Specialisation, diversification and the ladder of green technology development

[EN] This paper elaborates an empirical analysis of the temporal and geographical distribution of green technology, and on how specific country characteristics enable or thwart environmental inventive activities. Using patent data on 63 countries over the period 1971-2012 we identify key drivers of cross-country diversification and specialisation. Our first finding is that countries diversify towards green technologies that are related to their existing competences. Notably, the degree of green technology maturity matters more than a country's level of development. The second main result is that countries move along cumulative paths of specialisation, and towards more mature green technologies. Interestingly, the complexity of green technologies is not an obstacle to further specialisation. This holds also for developing countries that are most exposed to climate change hazardsWe are indebted to the editor and two anonymous referees for constructive feedback. DC acknowledges the financial support of Consejo Superior de Investigaciones Cientificas (CSIC) "Ayuda de Incorporacion para Cientificos Titulares" (OEP2014) and of the Ministerio de Economia Industria y Competitividad "Programa Estatal de I+D+i Orientada a los Retos de la Sociedad, 2017" (ECO201786976R). FP acknowledges the financial support of European H2020 Project RISIS2 (grant agreement n degrees 824091). All errors and omissions are our own.Perruchas, FDX.; Consoli, D.; Barbieri, N. (2020). Specialisation, diversification and the ladder of green technology development. Research Policy. 49(3):1-12. https://doi.org/10.1016/j.respol.2020.103922112493Adner, R., & Kapoor, R. (2015). Innovation ecosystems and the pace of substitution: Re-examining technology S-curves. Strategic Management Journal, 37(4), 625-648. doi:10.1002/smj.2363Atkinson, A. B., & Stiglitz, J. E. (1969). A New View of Technological Change. The Economic Journal, 79(315), 573. doi:10.2307/2230384Ayres, R. U., & van den Bergh, J. C. J. M. (2005). A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms. Ecological Economics, 55(1), 96-118. doi:10.1016/j.ecolecon.2004.07.023Balland, P.-A., & Rigby, D. (2016). The Geography of Complex Knowledge. Economic Geography, 93(1), 1-23. doi:10.1080/00130095.2016.1205947Barbieri, N., & Consoli, D. (2019). Regional diversification and green employment in US metropolitan areas. Research Policy, 48(3), 693-705. doi:10.1016/j.respol.2018.11.001Barbieri, N., Ghisetti, C., Gilli, M., Marin, G., & Nicolli, F. (2016). A SURVEY OF THE LITERATURE ON ENVIRONMENTAL INNOVATION BASED ON MAIN PATH ANALYSIS. Journal of Economic Surveys, 30(3), 596-623. doi:10.1111/joes.12149Bathiany, S., Dakos, V., Scheffer, M., & Lenton, T. M. (2018). Climate models predict increasing temperature variability in poor countries. Science Advances, 4(5). doi:10.1126/sciadv.aar5809Calel, R., & Dechezleprêtre, A. (2016). Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market. Review of Economics and Statistics, 98(1), 173-191. doi:10.1162/rest_a_00470Castaldi, C., Frenken, K., & Los, B. (2014). Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of US State-Level Patenting. Regional Studies, 49(5), 767-781. doi:10.1080/00343404.2014.940305Chang, S.-H., & Fan, C.-Y. (2016). Identification of the technology life cycle of telematics: A patent-based analytical perspective. Technological Forecasting and Social Change, 105, 1-10. doi:10.1016/j.techfore.2016.01.023Chatterjee, S., & Wernerfelt, B. (1991). The link between resources and type of diversification: Theory and evidence. Strategic Management Journal, 12(1), 33-48. doi:10.1002/smj.4250120104Cohen, W. M., & Levinthal, D. A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1), 128. doi:10.2307/2393553Costantini, V., & Mazzanti, M. (2012). On the green and innovative side of trade competitiveness? The impact of environmental policies and innovation on EU exports. Research Policy, 41(1), 132-153. doi:10.1016/j.respol.2011.08.004Cristelli, M., Gabrielli, A., Tacchella, A., Caldarelli, G., & Pietronero, L. (2013). Measuring the