Productivity and Innovation

[field_auth], 24 July 2016

‘Defensive medicine’ refers to doctors performing excessive tests and procedures because of concerns about potential malpractice liability. Advocates for reform of the liability system typically argue that this raises healthcare costs with few expected benefits for patients. This column explores how tort reform laws designed to curb defensive medicine affect innovation in medical devices. US states that introduce such laws see a reduction in medical device patenting, suggesting that high liabilities actually encourage innovation.

[field_auth], 15 July 2016

The health effects of pollution in terms of hospitalisations, mortality and morbidity are well researched, but not so much is known about the less severe effects of pollution on workers’ health. This column uses evidence from China to analyse the impact of pollution on productivity, finding that high levels of pollution reduce the productivity even of indoor workers. Reducing pollution is not just welfare-improving for society, it is also of financial benefit to the economy.

[field_auth], 10 July 2016

The service sector accounts for much of the output of many advanced economies, and maximising the sector’s output while also minimising regional disparities is an important policy challenge. This column analyses productivity in service sectors in Japan, focusing on economies of urban density. The higher the employment density of the cities in which service firms are located, the higher their productivity, but firms relocating to such cities negatively impacts regional disparity. Further, considerable differences in productivity improvements among sectors indicate there certain industries should be promoted in large cities, and others in smaller cities with lower employment density.

[field_auth], 08 July 2016

Local public technology centres (Kosetsushi) in Japan have demonstrated notable success in fostering the development of regional industries. This column reports the results of the first branch-level survey of Kosetsushi, focusing on three areas: manufacturing, foods, and design. Kosetsushi are found to help clients through diverse, tailored technical consultations and, increasingly, by acting as a network hub for the transfer of symbolic and analytical knowledge. These findings have particular relevance for regional governments attempting to foster innovation through similar institutions.

[field_auth], 08 July 2016

European countries are increasingly coordinating their national research and development policies. However, supra-national R&D programmes entail problems from a governance standpoint. This column discusses the problem of cross-subsidisation between participating countries. European joint programming initiatives are usually designed to avoid international transfer payments. Empirical evidence suggests that doing so comes at the price of decreased efficiency. 

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