Empirically Led Internationalisation of S3 an Investigation Based on Micro-Data for the Country of Slovenia
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Empirically Led Internationalisation of S3 An Investigation Based on Micro-Data for the Country of Slovenia Prof. Ronald B. Davies, Prof. Dieter F. Kogler & Prof. Riccardo Crescenzi March – 2020 EUROPEAN COMMISSION Directorate-General for Regional and Urban Policy Directorate E – Administrative Capacity Building and Programmes Implementation II Unit E.3 — Bulgaria, Croatia, Slovenia Contact: Gregor Cufer E-mail: [email protected] [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION Empirically Led Internationalisation of S3 An Investigation Based on Micro-Data for the Country of Slovenia Directorate-General for Regional and Urban Policy 2021 EN Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). Manuscript completed in June 2019 Revised edition March 2020 The European Commission is not liable for any consequence stemming from the reuse of this publication. Luxembourg: Publications Office of the European Union, 2021 ISBN 978-92-76-31370-0 doi: 10.2776/090604 © European Union, 2021 Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, p. 39). ACKNOWLEDGEMENTS: The authors of this report would like to acknowledge the excellent research support provided by Sebastiano Comotti, Oliver Harman, Changjun Lee and Adam Whittle. Invaluable input and helpful comments were provided by Gregor Čufer and Peter Wostner. The authors remain responsible for all errors. Empirically Led Internationalisation of S3 Table of Contents Executive Summary……………………………………………………………………………………………………………11 1 The Slovenian Knowledge, Product & Occupation Space ....................... 16 1.1 Invention and Innovation ............................................................ 16 1.2 Smart Specialisation – Domain & Connectedness ........................... 16 1.3 The Knowledge Space Methodology .............................................. 17 1.4 Measuring Knowledge Production and Diffusion – Patent Data .......... 18 2 Knowledge Production in Slovenia ..................................................... 20 2.1 Slovenia – Inventor Collaborations ............................................... 24 2.2 Entities producing technological knowledge in Slovenia ................... 26 3 The Evolution of the Slovenian Knowledge Space [2001-2015] ............. 29 3.1 Changing Patterns of Technological Knowledge Production in Slovenia ........................................................................................... 32 3.2 Technology Structure and Trends in the pan-European and Slovenian Knowledge Space ............................................................................... 36 3.3 Technological Knowledge Indices and the Position of Slovenia in the EU28+2 ............................................................................................ 40 3.3.1 Technological Entropy ............................................................. 41 3.3.2 Technological Relatedness ....................................................... 43 3.3.3 Recombinant Knowledge Production .......................................... 44 3.4 Technological Relatedness Density Scores ..................................... 46 4 Technological Industry and Occupation Profile ..................................... 50 4.1 Technological Skills and Occupation Profile .................................... 52 4.2 Concluding Remarks ................................................................... 56 5 Tax Policy and the Location of FDI ..................................................... 57 5.1 Estimation and Data ................................................................... 58 5.2 Results ..................................................................................... 64 5.2.1 Baseline Estimates .................................................................. 65 5.2.2 Sector Differences .................................................................. 67 5.2.3 Heterogenous Tax Effects ........................................................ 68 5.2.4 R&D Policies ........................................................................... 70 5.3 Conclusion ................................................................................ 71 6 Slovenia and Global Value Chains ...................................................... 72 6.1 The GVC Box and Data ............................................................... 72 6.2 Slovenian Exports ...................................................................... 74 6.3 Slovenian FDI ............................................................................ 78 6.4 Conclusion ................................................................................ 85 5 7 The Technological Content of Slovenian Trade .................................... 85 7.1 Data and Results ........................................................................ 85 7.2 Conclusion ................................................................................ 87 8 Upgrading through Global Value Chains (GVCs) and Global Investment Flows (GIFs) ........................................................................................ 88 8.1 Slovenia in the international economy: opportunities and challenges for upgrading ......................................................................................... 90 8.2 What upgrading is all about and what it means for Slovenia ............ 91 8.2.1 The Role of the Multinational Enterprise (MNE) – The Lead Firm ... 93 8.2.2 The Role of Global Investment Flows (GIFs) ............................... 93 8.3 How to upgrade effectively through Global Investment Flows and Global Value Chains ........................................................................... 95 8.4 Channels through which Global Investments Flows and Global Value Chains influence innovation and technological development .................... 97 8.4.1 Effective internationalisation and the role of GVCs ...................... 97 8.4.2 Building GVCs through GIFs ..................................................... 97 8.4.3 Embedding GVCs through GIFs ................................................. 98 8.4.4 Reshaping GVCs through GIFs .................................................. 98 8.4.5 Practical examples of policy for effective internationalisation ........ 99 9 The position of Slovenia in Global Investment Flows and Global Value Chains ................................................................................................ 100 9.1 The position of Slovenia in Global Investment Flows: greenfield investments and M&A ........................................................................ 100 9.1.1 Greenfield investment ............................................................ 100 9.1.2 Mergers & Acquisitions ........................................................... 102 9.2 The Geography of greenfield investments and M&A ....................... 104 9.2.1 The global geography of greenfield investment flows – macro regions ......................................................................................... 104 9.2.2 The global geography of greenfield investment flows – national dimension of origins and destinations ............................................... 106 9.2.3 The global geography of M&As – macro-regions ........................ 108 9.2.4 The global geography of M&As – national ................................. 110 9.3 Sectors, Functions and GVCs ...................................................... 111 9.4 Global investment flows and patenting by sector ........................... 116 9.5 Greenfield investment flows by GVC stage .................................... 118 9.6 M&As by GVC stage ................................................................... 119 9.7 Upgrading through Research & Development ................................ 121 9.7.1 Greenfield investment in R&D ................................................. 121 9.7.2 M&A in R&D .......................................................................... 122 9.8 A network analysis perspective on Slovenia’s GIFs ........................ 123 Empirically Led Internationalisation of S3 9.8.1 Network composition over time ............................................... 123 9.8.2 Network composition by GVC stage .......................................... 124 9.8.3 FDI Network composition by sector . Error! Bookmark not defined. 9.9 Conclusion and policy discussion ................................................. 125 ANNEXES…………………………………………………………………………………………………………148 7 Figures Figure 1. The Knowledge Space Methodology .......................................... 18 Figure 2. Example of a European Patent Office (EPO) patent document ...... 20 Figure 3. Number of unique Slovenian inventors by period; incl. EU28+2 share .................................................................................................. 24 Figure 4. Share of Slovenian (local) and non-Slovenian (EU30/International) inventors listed on patents that contain at least one Slovenian inventor....... 24 Figure 5. Share of Slovenian (local) and non-Slovenian (EU30/International) inventors listed on patents that contain at least one Slovenian inventor....... 24 Figure 6. National, EU28+2 and International inventor collaborations ........