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transcript
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Using Business Innovation
Surveys to Learn about
Procurement and PPI - some
Experience from Germany
Christian Rammer
Centre for European Economic Research (ZEW), Mannheim
OECD Expert Workshop
Measurement of Public Procurement of Innovation
Paris, February 4th, 2013
2
Content
(1) „Sources of Innovation“ as a way to identify the role of
customers/demand (incl. customers/demand from the public
sector) for innovation
(2) Significance of PPI: results from the German Innovation
Survey
(3) Impact of PPI on firms„ innovation performance
(4) Strengths and limitations of this approach
3
Sources of Innovation
- Mansfield (1991): innovations that could not have been
developed in the absence of recent academic research
- Extending to other potential external sources that were
indispensible for developing and introducing product or
process innovation:
- customers/demand
- suppliers
- competitors
- regulation
- public science
- Firms had to assess the significance of each source for their
product and process innovations separately
- For each innovation source (except regulation), data on sector
and location of sources was collected (free text)
2-page question, included in 1999 and 2003 surveys
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Public Procurement Innovation
- PPI: purchase of innovative product the development of which
has been explicitly demanded by a public authority
- Simple purchase of innovative products by public authorities is
not PPI
- Public authorities also include public services
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- Sectors were assigned to NACE (rev. 1.1) 3-digit
- For each innovation source, sales with new products (for product
innovation) and cost savings (for process innovation) triggered by
that source were calculated using weights:
IOk = Si (Si aik wi) IO innovation output
S total sales / total costs a sales share of new products / cost savings share triggered by source k w weight of firm i in total firm population
- A sector‘s contribution to innovation output was calculated by
weighting IOk by the (approximate) share of sector j in all
innovation impulses received from source k
- Public administration and public services identified through
corresponding NACE (rev. 1.1) sectors (75, 80, 85, 40, 41, 60, 70,
73, 90)
Data Analysis
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Significance of Innovation Sources (1998 / 2002 average)
0 10 20 30 40 50 60 70 80
Customers/demand
Suppliers
Competitors
Public science
Regulation
Others*
0 5 10 15 20 25
Product innovation Process innovation
* include in-house R&D and other creative work and other external sources
share in total sales with new products 1996-1998 and 2000-2002 (%)
share in total cost savings due to process innovation 1996-1998 and 2000-2002 (%)
16
4
4
1
3
71
20
22
17
11
15
15
Source: Mannheim Innovation Panel (German CIS), surveys 1999 and 2003
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Significance of Public Procurement as Innovation Source (1998 / 2002)
Source: Mannheim Innovation Panel (German CIS), surveys 1999 and 2003
NACE rev 1.1
product innovation
process innovation
product innovation
process innovation
75/80 2.8 0.5 0.5 0.1 85 1.2 0.1 0.2 0.0 73* 0.2 0.7 0.0 0.1 90* 0.1 0.0 0.0 0.0 60* 2.4 0.3 0.4 0.1 70* 0.4 0.2 0.1 0.0 40/41* 0.4 0.4 0.1 0.1
Total 7.5 2.2 1.2 0.4
Regulation 3.5 15.4
Public science 1.5 10.8
* share of innovation impulses from public organisations estimated
Share in all innovation impulses by customers (%)
Share in total innovation output (%)
Public customers from
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Innovativeness of Demand I (1998 / 2002)
Source: Mannheim Innovation Panel (German CIS), surveys 1999 and 2003 – Federal Statistical Office of Germany: Input-Output-Tables
0 5 10 15 20 25 30 35
34 95
60_63 65_67
29 50/52
22 75/80 15_16
31 24*
70_71 32 45
01_05 51 64 74 85 33 35
36_37 24.4
72 28
17_19 25
40_41 20_21
30 26 27 55 73 23
10_14 90_93
innovation impulses by customers
domestic demand
share in total innovation impulses by customers/demand / share in total domestic intermediate consumption/final use/capital expenditure (%)
Cu
sto
mer s
ecto
r
NA
CE rev 1
.1
* 24 excl. 24.4
Share in total
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Innovativeness of Demand II (1998 / 2002)
Source: Mannheim Innovation Panel (German CIS), surveys 1999 and 2003 – Federal Statistical Office of Germany: Input-Output-Tables
* 24 excl. 24.4
share of sales of innovative products based on innovation impulses
from customers in total domestic intermediate consumption,
final use and capital expenditure of the customer sector
(export share of innovators estimated)
share of demanded innovation in total domestic demand (%)
0 5 10 15 20 25 30 35 40 45
34 24.4
65_67 50, 52 36_37
22 60_63
32 29 35 72 30
01_05 17_19
31 33 23 73 64
15_16 Total
51 25
10_14 85 26
24* 28 45
40_41 20_21
55 74 95 70 27
75_80 90
Cu
sto
mer s
ecto
r
NA
CE rev 1
.1
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Impact of PP on Innovation Performance
Aschhoff & Sofka (“Innovation on Demand – Can Public Procurement
Drive Market Success of Innovations?” Research Policy 38, 1235-1247,
2009):
- PPI contributes to higher sales with new products (which is true for
customer/demand impulses in general)
- no such effect found for defence demand, however
- SMEs, services and firms from eastern Germany profit most from PPI
Beise & Rammer (“Local User-Producer Interaction in Innovation and
Export Performance of Firms”, Small Business Economics 27(2-3), 207-
222, 2006):
- PPI tend to limit export activities of firms, particularly for service
firms that use PPI from the health sector
- „ideosyncratic‟ demand evident for private households
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Strengths and Limitations of the Approach
- Collecting data on various external sources for innovation
helps to provide a balanced picture of the drivers of innovation
- Information on sectors and location of innovation sources
offers a great potential for analysis
- Focussing on only one potential source (e.g. PP) risks to
overestimate the role of PP for industrial innovation
- Collecting full information on innovation sources requires
substantial questionnaire space and puts high burden on
respondents (and on statistical offices for coding texts)
- Limited opportunity to add additional questions on PP &
innovation
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Thank you for your attention!
rammer@zew.de