The Spatial Diffusion of a Knowledge Base: Laser Technology Research in West Germany, 1960-2005

1. New Technology in the Region—The Role of Proximity and Absorptive Capacity in the Regional Adoption of Laser Research in West Germany, 1960-2005 Michael Fritsch Luis F. Medrano Friedrich Schiller University Jena, Germany The Spatial Diffusion of a Knowledge Base: Laser Technology Research in West Germany, 1960-2005 New Technology in the Region-The Role of Absorptive Capacity

2. General questions Buenstorf, Fritsch & Medrano: Spatial Knowledge and the Emergence of an Industry, Paris 110121 Why are promising new fields of research (and production) adopted in certain regions, not in others? What determines the interregional diffusion of promising new fields of research? What determines the amount of regional research in the new field? Is early adoption an advantage?

3. We analyze the spatial diffusion of laser technology research in West Germany from the beginning of the technology in the year 1960 until the year 2005. • Our focus is on the diffusion of research, i.e. the generation of new knowledge in a technological field, not on applying a given technology. • We conceptualize the research in laser-technology within the “coherent light” paradigm, which constitutes the basis of the laser beam sources industry. Aims and scope New Technology in the Region-The Role of Absorptive Capacity

4. Research questions New Technology in the Region-The Role of Absorptive Capacity • In which locations has laser research in West Germany begun and why? • What was the general spatial diffusion pattern of laser technology research in West Germany? • What are the reasons behind this diffusion pattern? • What factors influence the early adoption of laser technology research? • What determines the amount of laser technology research in a region once the new technological field has been adopted?

5. New Technology in the Region-The Role of Absorptive Capacity What determines the inter-regional diffusion of a technology? • A region’s position in the spatial hierachy (Hägerstrand). • Transfer of information and of tacit knowledge (Mansfield, Stoneman) • Absorptive capacity of regional actors (Cohen & Levinthal). What determines the intra-regional diffusion? • The number of potential face-to-face contacts in the region  size of a region and density. • Transfer of information by mobility of persons between regional organizations • Absorptive capacity of regional actors (Cohen & Levinthal).

6. Hypotheses H1: Laser technology research should be first adopted in large agglomerations. H2: Laser technology research should occur only in regions host to academic research facilities in the fields of physics and engineering. H3: Regions located close to the early centers of laser technology research are more likely to conduct research in this technological field than regions located further away. H4: Regions which started research on laser technology relatively early will have more research in this field in later years than regions which started relatively late. New Technology in the Region-The Role of Absorptive Capacity 6

7. How did laser technology come to Germany? New Technology in the Region-The Role of Absorptive Capacity Laser effect first realized by research teams in the USA at Hughes Aircraft Labs (Maiman group) and Bell Labs (Schawllowgroup)in 1960. Respective papers published in October of the same year. No significant research on laser technology in Germany at that time. Message about the technological breakthrough diffused mainly by publications and presentations/contacts at academic conferences. Kick-off of German laser research: In the late summer of 1960 the Siemens company decided to designate considerable resources to laser research. Replication of the Maiman laser in in the Siemens labs in late 1960. Considerably improved Maiman-type laser working in the Siemens labs in February 1961.

8. How did laser technology come to Germany? (contd.) New Technology in the Region-The Role of Absorptive Capacity • Hermann Hakenfrom the Bell Labs became Chair of Theoretical Physics at the Technical University of Stuttgart in October 1960. • Wolfgang Kaiser from the Schawlow group worked as visiting professor at the Technical University of Stuttgart in 1962 and became Chair of Experimental Physics at the Technical University of Munich in 1964.

9. Reflections about the case of Siemens Absorptive capacity ! New Technology in the Region-The Role of Absorptive Capacity • The strategic decision of Siemens to designate large amounts of resources to laser research was based on. • Rumors about the success of the Maiman and the Schawlow group and – maybe – codified information, i.e. pre-print versions of respective journal articles. • Already existing knowledge in the respective technological field (e.g. Maser research). • The availability of resources (size !) • The ability to bear high risk (size !). • The ability to commercialize laser inventions due to a highly diversified product program (size !) • It was probably based on tacit knowledge existing in the firm, but not on flows of tacit knowledge !!!

