Innovation and Knowledge Diffusion

What are the causes and sources of innovation? What are the channels of knowledge spillovers between firms, industries and nations? The aim of this project is to understand the role and importance of innovation processes on firm performance, to examine novel user-driven innovation and development processes and to assess the size and effect of international knowledge spillovers.

For example, the economics profession has long acknowledged the fact the exports and foreign investment activities by multinational firms from Europe and North America do emit substantial knowledge and technology spillovers to say China. Can this hurt firms and consumers in the countries of origin? First results of the project indicate that domestic R&D activities can in fact be "lost" due to international knowledge spillovers – and that this is happening at a scale where it may eventually harm domestic producers.

Another aspect studied within this project are decentralized innovation processes as exemplified in Open Source Software such as Linux, where a global net of computer programmers conducts essential R&D services and innovation free of charge and at marketable quality. This innovation model is based on speedy and efficient knowledge diffusion. Understanding how these structures emerge and what drives individual contributor motives is the closest we can get to laboratory experiments on global innovation.

Finally, the project aims to identify contributing factors for high innovation performance in firms. As the roles within the global value chain are re-allocated, mature economies compete to become knowledge leaders. The factors that determine the success and failure in this race are of key importance to understanding the positioning of Danish firms in the global economy.


Contact person:

Associate Professor
Valdemar Smith