formalised by Griliches, 1979, and mainly applied at the firm level and refocused by Jaffe, 1989, to study knowledge spillovers from university to firms at the local level • Empirical estimations of general KPF have been carried out for different levels of aggregation: • For the US case: Acs et al, 1994; Audretsch and Feldman, 1996; Carlino et al, 2007; O hUchallain and Leslie, 2007; Soon and Storper, 2007 • For the EU case: Maurseth and Verspagen, 1999; Bottazzi and Peri, 2003; Moreno, Paci and Usai, 2005, 2006a, 2006b, Rodriguez Pose and Crescenzi, 2007 • For the US and the EU together*: Crescenzi, Rodriguez-Pose and Storper, 2007. *with heterogenous datasets Never done for the whole of developed countries with a homogenous dataset Geography of innovation in OECD regions

  8. www.oecd.org/gov/regional/statisticindicators Geography of innovation in OECD regions

  9. OECD Regional Database (ORDB)/1 • The OECD Regional Database provides a unique set of comparable statistics and indicators on about 2000 regions in 30 countries.  It currently encompasses yearly time-series for around 40 indicators of demography, economic accounts, labour market, social and innovation themes in the OECD member countries and other economies. • Regions in OECD member countries have been classified according to two territorial levels (TL) to facilitate international comparability. The higher level (Territorial level 2) consists of macro-regions, while the lower level (Territorial level 3) is composed of micro-regions.   Geography of innovation in OECD regions

  10. OECD Regional Database (ORDB)/2 • In addition, OECD small regions (Territorial level 3) are classified according to their geography into predominantly rural, intermediate or predominantly urban. This typology of regions has been refined to take into account remoteness of rural regions: the extended typology  comprises remote rural regions, rural regions close to a city, intermediate and predominantly urban regions. • The OECD metrodatabase provides statistics on 90 large metropolitan areas in the OECD countries and shows how these regions have changed over the past decade.  Geography of innovation in OECD regions

  11. Geography of innovation in OECD regions

  12. Geography of innovation in OECD regions

  13. Geography of innovation in OECD regions

  14. http://stats.oecd.org/OECDregionalstatistics/ Geography of innovation in OECD regions

  15. Territorial grids by country Geography of innovation in OECD regions

  16. Geography of innovation in OECD regions

  17. the OECD Patent Database fully covers: • Patent applications to the European Patent Office (EPO) (from 1978 onwards); • Patents granted by the US Patent and Trademark Office (USPTO) (from 1976 onwards); • Patents filed under the Patent Co-operation Treaty (PCT), at international phase, that designate the EPO (from 1978 onwards); • Patents that belong to Triadic Patent Families (OECD definition): i.e. sub-set of patents all filed at the EPO, at the Japanese Patent Office (JPO) and granted by the USPTO, protecting the same set of inventions. • EPO and PCT patent counts are based on data received from the EPO (EPO Bibliographic database, patent published until November 2009).  Series on Triadic patent families are mainly derived from EPO's Worldwide Statistical Patent Database (PATSTAT, September 2009). Regional data are based on OECD, REGPAT database, January 2010. Geography of innovation in OECD regions

  18. OECD Regional Database (ORDB)/3 • PCT provide a unified preliminary procedure for filing patent applications to protect inventions in each of its Contracting States. • PCT procedure is costly and a step ahead the national award, it is assumed that most innovations are valuable ones. • Comparing PCT and TPF (triadic patent families): • TPF are less numerous (they share one or more priorities at USPTO, JPTO, EPO) • Both indexes do not suffer from home-bias • The latter provides a stronger profit-based indicator for an international report even though both refer to valuable inventions • PCT permit a wider perspective and its regionalisation is more straightforward Geography of innovation in OECD regions

  19. OECD Regional Database for the KPF • Macro areas: Europe, Asia/Pacific and North America. • Countries: 30 countries • Regional level (tl2 and tl3) • Most of this report and the econometric analysis is based on TL2 • The regions of OECD are 324 (some countries at TL0 included) • Temporal dimension: (1998-2000 and 2002-2004) • Sectoral level: (potentially 44 NACE-ISIC sectors) • Main indicator: • Absolute value of PCT (around 600,000 in total) • PCT per million population Geography of innovation in OECD regions

  20. OECD Regional Database for the KGM • It is difficult to keep track of knowledge flows: one way is through citations, which are provided under request by the OECD STI office • Citations EPO on EPO • We use only data on Europe for 22 countries (EU15 plus Slovak Republic, Poland, Hungary, Czech Republic, Turkey and Norway and Switzerland) • It provides a dynamic picture for the period going from 1990 to 2000 • Most importantly provides disaggregated estimations for some selected sectors, that is Chemicals, Machinery, Traditionals Geography of innovation in OECD regions

  21. Some features of the RDB • PCT provide a measure which is of a sufficiently homogenous quality: potentially highly remunerative innovations. Indicator for both product and process innovations • Medium time span (potentially long): three-year averages to smooth data • Use of the inventor’s residence instead of applicant’s residence. • Specific treatment of multiple inventors • Use of “Schmlook et al.” Technology Concordance (still to be done) • Such a concordance uses the probability distribution of each IPC across industries of manufacture in order to attribute each patent proportionally to the different sectors where the innovation may have originated Geography of innovation in OECD regions

  22. Regions in ourdatabase

  23. Geographical distribution of innovative activity Geography of innovation in OECD regions

  24. OECD: PCT per million Population, 1998-2000 Geography of innovation in OECD regions

  25. OECD: PCT per million Population, 2002-2004 Geography of innovation in OECD regions

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