Birgit Aschhoff

Innovation on demand--Can public procurement drive market success of innovations?

Public procurement has been at the centre of recent discussions on innovation policy on both European and national levels (e.g., Aho-Report, Barcelona Strategy). It has a large potential to stimulate innovation since it accounts for 16% of combined EU-15 GDP. We embed public procurement for innovation into the broader framework of public policies to stimulate innovation: regulations, R&D subsidies and knowledge infrastructure (i.e. basic research at universities). We synthesize the characteristics of all four instruments based on existing literature and quantitatively compare their effects on innovation success. Our empirical investigation rests upon a survey of more than 1,100 innovative firms in Germany. Our survey puts us in the position to trace all sources of valuable innovation impulses, namely public customers, law and regulations, universities and public funding for R&D. We relate these sources back to innovation success. We find that (non-defense related) public procurement and knowledge spillovers from universities propel innovation success equally. In a second step, we explore whether these effects vary across firms (e.g. size, location, industry). The benefits of university knowledge apply uniformly to all firms. However, public procurement is especially effective for smaller firms in regions under economic stress as well as in distributive and technological services. Based on these findings targeted policy recommendations can be developed.

Empirical Evidence on the Success of R&D Cooperation—Happy Together?

In this paper we analyse the effect of past R&D cooperation on current firms’ innovation performance. Success measures are: sales of innovative products, distinguishing between products new to the firm and new to the market, and cost reductions due to innovative processes. Particular attention is paid to the impact of different cooperation partners. The analysis rests on firm-level data of the annual German innovation survey. We find that R&D cooperation with competitors leads to greater cost reductions that are attributable to innovative processes. R&D cooperation with research institutes has a positive influence on a firm’s economic success with market novelties.

Who Gets the Money? The Dynamics of R&D Project Subsidies in Germany

The question of the allocation of public R&D funding is becoming particularly important when it comes to identifying the effects of state subsidies, in terms of input or output additionality. This analysis goes one important step further than the existing literature by including the time dimension. Using firm-level data on German manufacturing and knowledge-intensive service firms, this paper sheds light on the structure of the subsidy recipients over time. It turns out that participation in the funding scheme is quite stable. This is also confirmed by applying a multivariate approach. Firms having received funding in the past are more likely to be selected for public funding again. It is also important to control for the overall supply of subsidies. Besides, a firms size and knowledge capabilities increase the probability of entering the scheme.

The effect of subsidies on R&D investment and success: do subsidy history and size matter?

This study provides insights into the effects of public R&D grants on R&D input and output of firms from Germany. Previous research has shown that the allocation of R&D project grants is rather stable regarding the pool of beneficiaries. The question is whether this participation pattern can be justified by its realized effects. In addition, the impact of the grant size on the effects is investigated. Therefore, I allow to a certain extent for heterogeneous treatment effects in these two dimensions. Using a sample of about 8,500 observations, a non-parametric matching approach with multiple treatments is applied to estimate the effects of public R&D grants on firms R&D input. The results show that particularly frequently given grants as well as medium and large grants are suitable to increase the scope of firm-financed R&D plans. For the analysis of the effects on firms R&D output the R&D expenditures are disentangled in R&D which would have been spent in the absence of the grant and publicly induced R&D, including the grant and the effect on private R&D expenditures. Basically both types of R&D are equally productive in terms of innovative output. For the statement that a rather stable pattern of program participation leads to a lower effectiveness of the instrument no evidence has been found.

Successful Patterns of Scientific Knowledge Sourcing - Mix and Match

Valuable knowledge emerges increasingly outside of firm boundaries, in particular in public research institutions and universities. The question is how firms organize their interactions with universities effectively to acquire knowledge and apply it successfully. Literature has so far largely ignored that firms may combine different types of interactions with universities for optimizing their collaboration strategies. We argue conceptually that firms need diverse (broad) and highly developed (deep) combinations of various interactions with universities to maximize returns from these collaborations. Our empirical investigation rests upon a survey of more than 800 firms in Germany. We find that both the diversity and intensity of collaborative engagements with universities propel innovation success. However, broadening the spectrum of interactions is more beneficial with regard to innovation success. Applying latent class cluster analysis we identify four distinct patterns of interaction. Our findings show that formal forms of interaction (joint/contract) research provide the best balance between joint knowledge development and value capture.

Who Gets the Money

Summary In this paper I analyze which firms receive R&D project grants and how this public support evolves over time by considering in particular firm’s previous participation. The extent of the dynamics of firms’ participation within the funding scheme gives information about the openness of the scheme towards non-participating firms. Using firm-level data on German manufacturing and knowledge-intensive service firms, it turns out that participation in the funding scheme shows a rather high level of continuity. This is also confirmed by applying a multivariate approach. Firms which received funding in the past are more likely to be selected for public funding again. Moreover, a firm’s size and knowledge capabilities increase the probability of entering the scheme.

Geographical Clustering and the Effectiveness of Public Innovation Programs

The paper analyzes how geographical clustering of beneficiaries might affect the effectiveness of public innovation support programs. The geographical proximity of firms operating in the same industry or field of technology is expected to facilitate innovation through knowledge spillovers and other localization advantages. Public innovation support programs may leverage these advantages by focusing on firms that operate in a cluster. We investigate this link using data from a large German program that co-funds R&D projects of SMEs in key technology areas called ‘Innovative SMEs’. We employ three alternative cluster measures which capture industry, technology and knowledge dimensions of clusters. Regardless of the measure, firms located in a geographical cluster are more likely to participate in the program. Firms being part of a knowledge-based cluster significantly increases their chance of receiving public financial support. We find no effects, however, of geographical clustering on the program’s effectiveness in terms of input or output additionality.

Mannheimer Innovationspanel (MIP), Scientific-Use-Files

Das ZEW erhebt seit 1993 jahrlich Daten zum Innovationsverhalten der deutschen Wirtschaft. Die Innovationserhebung deckt die Bereiche Bergbau, verarbeitendes Gewerbe, Energie, Baugewerbe, unternehmensnahe Dienstleistungen und distributive Dienstleistungen ab. Sie ist fur Deutschland reprasentativ und ermoglicht Hochrechnung fur die deutsche Wirtschaft insgesamt sowie fur einzelne Branchengruppen. Es wird im Auftrag des BMBF und in Kooperation mit infas und dem Fraunhofer-ISI durchgefuhrt. Das MIP ist gleichzeitig der deutsche Beitrag zu den Community Innovation Surveys (CIS) der Europaischen Kommission.