The return of the Prince of Denmark: a survey on recent developments in the economics of innovation

It is well known that innovation is the engine that drives the growth machine of modern capitalist economies. Therefore, not surprisingly, substantial attention has been devoted by economists to the process behind the production of innovations. Three areas have recently emerged as relevant in the field. These are: the impact of spillovers on productivity; the different forms of R&D cooperation and the role of patents in fostering innovations when these are cumulative. In this paper I summarise the relevant literature in these three areas by discussing where the current literature stands and what are its future developments.

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth, Regional Studies. Endogenous growth theory emerged in the 1990s as ‘new growth theory’ accounting for technical progress in the growth process. This paper examines the role of research and development (R&D) workers underlying the Romer model (1990) and its subsequent modifications, and compares it with a model based on the accumulation of human capital engaged in R&D. Cross-section estimates of the models against productivity growth of European regions in the 1990s suggest that each R&D worker has a unique set of knowledge while his/her contributions are enhanced by knowledge sharing within a region as well as spillovers from other regions in proximity.

Internal versus external R&D:a study of R&D choice with sample selection

This paper extends previous analyses of the choice between internal and external R&D to consider the costs of internal R&D. The Heckman two-stage estimator is used to estimate the determinants of internal R&D unit cost (i.e. cost per product innovation) allowing for sample selection effects. Theory indicates that R&D unit cost will be influenced by scale issues and by the technological opportunities faced by the firm. Transaction costs encountered in research activities are allowed for and, in addition, consideration is given to issues of market structure which influence the choice of R&D mode without affecting the unit cost of internal or external R&D. The model is tested on data from a sample of over 500 UK manufacturing plants which have engaged in product innovation. The key determinants of R&D mode are the scale of plant and R&D input, and market structure conditions. In terms of the R&D cost equation, scale factors are again important and have a non-linear relationship with R&D unit cost. Specificities in physical and human capital also affect unit cost, but have no clear impact on the choice of R&D mode. There is no evidence of technological opportunity affecting either R&D cost or the internal/external decision.

Multifunctional bioactive glass scaffolds coated with layers of poly(d,l-lactide-co-glycolide) and poly(n-isopropylacrylamide-co-acrylic acid) microgels loaded with vancomycin

A new family of multifunctional scaffolds, incorporating selected biopolymer coatings on basic Bioglass® derived foams has been developed. The polymer coatings were investigated as carrier of vancomycin which is a suitable drug to impart antibiotic function to the scaffolds. It has been proved that coating with PLGA (poly(lactic-co-glycolic acid)) with dispersed vancomycin-loaded microgels provides a rapid delivery of drug to give antibacterial effects at the wound site and a further sustained release to aid mid to long-term healing. Furthermore, the microgels also improved the bioactivity of the scaffolds by acting as nucleation sites for the formation of HA crystals in simulated body fluid. © 2013 Elsevier B.V. All rights reserved.

An effective use of 3-D CAD/CAM withing an overall C.I.M. framework

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Estimating the impact of R&D on productivity using the BERD-ARD data

The UK has a relatively low ratio of business R&D to GDP (the BERD ratio) compared to other leading economies. There has also been a small decline in UK’s BERD ratio in the 1990s, whereas other leading economies have experienced small rises. The relatively low BERD ratio cannot be explained solely by sectoral or industry-level differences between the UK and other countries. There is, therefore, considerable interest in understanding the firm-level determinants of investment in R&D. This report was commissioned by the DTI to analyse the link between R&D and productivity for a sample of firms derived from merging the ONS’s Business Research and Development Database (BERD) and the Annual Respondents Database (ARD). The analysis estimates the private rates of returns to R&D, and not the social rates of return, since it is the private returns that should drive firms’ decisions. A key objective of this research is to analyse the productivity of R&D in small and medium sized enterprises (SME). The analysis is intended to allow comparisons to the results in Rogers (2005), which uses publicly available data on R&D in medium to large UK firms in the 1990s.

