Showing papers by "Peter Howitt published in 2013"

What Do We Learn from Schumpeterian Growth Theory

Abstract: Schumpeterian growth theory has "operationalized" Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.

What Do We Learn From Schumpeterian Growth Theory

Abstract: Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case, Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.

« Testing Creative Destruction in an Opening Economy: the Case of the South African Manufacturing Industries »

Abstract: This paper analyses the relationship between trade liberalization and economic growth using a Schumpeterian framework of technological innovation and applies it to sector-level South African data. The framework examines direct and indirect effects of trade liberalization on productivity growth. Indirect impacts operate through a differential impact of trade liberalization on firms conditional on their distance from the international technological frontier. Results confirm positive direct impacts of trade liberalization. Results confirm also that the greatest positive impact of trade liberalization will be on sectors that are close to the international technological frontier and that experienced a low level of product market competition before liberalization.

What Do We Learn From Schumpeterian Growth Theory

Abstract: Schumpeterian growth theory has "operationalized" Schumpeter''s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process which could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.

From Curiosity to Wealth Creation: How University Research Can Boost Economic Growth

Abstract: Technological and scientific research are crucial to long-term economic growth. Canadians are three times as rich today as 50 years ago thanks to new products and processes. The source of technological innovation is research and development (RD• developing a template available to all university researchers that outlines the terms of commercialization – such as intellectual property rights or revenues – between universities, researchers and their business partners; and• building on recent reforms to the National Research Council that make it more business-oriented, but with the eventual goal of making it a pan-Canadian technology transfer institution, leaving federal funding for research to granting organizations.Since business R&D has been falling as a share of the Canadian economy, and is a critical input to the commercialization of university research, it is also important that Canadian governments take measures to encourage Canadian businesses to invest in the commercialization process.

Revisiting the Relationship between Competition, Patenting and Innovation

Abstract: A thought-provoking book by Boldrin and Levine (2009) argues that patents are always detrimental to competition and thereby to innovation. To provide support to their analysis these two authors built a growth model where innovation and growth can occur under perfect competition. The model is then used to argue that monopoly rents and therefore patents are not needed for innovation and growth: on the contrary, patents are detrimental to innovation because they reduce competition. That reducing competition can be detrimental to innovation, is a sound idea which could not be accounted for by the new growth models of Romer (1990) and Aghion and Howitt(1992). In these models, competition is detrimental for innovation and growth for exactly the same reason for why patent protection (IPRs) is good for innovation: namely because competition reduces (post innovation) rents whereas patent protection increases these rents. In this note we argue that this latter conclusion is not robust to considering more elaborated models of competition and innovation. In particular we show below that in a step-by-step innovation model, where a laggard firm needs to catch up with the current leader in its sector (and therefore go through a neck-and-neck stage) before it could later become a leader itself, not only can competition enhance innovation as in Boldrin and Levine’s model, but also and perhaps more importantly competition and IPRs become complementary policies. Why? Because the incentive to innovate depends on the gap between the post-innovation rent and the pre-innovation rent, call it the net innovation rent. And typically, what competition does is to lower pre-innovation rents, and also maybe post-innovation rents, although the difference between postand preinnovation rents may still increase with competition, and all the more so with stronger patents to protect post-innovation rents. In contrast, in our earlier Schumpeterian models where innovations are made by outsiders who then leapfrog incumbent firms, the pre-innovation rent is always equal to zero, thus all ∗Harvard University †Brown University ‡University of Cologne

Patent Rights, Product Market Reforms, and Innovation

Abstract: Can patent protection and product market competition complement each other in enhancing incentives to innovate? In this paper, we address this question by investigating how innovation responses to a substantial policy initiative increasing product market competition interact with the strength of patent rights. We provide empirical evidence of innovation responding positively to the product market reform in industries of countries where patent rights are strong, not where these are weak. The positive response to the reform is more pronounced in industries in which innovators rely more on patenting than in other industries, and in which the scope for deterring entry through patenting is not too large. Our empirical findings are in line with step-by-step innovation models predicting that product market competition enhances innovation and, more importantly, that patent protection can complement competition in inducing innovation.

From Curiosity to Wealth Creation: How University Research can Boost Economic Growth

Abstract: Technological and scientific research are crucial to long-term economic growth. Canadians are three times as rich today as 50 years ago thanks to new products and processes. The source of technological innovation is research and development (RD • developing a template available to all university researchers that outlines the terms of commercialization – such as intellectual property rights or revenues – between universities, researchers and their business partners; and • building on recent reforms to the National Research Council that make it more business-oriented, but with the eventual goal of making it a pan-Canadian technology transfer institution, leaving federal funding for research to granting organizations. Since business R&D has been falling as a share of the Canadian economy, and is a critical input to the commercialization of university research, it is also important that Canadian governments take measures to encourage Canadian businesses to invest in the commercialization process.

How University Research Can Boost Economic Growth

Abstract: Technological progress is the ultimate source of long-run economic growth. It is what makes the average Canadian three times as rich today as fifty years ago. We are richer not because we produce more typewriters, black and white television sets and rotary-dial telephones, using the same processes as fifty years ago, but because we have invented new products and processes. We now have jet airliners, highdefinition televisions, computers and automatic teller machines; we have discovered new production processes, like lean manufacturing techniques and just-in-time inventory management that produce and deliver goods more efficiently than before; and we have made medical advances like laser surgery, organ transplants and angioplasty that enable us to live longer and healthier lives.

Comment on 'PSST: Patterns of Sustainable Specialization and Trade' (by Arnold Kling)

Abstract: This paper is a comment on PSST: Patterns of Sustainable Specialization and Trade by Arnold Kling which can be found at: http://ssrn.com/abstract=2208029.