Piergiuseppe Morone

FIRMS GROWTH, SIZE AND INNOVATION AN INVESTIGATION INTO THE ITALIAN MANUFACTURING SECTOR

Abstract This article aims at understanding the determinants of Italian small- and medium-sized enterprises’ (SMEs) turnover growth having in mind the fact that the Italian economic system relies substantially on small firms which have traditionally managed to stay competitive by adopting strategies such as the creation of well-integrated social and institutional clusters or specialising in the production of quality goods (the so called Made in Italy). However, the growing pressure coming from the Far East has rendered this production system vulnerable, challenging its international competitiveness. Building on a conceptual model, we found that, on average, young firms are more likely to experience positive growth; moreover, turnover growth is positively associated with firms’ size, process innovation, product innovation and organisational changes. In contrast, marketing innovation does not considerably affect Italian SMEs growth. When restricting our focus to a sub-sample of innovative firms, we found that those firms investing directly in innovating activities are almost 30% points more likely to experience positive growth, which is significantly affected also by workers and managers’ re-qualification. Finally, among innovative firms, process innovation and organisational changes are, by far, the most influential innovating strategies. The model was tested using a unique database which collects data for the year 2004, over a sample of 2600 SMEs.

Knowledge Diffusion and Innovation

Modern economies are described as ‘knowledge based’. This book investigates the meaning of such a statement, assessing the relevance of knowledge and the channels through which knowledge is exchanged, both from a theoretical and an empirical perspective.

A laboratory experiment of knowledge diffusion dynamics

This paper aims to study, by means of a laboratory experiment and a simulation model, some of the mechanisms that dominate the phenomenon of knowledge diffusion in the process that is called ‘interactive learning’.We examine how knowledge spreads in different networks in which agents interact by word of mouth. We define a regular network, a randomly generated network and a small world network structured as graphs consisting of agents (vertices) and connections (edges), situated on a wrapped grid forming a lattice. The target of the paper is to identify the key factors that affect the speed and the distribution of knowledge diffusion. We will show how these factors can be classified as follows: (1) learning strategies adopted by heterogeneous agents; (2) network architecture within which the interaction takes place; (3) geographical distribution of agents and their relative initial levels of knowledge; (4) network size. We shall also attempt to single out the relative effect of each of the above factors.

Guessing Games and People Behaviours: What Can We Learn?

In this paper we address the topic of guessing games. By developing a generalised theory of naA¯vetA©, we show how GA¼th et al..s result (i.e. convergence toward interior equilibria is faster than convergence toward boundary equilibria) is compatible with Nagel.s theory of boundedly rational behaviour. However, we also show how, under new model parameterisation, neither GA¼th et al..s story of convergence towards interior equilibria, nor Nagel.s theory of boundedly rational behaviour are verified. We conclude that the results of Nagel (1995) and GA¼th et al. (2002), however interesting, are severely affected by the ad hoc parameterisation chosen for the game.

Individual and group behaviour in the traveler's dilemma: An experimental study

We provide an experimental test of the travelers dilemma using individual and group data. Our investigation aims to assess whether individual decisions differ significantly from group decisions. Experimental findings reported in this paper show that: (1) groups are always more rational – i.e. their claims are closer to the Nash equilibrium; (2) the size of the penalty/reward influences convergence to the equilibrium both when decisions are taken individually or in groups; and (3) groups are more sensitive to the size of the penalty/reward.

Innovation, quality and exports: The case of Italian SMEs

We test the hypothesis that innovating and targeting the upper-quality segment of markets increases Italian small and medium enterprises probability to export, providing empirical evidence that supports it. We observed a positive-quality effect and a strong impact of non-technological innovations over future exports. We also observed that larger and older firms operating in traditional sectors are more likely to export. The most interesting results came from the introduction of interaction terms. We found evidence of a ‘super-additive effects’, which delineate synergic linkages between product innovation activities and quality strategy.

Food Waste Reduction and Valorisation

The importance of waste as a future feedstock for the chemical and allied industries is considered. In particular food supply chain waste is identified as a valuable source of useful chemical functions. While waste can contribute to resources globally it is likely to have an especially strong role in the industrial development of the emerging economies.

