Young Leading Innovators and the EU's R&D Intensity Gap

Posted: 15 Dec 2012

See all articles by Michele Cincera

Michele Cincera

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics; Centre for Economic Policy Research (CEPR)

Date Written: August 28, 2012

Abstract

Europe’s innovation gap relative to the US is often attributed to its industrial structure in which new firms do not play a significant role, especially in high-tech sectors. This view of a structural EU innovation deficit is popular in European innovation policy discussions, but has received little or no thorough empirical investigation. This paper aims to address this ‘evidence gap’. Using industrial R&D Scoreboard data from leading world innovators, we find that compared to the US, the EU has fewer young firms among its leading innovators. Using a decomposition analysis, we show that having fewer young firms accounts for about one third of the EU-US differential in R&D intensity, while fifty five percent of the differential is due to the fact that young leading innovators in the EU are less R&D intensive than their US counterparts. Further analysis shows that this is almost entirely due to a different sectoral composition. We thus confirm that the EU-US private R&D gap is indeed mostly a structural issue.

Keywords: dynamics of firms, age of firms, EU-US R&D gap

JEL Classification: O32

Suggested Citation

Cincera, Michele and Veugelers, Reinhilde, Young Leading Innovators and the EU's R&D Intensity Gap (August 28, 2012). Available at SSRN: https://ssrn.com/abstract=2189399

Michele Cincera (Contact Author)

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management ( email )

42 Av Franklin Roosevelt
1050
Brussels
Belgium
+3226504151 (Phone)
+3226504305 (Fax)

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 32 6908 (Phone)
+32 16 32 6732 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Abstract Views
148
PlumX Metrics