The R&D Drop in European Utilities. Should we care about it?

By using accounting data from the largest utility companies of Europe, this note illustrates the recent R&D performance in energy and telecommunication. Although not all the companies under consideration behaved symmetrically, most of them reduced substantially their R&D investment. Over the period 2000-05, their total R&D expenditures at current prices decreased by 33%, while their R&D intensity (on sales) diminished from 1.1 to 0.7%. In discussing the above findings, it is argued that a drop of this size is hardly justifiable and weakens the EU economy in a non-negligible manner.R&D performance; energy and telecommunication utilities

Energy R&D in private and state-owned utilities: an analysis of the major world electric companies

The last two decades have witnessed a staggering decline of R&D investment in the fields of energy and electricity. This paper contends that this widespread phenomenon is mainly ascribable to the processes of liberalisation and privatisation of electricity markets which have induced electric utilities to dramatically reduce R&D expenditures. However, a closer inspection to recent data concerned with ten major electric companies of the world shows that not all of them behaved in the same way. The drop of research expenditures was particularly strong among the private or newly-privatised companies, while those that remained under public control did not reduce R&D efforts. Moreover, the choice of maintaining an adequate level of R&D was not at odds with the goal of increasing company profits. According to these findings and to the widely recognised need of a surge of energy R&D, radical policy measures seem necessary. Along with an R&D obligation for private electric utilities, also an extension of public ownership or the introduction of public-private partnerships should be seriously taken into account.Energy R&D; Electric utilities; Public and private enterprises

R&D and productivity in high-tech manufacturing: a comparison between Italy and Spain

Using data for twelve manufacturing industries over the period 1980-2006, we perform for Italy and Spain a dynamic panel estimation of the long-run elasticity of TFP with respect to R&D capital. The results show that in Spain high-tech industries have experienced a similar or slightly higher R&D elasticity than their Italian counterparts. This is mainly attributable to what occurred from the mid 1990s onwards when, thanks to increasing R&D efforts, the Spanish industries have been able to catch up with the respect to the Italian ones. The policy implications of the above findings are discussed.Manufacturing industries; Italy and Spain; Productivity growth; R&D capital

Determinants of patent withdrawals: evidence from a sample of Italian applications with the EPO

This paper analyses the propensity to withdraw European patent applications within a regional sample of Italian applicants. The procedure for obtaining a granted patent from the EPO is composed of a series of sequential and selective steps imposing additional costs to the applicants. Accordingly, we argue that early withdrawals - i.e. those occurring before the proper examination process begins - should be treated separately from late withdrawals. Our findings show the probability of an early withdrawal is higher for applicants with lower resources and competencies and rises with the number of backward citations added by EPO examiners to the original application. Late withdrawals, instead, are negatively affected by one factor only: the size of patent family, which approximates the sunk costs born by applicants in order to extend the geographical scope of patent protection. Such a limited explanation suggests that the (unobserved) interventions of EPO examiners are likely to play a significant role in inducing late withdrawals.Patent withdrawals; Applicants’ features; Patent quality; Patent examination

Managerial incentive and the firms’ propensity to invest in product and process innovation

We study the product and process innovation choice of firms in which a managerial incentive à la Vickers (1985) is present. Taking a two-stage dynamic game approach, we show that managerial firms are led to over-invest in process innovation, as compared to standard profit-maximising firms, while they under-invest in product innovation. The reason is that process innovation allows to decrease cost, and this is consistent with a convenient increase in the production level. On the opposite, product innovation allows increasing price, which is in contrast with the taste for output expansion embodied in the objective function of firms run by managers. Preliminary empirical evidence on Italian companies suggests that in fact the managerial nature of firm associates with significantly smaller efforts in product innovation while the effect on process innovation is positive but non-significant.Process innovation; Product innovation; R&D; Managerial incentive

Managerial incentive and the firms' propensity to invest in product and process innovation

We study the product and process innovation choice of firms in which a managerial incentive à la Vickers (1985) is present. Taking a two-stage game approach, we show that managerial firms are led to over-invest in process innovation, as compared to standard profit-maximising firms, while they under-invest in product innovation. The reason is that process innovation allows to decrease cost, and this is consistent with a convenient increase in the production level. On the opposite, product innovation allows increasing price, which is in contrast with the taste for output expansion embodied in the objective function of firms run by managers. Preliminary empirical evidence on Italian companies suggests that in fact the managerial nature of firm associates with significantly smaller efforts in product innovation while the effect on process innovation is positive but non-significant

Energy R&D in private and state-owned utilities: an analysis of the major world electric companies

The last two decades have witnessed a staggering decline of R&D investment in the fields of energy and electricity. This paper contends that this widespread phenomenon is mainly ascribable to the processes of liberalisation and privatisation of electricity markets which have induced electric utilities to dramatically reduce R&D expenditures. However, a closer inspection to recent data concerned with ten major electric companies of the world shows that not all of them behaved in the same way. The drop of research expenditures was particularly strong among the private or newly-privatised companies, while those that remained under public control did not reduce R&D efforts. Moreover, the choice of maintaining an adequate level of R&D was not at odds with the goal of increasing company profits. According to these findings and to the widely recognised need of a surge of energy R&D, radical policy measures seem necessary. Along with an R&D obligation for private electric utilities, also an extension of public ownership or the introduction of public-private partnerships should be seriously taken into account

The R&D drop in European utilities. Should we care about it?

By using accounting data from the largest utility companies of Europe, this note illustrates the recent R&D performance in energy and telecommunication. Although not all the companies under consideration behaved symmetrically, most of them reduced substantially their R&D investment. Over the period 2000-05, their total R&D expenditures at current prices decreased by 33%, while their R&D intensity (on sales) diminished from 1.1 to 0.7%. In discussing the above findings, it is argued that a drop of this size is hardly justifiable and weakens the EU economy in a non-negligible manner

The R&D drop in European utilities. Should we care about it?

By using accounting data from the largest utility companies of Europe, this note illustrates the recent R&D performance in energy and telecommunication. Although not all the companies under consideration behaved symmetrically, most of them reduced substantially their R&D investment. Over the period 2000-05, their total R&D expenditures at current prices decreased by 33%, while their R&D intensity (on sales) diminished from 1.1 to 0.7%. In discussing the above findings, it is argued that a drop of this size is hardly justifiable and weakens the EU economy in a non-negligible manner