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EconChange: Micro-Foundations of Organisational and Institutional Changes in Europe, ECONCHANGE, Final Report, EUR 23126

Project ID: HPSE-CT-2002-00146


The project has focused on some of the key organisational changes that are taking place with the advent of the "knowledge-based" economy. Specifically, the main objective of the project has been to provide an analytical contribution to understand the microfoundations of this new phase of economic growth that appears to depend on organisational changes to the way production and innovation are organised and financed. This implies an important division of labor that can happen either by separating tasks technically, geographically or organizationally. In turn, this implies that technologies can be disembodied from products, allowing the emergence of markets where technologies can be traded. These issues and the implications for the innovation process have been addressed by studying issues such as licensing, the geographic interaction of the innovation process, Silicon valley models and the case of open source software. Apart from changes in the innovations process, important changes in the production itself is being witnessed. The effects on entry and exit of new firms are first analyzed, to later move to the role of large corporations, complemented by the analysis of strategies of small and medium firms, the cumulative nature of innovation and skill-biased technical progress. The analysis is completed by describing the changing pattern of agglomeration of economic activities, and its implications for trade and productivity. New financial instruments and markets have emerged and the role of spin-offs and Initial Public Offerings have to be studied carefully. Finally the institutional setup is important, both from the point of view of intellectual property rights as well as from the political and regulatory environment. Overall, the picture emerging from this project shows important changes in the production and innovation process.

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