Innovative entrepreneurship is an important driver of regional economic development. According to the Knowledge Spillover Theory of Entrepreneurship (KSTE), universities contribute directly to innovative entrepreneurship by conducting state-of-the-art research and educating talent. A key assumption of the KSTE is that human interactions play a pivotal role in transferring knowledge from universities to entrepreneurship, implying that educating students on research topics provides an indirect route for knowledge to spill over into innovative entrepreneurship. Yet this mechanism has not been tested at the level of knowledge specificity where such human interactions actually occur. In this paper, we introduce topics as a novel level of analysis to examine these processes empirically. We define topics as knowledge organized around a coherent theme or problem orientation, making them understandable, transmittable, and usable across institutional contexts through human interaction. Using this topic-level approach, we answer the following question: What is the direct and indirect influence of the amount of university research and education on the level of regional innovative entrepreneurial activity on a topic?We apply Latent Dirichlet Allocation to different documents to extract the amount of educational, research, and entrepreneurial activity per topic in two university regions in the Netherlands. We then connect these activities on a topic through a series of regression models. Our results show that education on a topic has a strong direct effect and largely mediates the positive effect of research on innovative entrepreneurial activity on that topic. Our results further suggest that spillovers to innovative entrepreneurial activity mostly take place within topics rather than between them. Finally, we find evidence that research on related topics can pull talent away from innovative entrepreneurship on a topic. In practical terms, our results suggest that education on state-of-the-art research topics is an important mechanism for promoting innovative entrepreneurship.
Technology-forcing regulations can compel incumbent firms to develop capabilities in technologies that lie outside their established knowledge bases. We examine how firms respond to this challenge by reconfiguring the geography and organization of invention. Focusing on the automotive industry's transition toward low-emissions technologies, we investigate whether more stringent environmental policies increase incumbent firms' reliance on technological hotspots—locations with specialized knowledge in low-emissions vehicle technologies. We examine two mechanisms through which firms can access this geographically concentrated knowledge: locating inventive activity in hotspots and collaborating with hotspot inventors. Using a comprehensive panel dataset covering more than half a million patent families from incumbent automotive manufacturers and their first-tier suppliers across 311 regions from 1990 to 2020, we find that technology-forcing regulation increases firms' propensity both to locate invention in low-emissions technology hotspots and to collaborate with inventors located there. These findings reveal an important spatial dimension of technology-forcing policy: by increasing firms' need to access specialized knowledge, regulation can reshape not only the direction of technological change but also where and with whom incumbent firms innovate.
The European Union has adopted the concept of Open Strategic Autonomy (OSA) to reduce strategic dependencies while preserving openness to international trade. An important policy question is therefore which countries are best positioned to develop new trade advantages in strategic products. Building on the literature on relatedness and export diversification, we address this question by complementing the standard notion of product distance, measuring how close a country is to a product compared to other countries, and how close a product is to a country's productive structure compared to other products. We term these concepts absolute and relative distance advantages. We argue that relative distance advantages reflect countries' incentives to diversify into a product, whereas absolute distance advantages capture their ability to successfully develop new trade advantage in that product. Using trade data for EU countries, we show that both dimensions significantly predict the emergence of new export specializations in products identified by the EU as strategic.
By strategically leveraging public procurement, governments can harness market competition to drive business innovation and sustainable development. It remains unclear, however, how this premise is affected by heightened security awareness due to increasing geopolitical tensions. Focusing on European Union (EU) member states, we examine how security-oriented practices in public procurement affect tender outcomes. Using data from a recent pan-European survey of 1613 procurement projects, coupled with data from the EU's tender platform Tender Electronic Daily, we test the effect of using national security assessments (NSAs) during tender preparation on competition, innovation, sustainability, and critical technology procurement. We find that conducting such assessments has positive effects on innovation and on critical technology procurement, but only for tenders won by domestic suppliers. NSAs can thus create urgency and mobilize resources to innovate through public procurement, but possibly in a way that reinforces national rather than EU-wide technological development. We identify a tension between the need for research and coordination of NSA development at the EU level to avoid market distortions arising from uncontrolled NSA proliferation versus a heightened bureaucratic burden for suppliers. We also argue that stimulating joint cross-border innovation procurement, particularly of critical technologies, is key to fully leveraging the benefits of the EU internal market when pursuing strategic policy goals.
