Market failure and policy solutionsMarketfailureRationale /OptionInstitutionMarketpowerCompetition policyNMa, OPTA-Strategic entry barriersLess regulationGovernment regulation-Institutional entrybarrierExternalEffectsR&D subsidies-KnowledgeSpilloversWBSO,InnovationtopicsandinnovationvouchersIntellectual property rightsPatents,copyrights,etc-NetworkexternalitiesCompetitionpolicy,demandGoveinmenfasproduceraggregationandTegulator(OPTA)Investmentin localPublic-private partnerships-AgglomerationeffectsinfrastructureAsymmetricInformation-Banksvs.companiesCredits,warrantiesInnovation credit,warrantyProviding informationSyntens,-CoordinationproblemsTechnischeUniversiteitTUCPB.2011EindhovenUniversity of TechnologyEconomicsofInnovation201310/24/2013PAGE10
Market failure and policy solutions Economics of Innovation 2013 10/24/2013 PAGE 10 CPB, 2011 Market failure Rationale / Option Institution Market power - Strategic entry barriers Competition policy NMa, OPTA - Institutional entry barrier Less regulation Government regulation External Effects - Knowledge Spillovers R&D subsidies Intellectual property rights WBSO, Innovation topics and innovation vouchers Patents, copyrights, etc. - Network externalities Competition policy, demand aggregation Government as producer and regulator (OPTA) - Agglomeration effects Investment in local infrastructure Public-private partnerships Asymmetric Information - Banks vs. companies Credits, warranties Innovation credit, warranty - Coordination problems Providing information Syntens,
Innovation policy tools: Supply-SideSupply-sideMeasuresServicesFinanceEquityFisealGrantsforInformationNetworkingSupport forSupport forpublic seetortnining&industrial&brokeragesupportmesuesmeasuresresearchR&DmobilitysupportPublieTailoredGrants forCorporationContactSupport forJniversitysaxcoursesforR&DdatabasesclubsventureSundingcapitalCollabor.ForesighttoreductionsfirmsBrokerageaboratoryfundsbuildforvolumeEntrepneniuativegrantseventsSundingMixedorship trainiegReimbursAdvisoryorincrementcommonCollaborutivesubsidisedinR&DSubsidisedableloansvisionsservicessrantsprivateReductionssccondmegtsPrizestoIntermationalCo-locationStrategicIndustrialapendontechnologyventureinemployersinR&Dfundspayrolltaxprogmmmesresearchwutehincubators,LosslorindustrandsocialstudentshipPatentSecienceunderwniaSupportforcontributionsSupport fordatabusesparksetecontrnetng andPersonal taxBenchmurkingrecrutmentresearchguaranteeincentivesof scicntistsEquipmentforR&DshaningworkersincentivesSource:EdlerandGeorghiou(2007)Technische UniversiteitTUEindhoveneUniversityofTechnologyEconomicsofInnovation2013
Innovation policy tools: SupplySide Source: Edler and Georghiou (2007) 10/24/2013 Economics of Innovation 2013 11