Environmental Engineering Reference
In-Depth Information
represented by the count of patent applications at the EPO by 23 countries over the
period 1990
2010, is regressed against a set of explanatory variables referring to
innovation, market, institutional, energy and environmental systems. The groups of
explanatory variables are as follows.
The Innovation System There is a large strand of literature on the role of national
and sectoral innovation systems [ 59 ]. Recently, the innovation process as a whole
has been interpreted as the result of complex relationships between different actors,
including not only market players but also private and public institutions, gov-
ernment interventions and intangible elements such as spillover effects and tacit
knowledge
-
ows. In this study, we particularly stress the role of public policies in
inducing innovation in EE, but other general aspects of the innovation system are
also taken into account. First, we test efforts and the capability to innovate at
country level
proxying the knowledge stock via national gross expenditure in
R&D (GERD), which includes expenditure by business enterprises, higher educa-
tion institutions, the government and private non-pro
t organisations (data taken
from OECD Main Science and Technology Indicators, [ 63 ]). Besides this, sectoral
features of the energy-technology system also have to be considered. Indeed, the
energy sector is characterised by certain speci
c aspects that affect the performance
of technological improvements such as slow response to stimuli to innovate due to
high capital intensity, longevity of capital stock, time needed for learning and
experimentation, clustering and spillovers [ 72 , 80 ]. In the light of this, we also test
the sectoral knowledge stock for energy, proxied by speci
c expenditure in R&D
on EE, using data provided provided by the IEA [ 36 ].
We assume that technological knowledge operates cumulatively, and can thus be
added up over time. On the other hand, knowledge is subject to deterioration as it
becomes obsolete [ 20 ] and should be discounted to take this effect into account. The
literature suggests a knowledge depreciation rate of between 10 and 40 % per
annum (see [ 7 , 22 , 26 , 55 ]). We have decided to apply a moderate decay rate of
15 % 3 considering the high level of
that characterises the energy tech-
nology system. In order to build up the national and sectoral knowledge stocks, we
follow the Perpetual Inventory Method suggested in OECD [ 60 ] as follows:
inertia
n
o
X
t
e c tðÞ
½
Stock R & D ¼
R
D i ; s
ð 1 Þ
&
s ¼0
where
indicates the discount rate, i indexes countries and s, t index time. All
values, for both GERD and R&D in EE, are converted into constant US dollars at
2010 levels.
The Market System Market effects in spurring innovation have been extensively
analysed in economics, dating back to the seminal work by Hicks [ 29 ] which gave
prices the role of a driving force for more ef
γ
cient input substitution in which part
3 As a sensitivity analysis, we also tested different discount rates (speci cally 10 and 20 %), but
they did not affect our results signi cantly.
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