New consumption and production models for a circular economy

Economists have long attempted to understand the dichotomy between the finite quantity of natural resources and the seemingly unlimited human needs and wants. This contrast normally would resolve throughout free market actions and related materials pricing. However, modern societies and their embedded economic systems have proved to be unable to address natural resources scarcity in a satisfactory way. The tension between scarcity and human wants is expected to intensify as we anticipate the significant changes, which are bound to occur in the near future. Most notably, the world population, which in mid-2014 stands at 7.2 billion, is projected to increase by almost one billion people by 2025, and to reach 9.6 billion by 2050, as reported by the Food and Agriculture Organization of the United Nations (FAO) in 2015. At the same time, large and fast-growing economies such as China and India, in spite of the recession declines in recent years, are still growing at high rates of 6.8% and 7.4%, respectively. This will surely lead to increasing wealth. A major effect of these two trends will be a higher demand and consumption of food, manufactured goods and energy sources, adding pressure to the world economic system and the environment. Overarching these issues are the threat of climate change and the mounting concern to manage sustainably the increasing amounts of waste produced worldwide. Contemporary consumerism (i.e. the production and consumption patterns prevailing in high income countries) does not appear to be an economic model able to address all these challenges simultaneously. Hence, a transition from the current ecologically untenable modes of consumption and production towards new and more sustainable models seems a desirable and much needed objective. Under these circumstances, the passage from a linear take– produce–consume–discard material flow system to a circular and regenerative model could play a central role in paving the way for transition to a more sustainable economic system that uses resources in a more efficient way, reducing the overall generation of wastes and facilitating the recovery of unavoidable wastes as the source of resources for the production of new products. Hence, a new circular paradigm is gaining momentum and is being propelled through the growing popularity of various, and often complementary, new economic models, e.g. peer-to-peer provisioning networks, alternative agro-food arrangements, community-energy schemes, worker–owner cooperatives and initiatives to facilitate less resource-intensive lifestyles, as described by Cohen (2013). However, these emerging innovations and models are cutting against incumbent socio-technical systems in critical areas, such as energy consumption, food supply and mobility. It requires a major undertaking to successfully scale up these innovations to a level where they might begin to challenge dominant socio-technical practices. Against this background, in this editorial we address some issues associated with this sustainability transition, drafting the possible contours of the new paradigm of the approaching circular-economy and the role that new consumption and production models might play in creating favourable conditions for such a transition. Back in 1990, Pearce and Turner introduced the concept of a circular economy into mainstream economic theory. In their well-known textbook on environmental economics, the authors addressed the interlinkage between the environment and the production/consumption economic model. In their newly proposed circular scheme, the environment provides amenity values, is a resource base and a sink for economic activities, and is also a fundamental life-support system. Within the model, production is aimed at producing consumer goods (and capital goods, which in turn, produce consumption in the future). The purpose of consumption is to increase consumer’s utility and/or enhance social welfare. However, at each stage of the supply chain, waste is produced. To some extent this waste might be recycled and reconverted into resources, reducing the need to mine virgin resources and, through this, the economy becomes circular. Yet, not all waste can be recycled or is recyclable, partly owing to missed opportunities and partly owing to basic physical and thermo-dynamical laws. The amount of waste that can be recycled depends crucially on the capacity of the environment to assimilate residuals from the economic system. Once the assimilative capacity is exceeded, environmental damage occurs. This model is also fit to account for the finitude of resources. In fact, the environment provides a resource base, which functions as an input for the economy, both in terms of renewable resources and exhaustible resources. Many biological resources are renewable and can be harvested for economic purposes with no or limited impact, as long as the harvest does not exceed the annual yield. More problems arise in the case of exhaustible resources (e.g. fossil fuels and metals), where the physical stock, by definition, will be gradually depleted as the resources are extracted and brought into the economic system. Resource depletion, however, is possible both for exhaustible and renewable resources, this depending crucially on harvest and yield respective magnitudes. Bearing this in mind, new production and consumption models would have to consider in this circular scheme two further dimensions, namely reduce and reuse. Reduction can be achieved both on the production side (producing with less) as well as on the New consumption and production models for a circular economy 652281WMR0010.1177/0734242X16652281Waste Management & ResearchEditorial editorial2016

Knowldge diffustin with complex cognition

This book focuses on knowledge-based economies and attempts to analyze dynamic innovation driven processes within those economies. It shows that evolutionary economics, and in particular the strand of applied industry and innovation studies often called Neo-Schumpeterian economics, has left the nursery of new academic approaches and is able to offer important insights for the understanding of socio-economic processes of change and development having a strong impact on economic reality all over the world. The contributions are summarized under four major sections – knowledge and cognition, studies of knowledge-based industries, the geographical dimension of knowledge-based economies and measuring and modelling for knowledge-based economies – and give a broad overview of the prolific research being undertaken in applied evolutionary economics.

Addressing uncertainty in complex systems. The case of bio-based products derived from urban bio-waste valorisation

This research study aims at providing insight into how different types of uncertainty (with different implications for the various stakeholders) affect the quality of decisions taken in the bio-based products market and consequently its further development and also, more generally, the shift towards a bio-based economy.