funda 6 Flashcards
(15 cards)
According to the neoclassical framework, what is the primary justification for public policy intervention in the realm of innovation?
The neoclassical framework suggests that public policy intervention is mainly needed due to market failures concerning scientific and technological information. This is because the market alone often does not produce the optimal level of these goods due to their unique characteristics, requiring government involvement to correct the imbalance.
What are the two key characteristics of scientific and technological information that lead to market failures within the neoclassical framework?
Scientific and technological information is considered a public good with two critical characteristics: non-rivalry in consumption (meaning that one person’s use doesn’t diminish its availability to others) and non-excludability (it is difficult to prevent anyone from using it). These characteristics mean that private firms will under-invest in these types of goods without policy intervention.
What are three characteristics of basic Research and Development (R&D) that often necessitate policy support?
Basic R&D is often characterized by indivisibility (high fixed costs), which can be a barrier for smaller firms; high uncertainty, as the outcomes are not always predictable; and spillovers, where the benefits of the research can’t be fully captured by the investing firm. These factors lead to underinvestment from the private sector and necessitate public funding.
According to the neoclassical perspective, why might a patent system be introduced as a policy measure?
A patent system is introduced to address the issues of technology spillovers and the lack of appropriability of innovation. Without patents, firms might not invest in R&D due to the risk that their innovations could be easily copied by competitors without any costs, so patents aim to provide a temporary monopoly to incentivize innovation.
From an evolutionary viewpoint, why are technology and innovation policies considered necessary?
From an evolutionary perspective, technology and innovation policies are necessary because evolutionary system failures can hinder the full development of technologies or slow down the rate of innovation. These failures can include issues within the system that prevent new technologies from emerging and developing.
Describe three types of evolutionary failures that can impede innovation and technological progress.
Three types of evolutionary failures include: 1) failures in generating high technological opportunity conditions, which refers to a lack of environment conducive to new ideas; 2) failures in learning and capability accumulation, which is when organizations fail to learn from past mistakes or fail to accumulate necessary resources; and 3) evolutionary lock-ins and trade-offs, where industries struggle to switch from older, inefficient technologies or when they can’t manage trade-offs between old and new ways of doing things
What are some common failures of policymakers that can undermine the effectiveness of innovation policies?
Common failures of policymakers include not learning from mistakes and lack of competence, which suggests policymakers should be adaptive and capable; lack of flexibility and adaptability meaning that policies should evolve as needed, misrepresentation of sectoral systems, technologies, or institutional frameworks, demonstrating the need to be informed and aware of the realities on the ground; lack of appropriate vision which can result in ineffective policies, and coordination failures, which can result in ineffective policies
From a systems perspective, what constitutes a failure in the innovation system?
A system failure occurs when a key element necessary for the working of the system is missing, or if that element has limited competencies or low absorptive capabilities. This highlights the need for a well-functioning system with all components capable of their roles
According to Henry Ergas’s taxonomy, what are the three different types of countries and the policy approaches they typically adopt?
Ergas identifies three types: Mission-oriented countries, such as the USA, France, and the UK, which aim for international leadership in specific technologies and use centralized policies; diffusion-oriented countries, like Germany, Sweden, and Switzerland, which focus on developing distributed competencies among SMEs through decentralized policies; and Japan, which has adopted a combination of both, focusing on R&D cooperation as a mission-oriented policy and diffusion strategies.
What is the central idea behind Mariana Mazzucato’s concept of the “Entrepreneurial State” and how does it differ from traditional views of the state’s role in the economy?
Mazzucato’s concept of the “Entrepreneurial State” argues that the state does not simply level the playing field but also actively creates and shapes markets. This contrasts with traditional views that see the state’s role as mainly regulatory and corrective, arguing instead that the state is a proactive driver of innovation through investments in research and development.
What three main types of policies have been supported by all countries in the field of science, technology, and innovation?
All countries have supported three types of policies: science policies, which focus on funding basic research; technology policies, which aim to develop specific technologies; and innovation policies, which are designed to promote the adoption and diffusion of new technologies
What is the primary focus of supply-side policies in the context of innovation?
Supply-side policies focus on the potential suppliers of new technologies. These policies aim to improve the ability of companies and research institutions to develop and supply new innovations through measures such as subsidies and financial support.
What is the main focus of demand-side policies in promoting innovation?
Demand-side policies focus on the demand side of new technologies, aiming to stimulate adoption and diffusion of innovations by reducing costs, creating awareness, or through government procurement programs. The idea is that the government can play an active role in stimulating innovation by creating demand for new technologies.
Provide three examples of industrial policies implemented by different countries or regions to support their economies and technological capabilities.
Examples include the USA’s CHIPS Act and Inflation Reduction Act, which aim to boost domestic semiconductor manufacturing and clean energy technologies; the EU’s Green Deal Industrial Plan, which promotes green technologies, and Japan’s New Direction on Economy and Industrial Policy, and Korea’s K-Chip Act. These policies demonstrate strategic interventions by governments to develop specific sectors.
What are some of the key sectors targeted by China’s “Made in China 2025” plan
Key sectors targeted by the “Made in China 2025” plan include ICT (Information and Communications Technology), robotics, aerospace, clean energy, new materials, biological medicine, medical devices, and agriculture. This plan is a comprehensive strategy to upgrade China’s manufacturing capabilities and enhance its technological leadership.
