From evolution to co-evolution – An empirical study of the role of innovation, policy and public research in industrial dynamics

In the past decades since Schumpeter’s influential writings economists have pursued research to examine the role of innovation in certain industries on firm as well as on industry level. Researchers describe innovations as the main trigger of industry dynamics, while policy makers argue that research and education are directly linked to economic growth and welfare. Thus, research and education are an important objective of public policy. Firms and public research are regarded as the main actors which are relevant for the creation of new knowledge. This knowledge is finally brought to the market through innovations. What is more, policy makers support innovations. Both actors, i.e. policy makers and researchers, agree that innovation plays a central role but researchers still neglect the role that public policy plays in the field of industrial dynamics. Therefore, the main objective of this work is to learn more about the interdependencies of innovation, policy and public research in industrial dynamics. The overarching research question of this dissertation asks whether it is possible to analyze patterns of industry evolution – from evolution to co-evolution – based on empirical studies of the role of innovation, policy and public research in industrial dynamics. This work starts with a hypothesis-based investigation of traditional approaches of industrial dynamics. Namely, the testing of a basic assumption of the core models of industrial dynamics and the analysis of the evolutionary patterns – though with an industry which is driven by public policy as example. Subsequently it moves to a more explorative approach, investigating co-evolutionary processes. The underlying questions of the research include the following: Do large firms have an advantage because of their size which is attributable to cost spreading? Do firms that plan to grow have more innovations? What role does public policy play for the evolutionary patterns of an industry? Are the same evolutionary patterns observable as those described in the ILC theories? And is it possible to observe regional co-evolutionary processes of science, innovation and industry evolution? Based on two different empirical contexts – namely the laser and the photovoltaic industry – this dissertation tries to answer these questions and combines an evolutionary approach with a co-evolutionary approach. The first chapter starts with an introduction of the topic and the fields this dissertation is based on. The second chapter provides a new test of the Cohen and Klepper (1996) model of cost spreading, which explains the relationship between innovation, firm size and R&D, at the example of the photovoltaic industry in Germany. First, it is analyzed whether the cost spreading mechanism serves as an explanation for size advantages in this industry. This is related to the assumption that the incentives to invest in R&D increase with the ex-ante output. Furthermore, it is investigated whether firms that plan to grow will have more innovative activities. The results indicate that cost spreading serves as an explanation for size advantages in this industry and, furthermore, growth plans lead to higher amount of innovative activities. What is more, the role public policy plays for industry evolution is not finally analyzed in the field of industrial dynamics. In the case of Germany, the introduction of demand inducing policy instruments stimulated market and industry growth. While this policy immediately accelerated market volume, the effect on industry evolution is more ambiguous. Thus, chapter three analyzes this relationship by considering a model of industry evolution, where demand-inducing policies will be discussed as a possible trigger of development. The findings suggest that these instruments can take the same effect as a technical advance to foster the growth of an industry and its shakeout. The fourth chapter explores the regional co-evolution of firm population size, private-sector patenting and public research in the empirical context of German laser research and manufacturing over more than 40 years from the emergence of the industry to the mid-2000s. The qualitative as well as quantitative evidence is suggestive of a co-evolutionary process of mutual interdependence rather than a unidirectional effect of public research on private-sector activities. Chapter five concludes with a summary, the contribution of this work as well as the implications and an outlook of further possible research.

Effect of environmental conditions on the N uptake route of soil microorganisms and adaption of a method to determine amino acid oxidase in soil

Soil microorganisms have evolved two possible mechanisms for their uptake of organic N: the direct route and the mobilization-immobilization-turnover (MIT) route. In the direct route, simple organic molecules are taken up via various mechanisms directly into the cell. In the MIT route, the deamination occurs outside the cell and all N is mineralized to NH4+ before assimilation. A better understanding of the mechanisms controlling the different uptake routes of soil microorganisms under different environmental conditions is crucial for understanding mineralization processes of organic material in soil. For the first experiment we incubated soil samples from the long term trial in Bad Lauchstädt with corn residues with different C to N ratios and inorganic N for 21 days at 20 °C. Under the assumption that all added amino acids were taken up or mineralized, the direct uptake route was more important in soil amended with corn residues with a wide C to N ratio. After 21 days of incubation the direct uptake of added amino acids increased in the order addition of corn residue with a: “C to N ratio of 40 & (NH4)2SO4 and no addition (control)” (69% and 68%, respectively) < “C to N ratio of 20” (73%) < “C to N ratio of 40” (95%). In all treatments the proportion of the added amino acids that were mineralized increased with time, indicating that the MIT route became more important over time. To investigate the effects of soil depth on the N uptake route of soil microorganisms (experiment II), soil samples in two soil depths (0-5 cm; 30-40 cm) were incubated with corn residues with different C to N ratios and inorganic N for 21 days at 20 °C and 60% (WHC). The addition of corn residue resulted in a marked increase of protease activity in both depths due to the induction from the added substrate. Addition of corn residue with a wide C to N ratio resulted in a significantly greater part of the direct uptake (97% and 94%) than without the addition of residues (85% and 80%) or addition of residue with a small C to N ratio (90% and 84%) or inorganic N (91% and 79% in the surface soil and subsoil, respectively), suggesting that under conditions of sufficient mineralizable N (C to N ratio of 20) or increased concentrations of NH4+, the enzyme system involved in the direct uptake is slightly repressed. Substrate additions resulted in an initially significantly higher increase of the direct uptake in the surface soil than in the subsoil. As a large proportion of the organic N input into soil is in form of proteinaceous material, the deamination of amino acids is a key reaction of the MIT route. Therefore the enzyme amino acid oxidase contribute to the extracellular N mineralization in soil. The objective of experiment III was to adapt a method to determine amino acid oxidase in soil. The detection via synthetic fluorescent Lucifer Yellow derivatives of the amino acid lysine is possible in soil. However, it was not possible to find the substrate concentration at which the reaction rate is independent of substrate concentration and therefore we were not able to develop a valid soil enzyme assay.