Defence of dissertation in the field of economics, Elina Berghäll M.Sc. (Econ.)

Essays on the Technology Frontier and Finnish Innovation Policy

Elina Berghäll M.Sc. (Econ.) defends her dissertation thesis “Essays on the Technology Frontier and Finnish Innovation Policy” on Friday, 13 November 2015 at 12 o’clock at the Aalto University School of Business, room Stora Enso H-324, Chydenia, Runeberginkatu 22-24, Helsinki.

The dissertation consists of five essays on the technology frontier, innovation policy and the Finnish information and communications technology (ICT) industry. Combined they challenge the claim that Finland's low investment level reflects a structural shift to innovation-based growth at the world technology frontier.  

Opponent: Research Professor Maria Kopsakangas-Savolainen, Finnish Environment Institute and University of Oulu

Custos: Professor Pertti Haaparanta

Contact information of the defendant:
Elina Berghäll
+358 40 304 5511
elina.berghall@vatt.fi

According to Elina Berghäll’s dissertation, innovation indeed raises efficiency in advanced economies, but less so in Finland. The relatively more significant roles played in catch-up of e.g., absorption capacities (education) and new ICT technologies may be due to the fact that Finnish industries are found to have lagged far behind the technology frontier on average. Even in the leading high-tech industry, i.e. ICT, R&D productivity impacts, whether measured by efficiency impacts of R&D intensity, technical change or the R&D elasticity of output were rather weak, in contrast to labour elasticity, firm size and scale elasticity. The dataset focuses on the 1990s and particularly the 1995– 2002 period when Finnish high technology experienced strong growth.

While Finnish innovation policy appears more able to integrate foreign-owned firms into the national innovation system, it may at the same time have helped foreign-owned firms to source superior Finnish technology in the ICT industry. Compared to Dutch firms, results find Finnish firms more willing to share proprietary knowledge with public R&D institutes, while the incoming knowledge spillovers from Finnish R&D institutes were the major motive for foreign-owned firms to cooperate with such institutes. During the ten-year period 1993–2002, the direction of spillovers appears to have run from Finnish ICT firms to their foreign counterparts. The small lead of Finnish ICT firms in terms of technical efficiency eroded towards the end of the period.

As for policy, the results imply that the emphasis should be placed on technological diffusion rather than innovation. Even if the technology frontier is reached in the future, innovation policy based on own innovation may not succeed in maintaining a lead.