• Innovation flows across regions and sect

    From ScienceDaily@1:317/3 to All on Tue Apr 5 22:30:38 2022
    Innovation flows across regions and sectors in complex ways, study shows


    Date:
    April 5, 2022
    Source:
    University of Illinois College of Agricultural, Consumer and
    Environmental Sciences
    Summary:
    Knowledge creation -- the generation of new ideas and patents -- is
    an important driver of economic growth. Understanding how knowledge
    moves across industry sectors and regions can inform research and
    development (R&D) efforts, promote university-industry partnerships
    for innovation, and impact private businesses' location decisions. A
    new study provides a thorough look at the flow of knowledge in
    five industrial sectors across the United States.



    FULL STORY ========================================================================== Knowledge creation -- the generation of new ideas and patents -- is an important driver of economic growth. Understanding how knowledge moves
    across industry sectors and regions can inform research and development
    (R&D) efforts, promote university-industry partnerships for innovation,
    and impact private businesses' location decisions. A new study from the University of Illinois in collaboration with Stockholm University and
    Korea Labor Institute provides a thorough look at the flow of knowledge
    in five industrial sectors across the United States.


    ==========================================================================
    "Our work provides a sort of cooking recipe for patent creation, with a
    list of ingredients that vary by industrial sector," says Sandy Dall'erba, professor in the Department of Agricultural and Consumer Economics (ACE)
    and director of the Center for Climate, Regional, Environmental and
    Trade Economics (CREATE) at U of I. Dall'erba is a co-author on the study.

    "Some sectors depend very much on local input factors, such as the
    presence of a university, versus elements located further away, such
    as spending in R&D by another private company. In some cases, this
    type of collaboration takes place across companies located thousands of
    miles apart as virtual meetings increasingly have replaced face-to-face meetings," Dall'erba states.

    "In addition, our research measures the extent to which innovation
    in one sector depends on R&D in the same sector or other sectors. For
    instance, new patents in the drug and medical industry depend on local
    and distant R&D in the chemical industry." Traditionally, geographical proximity was considered essential for knowledge flows. Clusters such
    as Silicon Valley's high-tech industry or Detroit's automobile industry facilitate face-to-face interactions and informal networking. Economists
    now acknowledge innovations may be shared across greater distances,
    but most studies have looked at aggregate results rather than location-
    and industry-specific patterns.

    "We wanted to see the importance of geography for the patterns of
    knowledge creation in specific industries. We also wanted to examine how information flows across similar or different industries. Finally, we
    look at spillovers from private and university research and development activities," says lead author Orsa Kekezi, a scholar at the Swedish
    Institute for Social Research at Stockholm University. Kekezi began
    working on this research while she was a visiting scholar at Illinois.



    ==========================================================================
    The researchers analyzed knowledge transfers across 853 metropolitan U.S.

    counties in five manufacturing industries: chemical, drugs and medical, mechanical, computer and communication, and electrical and electronic.

    The study uses patent applications as a proxy for knowledge creation,
    tracking the flow from where patents are created to where they are cited
    (based on data from the U.S. Patent and Trade Office). This measures
    the directionality of innovation and identifies the role of external
    factors in knowledge output.

    The core elements in the analysis are intra- and inter-sectoral knowledge spillovers, as well as intra- and interregional flows, defined as local
    (within county), short distance (neighboring counties in 50-mile radius),
    and the rest of U.S. (beyond 50 miles). The researchers also looked at
    the presence of university and private research and development, as well
    as other factors, such as the number of graduate degree holders and the industrial diversity in a county.

    "Overall, the local environment matters greatly for all the sectors. The industry structure in the region, the size of firms, whether there is
    a university -- these elements all matter for innovation. All sectors
    benefit from the local environment," Kekezi states.

    But the specifics vary by sector and provide a complex picture of
    interactions.

    There is no one-size-fits-all approach for the development of patents,
    and if you look at average results, you'll miss the intricate details
    and patterns across sectors and regions.



    ========================================================================== "While university research matters for all the sectors, there is
    large heterogeneity here as well," says study co-author Dongwoo Kang, a research fellow at the Korea Labor Institute, South Korea. "For example,
    it matters more for the chemical industry and the drugs and medical
    industry; those sectors really benefit from basic research.

    "Universities provide the core research that is needed for the chemical industry to work. Unlike perhaps the mechanical or electric industries,
    the chemical industry relies more on faculty scholars who are looking
    at basic processes," he adds.

    Interregional spillovers matter less in the chemical industry, so
    face-to-face contact is important. On the other hand, for the drugs
    and medical industry, both inter-sectoral and long-distance regional
    spillovers matter, so geographic proximity is not as necessary. And for
    the electrical and electronic industry, inter-sectoral short-distance spillovers play a significant role.

    The study findings can help companies decide where to locate their establishments.

    "The idea that a company values proximity to a university, or where
    research and development are already happening, still holds true. But we
    also show the network of innovation is not completely local," Dall'erba
    states.

    "The main takeaway from the paper is that we should not only look at local spillovers. We should look at knowledge that comes from further away,
    and from other industries," Kekezi notes. "New ideas don't come only by
    looking at what has been done in one's field, but also from looking at
    the broader picture and how we can combine different types of knowledge
    to create something new." The development of COVID-19 vaccines serves
    as an example, Kang adds.

    "The U.S. invested a lot of money in research and development to stimulate innovation in creating the first COVID-19 vaccines. This is typically
    done through a central cluster that serves as a basis for innovation. But
    there are also other networks making new COVID-19 vaccines. Our findings
    imply that not only local activities, but also research and development in other places are important for making new COVID-19 vaccines," he explains.

    The findings can also help improve the design of future local and national innovation policies.

    "We need to move away from an approach whereby everything is driven by
    similar mechanisms and instead understand much better what really works
    for one industry might be quite different from what works for another
    industry. It's not just about promoting industry clusters; it's more complicated than that.

    When governments try to promote innovation, they need to define a
    strategy that works for a specific industry and a specific location,"
    Dall'erba says.


    ========================================================================== Story Source: Materials provided by University_of_Illinois_College_of_Agricultural,_Consumer and_Environmental_Sciences. Original written by Marianne Stein. Note:
    Content may be edited for style and length.


    ========================================================================== Journal Reference:
    1. Orsa Kekezi, Sandy Dall'erba, Dongwoo Kang. The role of
    interregional and
    inter-sectoral knowledge spillovers on regional knowledge creation
    across US metropolitan counties. Spatial Economic Analysis, 2022;
    1 DOI: 10.1080/17421772.2022.2045344 ==========================================================================

    Link to news story: https://www.sciencedaily.com/releases/2022/04/220405171802.htm

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