Eigen-Adaptation and Distributed Representation of 2-D Phase, Energy, Scale and Orientation in Spatial Vision

Distributed representations (DR) of cortical channels are pervasive in models of spatio-temporal vision. A central idea that underpins current innovations of DR stems from the extension of 1-D phase into 2-D images. Neurophysiological evidence, however, provides tenuous support for a quadrature representation in the visual cortex, since even phase visual units are associated with broader orientation tuning than odd phase visual units (J.Neurophys.,88,455–463, 2002). We demonstrate that the application of the steering theorems to a 2-D definition of phase afforded by the Riesz Transform (IEEE Trans. Sig. Proc., 49, 3136–3144), to include a Scale Transform, allows one to smoothly interpolate across 2-D phase and pass from circularly symmetric to orientation tuned visual units, and from more narrowly tuned odd symmetric units to even ones. Steering across 2-D phase and scale can be orthogonalized via a linearizing transformation. Using the tiltafter effect as an example, we argue that effects of visual adaptation can be better explained by via an orthogonal rather than channel specific representation of visual units. This is because of the ability to explicitly account for isotropic and cross-orientation adaptation effect from the orthogonal representation from which both direct and indirect tilt after-effects can be explained.

The determinants of R&D investment: A survey of the empirical research

This paper offers an extensive survey and a critical discussion of the empirical literature on the driving factors of R&D. These factors are subsumed under five broad types. The paper first summarises the key predictions from theory regarding each type's R&D effect. It then examines for which factors differences in the theoretical predictions can also be found in empirical studies, and for which factors the empirical evidence is more unanimous. As the focus is on the empirical literature, methodological issues are also highlighted. The major factor types identified in the literature are, individual firm or industry characteristics, particularly internal finance and sales; competition in product markets; R&D tax credits and subsidies; location and resource related factors, such as spillovers from university research within close geographic proximity, membership of a research joint venture and cooperation with research centres, and the human capital embodied in knowledge workers; and spillovers from foreign R&D. Although on balance there is a consensus regarding the R&D effects of most factors, there is also variation in results. Recent work suggests that accounting for non-linearities is one area of research that may explain and encompass contradictory findings.

Poly (D,L-Lactide) based microspheres for pulmonary delivery of proteins

Initial work focused on the preparation, optimisation and characterisation of poly (D,L-lactide) (PLA) microspheres with the aim of optimising their formulation based on minimizing the particle size into the range suitable for pulmonary delivery to alveoli. In order to produce dry powders and to enhance their long-term physico-chemical stability, microspheres were prepared as a dry powder via freeze-drying. Optimisation studies showed that using appropriate concentrations of polymer 3% (w/v) in organic phase and emulsifier 10% (w/v) in external aqueous phase, the double solvent evaporation method produced high protein loading microspheres (72 ± 0.5%) with an appropriate particle size for pulmonary drug delivery. Combined use of trehalose and leucine as cyroprotectants (6% and 1% respectively, w/v) produced freeze-dried powders with the best aerosolisation profile among those tested. Although the freeze-dried PLA microsphere powders were not particularly respirable in dry powder inhalation, nebulisation of the rehydrated powders using an ultrasonic nebuliser resulted in improved aerosilisation performance compared to the air-jet nebuliser. When tested in vitro using a macrophage cell line, the PLA microspheres system exhibited a low cytotoxicity and the microspheres induced phagocytic activity in macrophages. However, interestingly, the addition of an immunomodulator to the microsphere formulations (4%, w/w of polymer) reduced this phagocytic activity and macrophage activation compared to microspheres formulated using PLA alone. This suggested that the addition of trehalose dibehenate may not enhance the ability of these microspheres to be used as vaccine delivery systems.

