Promotion of innovation and Job Growth in Small- and Medium-Sized Enterprises in Australia: Evidence and Policy Issues

Small- and medium-sized enterprises play a substantial role in Australian growth and job creation. We discuss approaches to understanding the drivers of innovation and review evidence on the determinants of innovation by Australian small- and medium-sized enterprises. We also examine the role of these firms in job creation. Against this evidence and the conceptual underpinnings, we then discuss some issues that arise with the government's current innovation agenda

Schumpeterian economic dynamics as a quantifiable minimum model of evolution

We propose a simple quantitative model of Schumpeterian economic dynamics. New goods and services are endogenously produced through combinations of existing goods. As soon as new goods enter the market they may compete against already existing goods, in other words new products can have destructive effects on existing goods. As a result of this competition mechanism existing goods may be driven out from the market - often causing cascades of secondary defects (Schumpeterian gales of destruction). The model leads to a generic dynamics characterized by phases of relative economic stability followed by phases of massive restructuring of markets - which could be interpreted as Schumpeterian business `cycles'. Model timeseries of product diversity and productivity reproduce several stylized facts of economics timeseries on long timescales such as GDP or business failures, including non-Gaussian fat tailed distributions, volatility clustering etc. The model is phrased in an open, non-equilibrium setup which can be understood as a self organized critical system. Its diversity dynamics can be understood by the time-varying topology of the active production networks.Comment: 21 pages, 11 figure

Importance of Regional Innovation Systems (Japanese)

When a new technology is invented to solve a certain problem, communication occurs between inventors taking part in the process. With the advancement of information and communication technology, communication of explicit knowledge between individuals in distant places has become far easier than ever before. But what about in cases where highly intensive and wide-ranging communication is required and tacit knowledge needs to be exchanged? For instance, during invention activities, what is the distance across which inventors communicate and exchange tacit knowledge? This study uses inventors of patented biotechnology inventions as samples, measuring the distances between the home addresses of co-inventors. The distance across which explicit knowledge is communicated is measured in terms of the distance between an inventor's address and the address of a research institution to which a research paper cited in the relevant patent is attributed. The two distances are then compared. It has been found that the median inter-inventor distance is some 32 km, far shorter than the median communication distance of 4,300 km. This suggests that, even in this age of globalization, the presence of knowledge agglomeration within or nearby a specific country or region remains important to the enhancement of the industrial competitiveness of that country or region. The findings will serve as a useful reference for policy-makers in the formulation of science and technology policies as well as regional policies.

Spatial Characteristics of Joint Application Networks in Japanese Patents

Technological innovation has extensively been studied to make firms sustainable and more competitive. Within this context, the most important recent issue has been the dynamics of collaborative innovation among firms. We therefore investigated a patent network, especially focusing on its spatial characteristics. The results can be summarized as follows. (1) The degree distribution in a patent network follows a power law. A firm can then be connected to many firms via hubs connected to the firm. (2) The neighbors' average degree has a null correlation, but the clustering coefficient has a negative correlation. The latter means that there is a hierarchical structure and bridging different modules may shorten the paths between the nodes in them. (3) The distance of links not only indicates the regional accumulations of firms, but the importance of time it takes to travel, which plays a key role in creating links. (4) The ratio of internal links in cities indicates that we have to consider the existing links firms have to facilitate the creation of new links

The Effect of the Dynamics of Knowledge Base Complexity on Schumpeterian patterns of Innovation: the upstream petroleum industry

This paper addresses important changes in innovation patterns in the upstream petroleum industry over the period from the 1970s to 2005. It argues that the shifts in patterns of innovation over that period can be explained by the dynamics of knowledge base complexity (KBC). We develop a quantitative method to explore KBC and show that increasing KBC has shifted innovation patterns, from a broadly Schumpeter Mark I to a 'modified' form of Schumpeter Mark II, led less by the established oil majors, but by a new class of integrated service providers

The phase transition in random catalytic sets

The notion of (auto) catalytic networks has become a cornerstone in understanding the possibility of a sudden dramatic increase of diversity in biological evolution as well as in the evolution of social and economical systems. Here we study catalytic random networks with respect to the final outcome diversity of products. We show that an analytical treatment of this longstanding problem is possible by mapping the problem onto a set of non-linear recurrence equations. The solution of these equations show a crucial dependence of the final number of products on the initial number of products and the density of catalytic production rules. For a fixed density of rules we can demonstrate the existence of a phase transition from a practically unpopulated regime to a fully populated and diverse one. The order parameter is the number of final products. We are able to further understand the origin of this phase transition as a crossover from one set of solutions from a quadratic equation to the other.Comment: 7 pages, ugly eps files due to arxiv restriction

Prices in Motion: Towards a Schumpeterian Price Theory

To Schumpeter, endogenous development is an essential characteristic of capitalism that disrupts the equilibrium of the circular flow of the economy. Price equilibrium in the circular flow is displaced by an analysis of prices in motion. The diversion of productive inputs from their existing employment through competition from entrepreneurs and the process of creative destruction both impact on prices throughout the economy and generate business cycles. While Schumpeter's theory of the business cycle and, implicitly, his price theory, have been heavily criticized, this article suggests a way forward to a revised theory of prices in motion