Convenors: Marco Capasso, Erik Fjærli, Eric J. Iversen, Marina Rybalka, Tore Sandven and Espen Solberg.
Session type: Speed talk session.
The outbreak of the Coronavirus has caused a sudden and pervasive lockdown of vital activities. Large parts of the economy have been affected, and many companies have struggled. At the same time, some companies find new opportunities and even prosper in times of economic turmoil and uncertainty. There is general consensus in the scholarly literature that companies engaging in R&D and innovation should be better at weathering economic downturns and even turning crises to new opportunities. This is also a core rationale for public support to business R&D and innovation. But countries, sectors and companies are respond differently to downturns.
Archibugi, Filippetti, and Frenz (2013) have shown that the economic downturn following the 2007-2008 financial crisis has overall reduced the firms’ expenditures for innovation. However, the reaction has been heterogenous across different typologies of innovating firms. In other words, crises seem to allow the simultaneous presence of both creative destruction and creative accumulation, labelled by Freeman, Clark, and Soete (1982) as Schumpeterian models “Mark I” and “Mark II”. Supported by a strong and diverse theoretical framework (Dosi, Marsili, Orsenigo & Salvatore, 1995; Nelson & Winter, 1982), innovation is one of the usual suspects in defining differences in performance (and especially sustained performance) among firms.
In case of an economic crisis, firms that face financial constraints are most likely to suffer economically given their higher vulnerability to an adverse economic climate. As a result, firms may reduce their R&D investments or even go bankrupt. This is especially the case for SMEs (Zecchini 2012). Hence, one could expect that availability of relevant public R&D support tools is crucial for those firms to maintain their innovative activities. The effectiveness of R&D supporting policies is continuously under investigation. However, the knowledge on the impacts of such policies in the situation of economic crises is still limited.
Archibugi, D., Filippetti, A., & Frenz, M. (2013). Economic crisis and innovation: is destruction prevailing over accumulation? Research Policy, 42(2), 303-314.
Zecchini, S. (2012): OECD Countries’ Policy Approach to the SME Crisis in the Recent Recession (eds. G. Calcagnini and I. Faveretto). Springer Verlag, Berlin-Heidelberg, 17–40.Dosi, G., Marsili, O., Orsenigo, L., & Salvatore, R. (1995). Learning, market selection and the evolution of industrial structures. Small business economics, 7(6), 411-436.
Freeman, C., Clark, J., & Soete, L. (1982). Unemployment and technical innovation: a study of long waves and economic development: Burns & Oates.
Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.