Entrepreneurial innovations in a regional context

Background and Objective

When a new product or process is introduced to the market, it is called an innovation. Companies that successfully produce innovations can improve their competitiveness and strengthen their market position. If innovations occur in a spatially concentrated manner, special growth forces can be released, from which the affected regions benefit. The emergence and success of an innovation depend on numerous factors. These include entrepreneurial resources, the characteristics of the location, or the nature of the regional and national innovation system.

The aim of the research project is to better understand the interplay of these factors and thus to be able to more specifically identify the conditions under which companies successfully generate new products and processes. To this end, we draw on influencing factors at various levels, including factors from the regional, industry, company and personal levels. In terms of economic policy, we are particularly interested in the impact of support instruments for new technologies and markets, and in spatial terms, possible differences between rural and non-rural regions. By identifying the driving forces and barriers to entrepreneurial innovation, the project aims to derive recommendations for political decision-makers.

Approach

To investigate the innovation activities of companies, conceptual frameworks and hypotheses are derived, which are empirically-quantitatively tested using new data sets. These data sets are processed as a longitudinal study (panel survey), evaluated descriptively and analyzed for the effect and interplay of influencing factors using microeconometric methods. The results will be used to provide recommendations for economic policy action.

Data and Methods

The innovation activities of companies are operationalized using patent data from the German Patent and Trademark Office (DPMA) over a long historical period. In addition, micro data from the Institute for Employment Research (IAB) are used to include region- and industry-specific factors. Further industry- and market-specific data are processed using information from the trade register and industry reports. The microeconometric methods used include logistic regressions, multilevel models, event-time analyses and instrumental variable estimations.

Our Research Questions

• Which firm- and region-specific factors determine the type, scope and spatial distribution of innovation activities?
• To what extent do innovation activities differ between rural and non-rural areas?
• What is the effect of political support instruments for new technologies and markets on the innovation behavior of firms?

Preliminary Results

Our preliminary research findings show that innovation activities are determined not only by company and industry characteristics but also by a complex system of actors and their relationships with each other. These systems are understood as 'innovation systems', which vary regionally in their characteristics. A favorable configuration of innovation systems can generate locational advantages that have a positive impact on innovation and competitiveness of companies. In this respect, however, companies in rural regions have a general locational disadvantage because, first, they have fewer highly qualified employees and, second, they have fewer opportunities to exchange knowledge with partner actors. Here, for example, it can help to focus knowledge transfer activities (e.g., within clusters) or to establish supraregional collaborations (e.g., within the global value chain). With regard to company and industry characteristics, high innovation activity can be observed especially in those companies that come from specific parts of the value chain, that have prior experience in technology development (e.g., through the founding individuals), or that operate in less dynamic industries (e.g., mechanical engineering). Furthermore, initial analyses show that the innovation-promoting effect of political influence depends on the type of instrument used (i.e. technology or demand subsidies), the regional initial conditions and the industry-specific context.

Links and Downloads

Related project website DFG Network https://www.uni-bremen.de/en/dfg-network-the-dynamics-of-innovation-systems

Related project website Mod-Block-DDR https://www.uni-bremen.de/en/obstacles-to-modernization-in-the-economy-and-science-of-the-gdr-mod-block-ddr