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International Knowledge Spillovers in the Wind Power Industry – Evidence from Europe

Jonas A Grafstrom Luleå University of Technology

Financial support from the Söderberg Foundation and the Swedish Research Council Formas is gratefully acknowledged.

Knowledge Spillovers

Spillover has its origins in 1890, where the English economist Alfred Marshall developed a theory of knowledge spillovers. Knowledge spillovers later were extended by economists Kenneth Arrow (1962) and Paul Romer (1986).

A knowledge spillover is a non-rival knowledge market externality that has a spillover effect of stimulating technological improvements in a neighbor through one's own innovation.

Problem: When there are knowledge spillovers firms (and possibly counties) tend to underinvest in R&D since the full value cannot be kept

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Background and purpose 1(3)

• Global energy demand has risen with an increasing rate in the past decade and is predicted to continue do so.

World energy consumption 1990-2040Source: IEA energy outlook 2013

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Background and purpose 2(3)

• Renewable energy can be a solution where the increased energy demand are meet with an increased supply of renewables.

• Previous research indicates that the cost of renewable energy falls as the usage of technology expands.

050

0010

000

1500

020

000

2500

0C

AP

1990 1995 2000 2005 2010Year

Denmark FranceGermany ItalyNetherlands SpainSweden UK

Source: http://www.ieawind.org/ annual reports

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Background and purpose 3(3)

• Less is however known about to what extent renewable energy technology knowledge spills over from the original source to new geographic areas.

• The purpose is to analyze the effect invention efforts and policies have on the rate of inventions in neighboring countries wind power technology production.

• Inventions refers to a unique or novel device, method, composition or process.

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Approach 1(3) • Patent count to measure

inventions. Focus on accumulation of knowledge stocks in neighboring countries.

• Patents granted at the European Patent Office.

• 8 core wind power countries in Western Europe countries between 1978 and 2008.

F03D

A01B A23L A61B B01D B21D B26B B41N B61B B65B C03B C08G C12C C23F D06N E04D F02D F16F F23J F28D G01S G06G G21C H02H H05F0

500

1000

1500

2000

2500

3000

F03D

Wind Sector

IPC Subclass

Num

ber o

f rec

ords

Source: Correspondentens with Peter Keefe Patent Examiner Patent Informatics Analyst. UK Patent office.

F03D- Wind Motors This subclass covers wind motors, i.e. mechanisms for converting the energy of natural wind into useful mechanical power, and the transmission of such power to its point of use.

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Development of wind patent activity0

2040

60G

rant

ed P

aten

ts

Denmark FranceGermany ItalyNetherlands SpainSweden UK

Number of patents in wind power technology field F03D between 1978 and 2008 for sample countriesSource: OECD (2011).

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Approach 2(3)

• Count data modeling techniques- Negative binomial regression (overdispersion)

The model is used to estimate the number of occurrences of an event, knowledge production j in country n:

Where stands for inventions in technology j (wind power) in time t, H stands for knowledge production inputs and K is different knowledge stocks available to researchers in a country.

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Approach 3(3)

Knowledge stocks

• Where is the knowledge stock in period t which is determined by the number of patents taken in that period, , plus the previously existing stock, , times a depreciation rate (15)

• International knowledge stock in area F03D (Perpetual Inventory Method).

• Distance weighted stock of knowledge.• International stock in related fields.

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Econometric Results

The results suggests that: There seems to be no cross border knowledge

spillovers between the countries in the dataset. (A weak negative effect was found)

Did not change after distance weight. Similar results were obtained for the related industry

stock. Public R&D schemes are invention promoting. The number of researchers in the labor force are

invention promoting.

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Conclusion

• A large development effort in one country does not seem to spill over on the other countries.

• Most European countries does not stand on the shoulders of giants – they rather look at the giants.

• Building up know-how helps to do further research.

• Need to further investigate if it is the case that some countries take a non-research strategy, and is that a problem?

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Contact information

Jonas GrafströmLuleå University of Technology

Economics UnitSE-971 87 Luleå, Sweden

Email: Jonas.Grafstrom@LTU.se

Thank you very much for your attention

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Table 1: The general structure of the IPC System

Subdivision The construction of the IPC codes

Symbol Title

Section F Mechanical engineering; lighting; heating; weapons; blasting

Subsection F0 Engines or pumps

Class F03

Machines or engines for liquids; wind, spring or weight motors; producing mechanical power or a reactive propulsive thrust, not otherwise provided

for

Subclass F03D Wind Motors This subclass covers wind motors, i.e. mechanisms for converting the energy of natural wind into useful mechanical power, and the transmission of such power to its point of use.

Main group F03D 1/00 Wind motors with rotation axis substantially in wind direction (controlling F03D 7/00)

Subgroup F03D 7/00 7 / 00 Controlling wind motors

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Field IPC Classes Except for wind technology IPC Class

Energy machinery

 

B23F, F01B, F01C, F01D, F03B, F03C, F03D, F03G, F04B, F04C, F04D, F15B, F16C, F16D, F16F, F16H, F16K, F16M, F23R

F03D