Formation and characterization of ultra-sensitive surface plasmon resonance sensor based upon a nano-scale corrugated multi-layered coated D-shaped optical fiber

We present experimental results on the performance of a series of coated, D-shaped optical fiber sensors that display high spectral sensitivities to external refractive index. Sensitivity to the chosen index regime and coupling of the fiber core mode to the surface plasmon resonance (SPR) is enhanced by using specific materials as part of a multi-layered coating. We present strong evidence that this effect is enhanced by post ultraviolet radiation of the lamellar coating that results in the formation of a nano-scale surface relief corrugation structure, which generates an index perturbation within the fiber core that in turn enhances the coupling. We have found reasonable agreement when we modeling the fiber device. It was found that the SPR devices operate in air with high coupling efficiency in excess of 40 dB with spectral sensitivities that outperform a typical long period grating, with one device yielding a wavelength spectral sensitivity of 12000 nm/RIU in the important aqueous index regime. The devices generate SPRs over a very large wavelength range, (visible to 2 mu m) by alternating the polarization state of the illuminating light.

The value of innovation:the interaction of competition, R&D and IP

This paper analyses market valuations of UK companies using a new data set of their R&D and IP activities (1989–2002). In contrast to previous studies, the analysis is conducted at the sectoral-level, where the sectors are based on the technological classification originating from Pavitt [Pavitt, K., 1984. Sectoral patterns of technical change. Research Policy 13, 343–373]. The first main result is that the valuation of R&D varies substantially across these sectors. Another important result is that, on average, firms that receive only UK patents tend to have no significant market premium. In direct contrast, patenting through the European Patent Office does raise market value, as does the registration of trade marks in the UK for most sectors. To explore these variations the paper links competitive conditions with the market valuation of innovation. Using profit persistence as a measure of competitive pressure, we find that the sectors that are the most competitive have the lowest market valuation of R&D. Furthermore, within the most competitive sector (‘science based’ manufacturing), firms with larger market shares (an inverse indicator of competitive pressure) also have higher R&D valuations, as well as some positive return to UK patents. We conclude that this evidence supports Schumpeter by finding higher returns to innovation in less than fully competitive markets and contradicts Arrow [Arrow, K., 1962. Economic welfare and the allocation of resources for invention. In: Nelson, R. (Ed.), The Rate and Direction of Inventive Activity. Princeton University Press, Princeton], who argued that, with the existence of IP rights, competitive market structure provides higher incentives to innovate.

Simultaneous strain and temperature measurement of advanced 3-D braided composite materials using an improved EFPI/FBG system

Simultaneous strain and temperature measurement for advanced 3-D braided composite materials using fibre-optic sensor technology is demonstrated, for the first time. These advanced 3-D braided composites can virtually eliminate the most serious problem of delamination for conventional composites. A tandem in-fibre Bragg-grating (FBG)/extrinsic Fabry-Perot interferometric sensor (EFPI) system with improved accuracy has been used to facilitate simultaneous temperature and strain measurement in this work. The non-symmetric distortion of the optical spectrum of the FBG, due to the combination of the FBG and the EFPI, is observed for the first time. Experimental and theoretical studies indicate that this type of distortion can affect the measurement accuracy seriously and it is mainly caused by the modulation of the periodic output of the EFPI. A simple method has been demonstrated to improve the accuracy for detection of the wavelength-shift of the FBG induced by temperature change. A strain accuracy of ∼ ±20 με and a temperature accuracy of ∼ ±1 °C have been achieved, which can meet the requirements for practical applications of 3-D braided composites. © 2002 Elsevier Science Ltd. All rights reserved.

The influence of diversification and market structure on the R&D intensity of large Australian firms

This article empirically investigates the determinants of R&D intensity for large Australian firms (1994–1997). The results indicate that more focused firms have higher R&D intensities and that lower levels of industry competition are associated with lower R&D intensities.

Public R&D policies and private R&D investment:a survey of the empirical evidence

The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results. © 2014 John Wiley & Sons Ltd.