Studies have revealed that the social rate of return on R&D expenditures is usually very large, and frequently exceeds private returns by as much as three times (Jones and Williams, 1998). Moreover, these studies prove that the returns to R&D exceed by a big margin the returns from other types of investments, especially from investment in physical assets. Clearly there are wide margins to increase the resources dedicated to R&D at the economy-wide level, and that the government needs to play a role in doing so.
Spillovers can occur in numerous different ways, mobility of the R&D personnel being one of them. Employees acquire R&D skills and knowledge of the technologies and markets. This knowledge is partly general and goes beyond the knowledge embodied in any specific innovation that they developed. Now this cannot be fully protected by Intellectual Property Rights (IPRs). Employees who leave one firm and join another carry with them this human (or innovation) capital, which can benefit their new employers. If mobility is accompanied by migration, then the spillovers may be reaching the destination countries.
Hence the mobility of inventors is an important transfer mechanism for spillovers. Spillovers may also take place through economic transactions, such as trade: countries can improve their productivity by importing goods, particularly capital equipment with advanced technologies (Coe, Helpman and Hoffmaister, 1997), as well as through foreign direct investment, FDI (Blomstrom and Kokko, 1999). (Bottazzi,; Giovanni 1999 p. 3) Stephen Martin’s stochastic innovation model differentiates and thinks about simultaneous input spillovers and output spillovers.
High R&D input spillovers and low appropriation of the rents that flow from successful innovation reduce the profit that flows from successful innovation, but for different reasons. High input spillovers mean that a firm’s R&D effort contributes to its rivals’ R&D programs. Low output appropriation means that a firm profits less from successful innovation if it is the first to innovate, all else equal. In the post-innovation market, a successful innovator’s payoff increases if there is greater appropriation, all else equal.
But in industries where input spillovers are low, firm value is maximized at low appropriation levels: a greater chance to benefit from another firm’s discovery after innovation compensates for a limited possibility of benefiting from another firm’s R&D effort before innovation. (Martin S. 2000, p. 25) Uncertainty There are three kinds of uncertainty, which differ according to what sort of thing the performer is uncertain about: truth uncertainty, semantic uncertainty and ontological uncertainty.
They may not be temporally or contextually mutually exclusive: multi-temporality and pluri-temporality imply that performers might confront all three in the same action context. The main point is that all three play fundamental, though different, functions in innovation process. (Lane, Maxfield; 2003, p. 4) In case of truth uncertainty, the uncertainty is whether well-defined propositions are true or not. This is the only uncertainty that Savage’s decision theory admits, where the propositions in question are statements about future consequences.
Savage’s decision theory (Savage, 1954) asserts that the truth uncertainty for all such propositions can be calculated in the probability scale. Others continue with Knight’s distinction between risk and uncertainty: probability of propositions about risk can be calculated by reference to a sequence of fungible propositions with recognized truth-values: while others, “truly” uncertain, submit to events that have no such reference set and hence, according to Knight (1921), their truth uncertainty cannot be measured through probability.
For De Finetti (1930), the dissimilarity is different: propositions whose truth conditions are observable are based on probability, otherwise they are not. (Lane, Maxfield; 2003 p. 9) In semantic uncertainty, the uncertainty is about what a proposition means. There are many scenarios in which semantic uncertainty can arise, but by far the most important is when, in discursive interactions among the participants, one of them feels that the other participant interprets a different meaning to some term, phrase, or event than what he means.
In other words, it is ambiguities through interpretation of the context of use of words with multiple meanings. (Lane, Maxfield; 2003,p. 9) This type of discoveries are very important in innovation also because they may open up for analysis the ideas and acknowledgments that the participants had previously taken as aspects of reality rather than “just” their interpretations. With this, the participants can jointly construct new meanings. Generating new meanings is an important part of innovation. The definition of ontological uncertainty (Lane, Maxfield; 2003, p. 10) depends upon the concept of participants’ ontology – their beliefs about
The types of entities inhabit their world The types of interactions these entities can have among themselves Change due to interactions in the entities and their interaction modes Since structure at all levels is dynamic, what counts to participants as an entity, is dependent on the time-scale of the processes through which they think their actions will produce results. Participants place the fallacy of time-independent ontology when these processes take place over different time-scales than those in which posited entities demonstrate the requisite stable structure to count as entities.
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Our Services
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
Essays
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admissions
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Reviews
Editing Support
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
Reviews
Revision Support
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.