Blue Sky 3 - Poster Gallery

1. Frontier measurement in
science, technology and innovation
Jürgen Janger, Agnes Kügler, Andreas Reinstaller,
Fabian Unterlass
juergen.janger@wifo.ac.at, agnes.kuegler@wifo.ac.at
Contribution
Several strands of the innovation and growth
literature use the notion technological or inno-
vation frontier for performance assessment of
countries and for policy recommendations as a
function of the distance to these frontiers. We
show that these concepts and measures are not
easily interchangeable and build a consistent
framework for the measurement of the scientic,
technological, innovation and economic frontier,
which helps in building indicators and propos-
ing sound policies. We suggest three new in-
dicators for the measurement of the innovation
frontier.
Methodology
We survey the literature using the concept of
frontiers and their measurements. We build a
consistent conceptual framework which synthe-
sises the literature, drawing on the concept of
input-output frameworks. We suggest a combi-
nation of known and novel indicators to mea-
sure the frontiers. Eq. 1 yields the indicator
on upgrading in terms of knowledge intensity
(BERD corrected for industrial structure).
RDi =
N
j=1
RDjwi,j +
N
j=1
(RDi,j − RDjwi,j)
(1)
We construct latent variables through factor
analysis to show countries' position on the fron-
tiers. A cluster analysis groups countries by
their similarity in terms of distance to the fron-
tiers. We examine the robustness by showing
sectoral heterogeneity of our measures.
Conclusion
1. The US cannot simply be assumed to be
the leading country in STI anymore.
2. The technological frontier (as measured
through patents) is not identical to the
economic frontier (as measured by pro-
ductivity), with implications for further
research, indicators and policy advice.
3. Organisation of production in global value
chains distorts innovation frontier indi-
cators which are based on shares of
knowledge-intensive industries or exports
in the economy. These indicators need to
be complemented by indicators for struc-
tural upgrading, showing the position of
countries on dierent segments of the
quality ladder of industries.
References
[1] [2] [3] [4]
[1] Philippe Aghion and Peter Howitt. Joseph Schum-
peter Lecture Appropriate Growth Policy: A Unify-
ing Framework. Journal of the European Economic
Association, 4(2-3):269314, April 2006.
[2] Jerey L. Furman, Michael E. Porter, and Scott
Stern. The determinants of national innovative ca-
pacity. Research policy, 31(6):899933, 2002.
[3] Jürgen Janger, Torben Schubert, Christian Ram-
mer, Petra Andries, and Machteld Hoskens. Struc-
tural change and upgrading as two dimensions of
innovation outcomes. Sevilla, 2015.
[4] Andreas Reinstaller. Measuring complexity of coun-
tries and commodities exploring the network of trade
ows. Short-term Industrial Outlook, January 2013.
Acknowledgements
Funded by the Austrian Ministry for Transport, Infras-
tructure and Technology; research assistance: Kathrin
Hranyai, Peter Reschenhofer, Anna Strauss.
Framework for frontier measurement
We conceptualise frontiers as the highest scale-normalised level of capability to...
• expand the limits of scientic knowledge (scientic frontier)
• produce inventions and innovations (technological frontier)
• turn innovations into economic benets, e.g. value added generated by new products (inno-
vation frontier)
• transform economic inputs into economic output (economic frontier)
These frontiers inuence each other, but non-STI factors also play a role.
Figure 1: Frontier framework
Illustration using novel indicators
We use the following indicators for OECD Member Countries:
Science Quantity and quality of publications
Technology Quantity and quality of patents
Innovation 1 Structural change and upgrading (new: export quality ladder and BERD corrected
for industrial structure)
Innovation 2 Country sophistication (new: product-space indicator, complexity literature)
Economy TFP, Labour productivity, GDP per capita
Fig. 2 juxtaposes our technological and our economic frontier. The latter is calculated as in much
of the growth literature, which calls it technological frontier, assuming it to reect technological
capabilities. The graphs show that countries fare very dierently in the technological and economic
domains, making clear that using productivity or GDP as a proxy for technology is misleading.
Figure 2: Technological frontier (left); Economic frontier (right)
Fig. 3 shows OECD countries clustered by their distance to the frontiers. Further research will
address convergence, drivers of the innovation frontier and secular stagnation.
Figure 3: Country groups by distance to the frontier