10. Example: Early laser research in socialist East Germany New Technology in the Region-The Role of Absorptive Capacity • The first laser in East Germany (replication of the Maiman laser) was realized only in late 1962, two years after the first replication by the West German Siemens company. • No lack of information: Researchers in socialist East Germany had about equal access to information as their West German counterparts. • They had unhindered access to the same publications. • Leading East German researchers attended the same international conferences where laser research was discussed. • Reasons for late adoption and success of laser research in East Germany: • Organizational rigidities of public research under socialist regime. • Lack of adequate personnel and equipment, most particularly a ruby of sufficiently high purity.  Lack of absorptive capacity !

11. Number of patent application in the field of laser technology (IPC H01S) in West Germany, 1960–2005 New Technology in the Region-The Role of Absorptive Capacity

12. Number of laser patents and laser producers in West German regions, 1965 and 1975 1975 1965 New Technology in the Region-The Role of Absorptive Capacity

13. Number of laser patents and laser producers in West German regions, 1985 and 1995 1985 1995 New Technology in the Region-The Role of Absorptive Capacity

14. Number of laser publications and laser producers in German regions, 2005 New Technology in the Region-The Role of Absorptive Capacity

15. Regional concentration of laser patents applications in West Germany, 1960–2005: Gini-coefficients New Technology in the Region-The Role of Absorptive Capacity

16. Econometric Analysis: inter-regional diffusion of laser technology research • The analysis focuses the extent to what regional factors influence the adoption-event of the first laser patent in the region by employing two hazard models: • Complementary log-log model: • Cox proportional hazard model: New Technology in the Region-The Role of Absorptive Capacity

17. Estimations for the time-to-first laser patent, 1961-2005 New Technology in the Region-The Role of Absorptive Capacity

18. Explaining the regional number of laser patents 1961-2005 New Technology in the Region-The Role of Absorptive Capacity

19. Conclusions I • The early stage of the laser technology in West Germany is characterized by a dominant player: the large firm Siemens located in Munich. • Laser technology research tends to be firstly adopted in large agglomerations (H1). • It occurs mainly in regions with university institutions in the fields of physics and engineering (H2). This suggests that the presence of universities with the relevant departments was a precondition for the adoption of the new technology. • Distance has also an effect on the inter-regional diffusion, regions located closer the leading center of laser technology research: Munich, were more likely to adopt laser research (H3). BUT the effect is rather small !! New Technology in the Region-The Role of Absorptive Capacity

20. Conclusions II • Relatively early adoption of laser research in a region has a positive effect on the amount of laser research in later periods, which indicates cumulativeness of the respective knowledge (H4). • Overall conclusion • The adoption of laser technology research in German regions is mainly a story of absorptive capacity! Spatial transfer of knowledge was relatively unimportant; existing tacit knowledge was much more relevant. • Q: Is laser technology a special case? New Technology in the Region-The Role of Absorptive Capacity

21. Thank you for your attention ! New Technology in the Region-The Role of Absorptive Capacity

22. The German laser industry as an example Fritsch: Innovation Activities and Innovation Systems Winter 2009 / 10

23. Econometric Analysis: Independent variables • Universityit: dummy variable denoting the presence of a university with a relevant department in the areas of physics, engineering or both in region i at time t. • Producerit: dummy variable for the location of one or more laser source producer in the region. • Population (ln)it: the log of population in the region is included to control for the size of the region in terms of people (= potential inventors). • Number of publications from adjacent regionsit-1: one year lagged number of the publications from adjacent regions. • Number of patents from adjacent regionsit-1: one year lagged number of the patents from adjacent regions. • Distance to Munich(km)i: the average geographical distance of a region to the Munich region, measured in kilometers. New Technology in the Region-The Role of Absorptive Capacity

24. Econometric Analysis: regional determinants of laser technology research We perform several panel data estimations (negative binomial regression with conditional fixed effects, random effects and zero inflated negbin) Because laser scientific publications and of patent applications are considered as alternative indicators of research output, two main equations are considered: New Technology in the Region-The Role of Absorptive Capacity