Intangibles: A Metrics for the Economic Complexity of Countries and Products. PLoS ONE, 8(8), e70726. doi:10.1371/journal.pone.0070726Fankhauser, S., Bowen, A., Calel, R., Dechezleprêtre, A., Grover, D., Rydge, J., & Sato, M. (2013). Who will win the green race? In search of environmental competitiveness and innovation. Global Environmental Change, 23(5), 902-913. doi:10.1016/j.gloenvcha.2013.05.007Fischer, C., & Newell, R. G. (2008). Environmental and technology policies for climate mitigation. Journal of Environmental Economics and Management, 55(2), 142-162. doi:10.1016/j.jeem.2007.11.001Fleurbaey, M. (2009). Beyond GDP: The Quest for a Measure of Social Welfare. Journal of Economic Literature, 47(4), 1029-1075. doi:10.1257/jel.47.4.1029Frenken, K., & Boschma, R. A. (2007). A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process. Journal of Economic Geography, 7(5), 635-649. doi:10.1093/jeg/lbm018Frenken, K., Van Oort, F., & Verburg, T. (2007). Related Variety, Unrelated Variety and Regional Economic Growth. Regional Studies, 41(5), 685-697. doi:10.1080/00343400601120296Gagliardi, L., Marin, G., & Miriello, C. (2016). The greener the better? Job creation effects of environmentally-friendly technological change. Industrial and Corporate Change, 25(5), 779-807. doi:10.1093/icc/dtv054Gao, L., Porter, A. L., Wang, J., Fang, S., Zhang, X., Ma, T., … Huang, L. (2013). Technology life cycle analysis method based on patent documents. Technological Forecasting and Social Change, 80(3), 398-407. doi:10.1016/j.techfore.2012.10.003Ginarte, J. C., & Park, W. G. (1997). Determinants of patent rights: A cross-national study. Research Policy, 26(3), 283-301. doi:10.1016/s0048-7333(97)00022-xHaines, A. (2004). Health Effects of Climate Change. JAMA, 291(1), 99. doi:10.1001/jama.291.1.99Haupt, R., Kloyer, M., & Lange, M. (2007). Patent indicators for the technology life cycle development. Research Policy, 36(3), 387-398. doi:10.1016/j.respol.2006.12.004Hidalgo, C. A., & Hausmann, R. (2009). The building blocks of economic complexity. Proceedings of the National Academy of Sciences, 106(26), 10570-10575. doi:10.1073/pnas.0900943106Hidalgo, C. A., Klinger, B., Barabási, A.-L., & Hausmann, R. (2007). The Product Space Conditions the Development of Nations. Science, 317(5837), 482-487. doi:10.1126/science.1144581Jaffe, A. B., Newell, R. G., & Stavins, R. N. (2002). Environmental and Resource Economics, 22(1/2), 41-70. doi:10.1023/a:1015519401088Jaffe, A. B., Newell, R. G., & Stavins, R. N. (2005). A tale of two market failures: Technology and environmental policy. Ecological Economics, 54(2-3), 164-174. doi:10.1016/j.ecolecon.2004.12.027Johnstone, N., Haščič, I., Poirier, J., Hemar, M., & Michel, C. (2012). Environmental policy stringency and technological innovation: evidence from survey data and patent counts. Applied Economics, 44(17), 2157-2170. doi:10.1080/00036846.2011.560110Jurgilevich, A., Räsänen, A., Groundstroem, F., & Juhola, S. (2017). A systematic review of dynamics in climate risk and vulnerability assessments. Environmental Research Letters, 12(1), 013002. doi:10.1088/1748-9326/aa5508Lanjouw, J. O., & Mody, A. (1996). Innovation and the international diffusion of environmentally responsive technology. Research Policy, 25(4), 549-571. doi:10.1016/0048-7333(95)00853-5Lee, C., Cho, Y., Seol, H., & Park, Y. (2012). A stochastic patent citation analysis approach to assessing future technological impacts. Technological Forecasting and Social Change, 79(1), 16-29. doi:10.1016/j.techfore.2011.06.009Lee, C., Kim, J., Kwon, O., & Woo, H.-G. (2016). Stochastic technology life cycle analysis using multiple patent indicators. Technological Forecasting and Social Change, 106, 53-64. doi:10.1016/j.techfore.2016.01.024Marin, G. (2014). Do eco-innovations harm productivity growth through crowding out? Results of an extended CDM model for Italy. Research Policy, 43(2), 301-317. doi:10.1016/j.respol.2013.10.015McMichael, A. J., Woodruff, R. E., & Hales, S. (2006). Climate change and human health: present and future risks. The Lancet, 367(9513), 859-869. doi:10.1016/s0140-6736(06)68079-3MENDELSOHN, R., DINAR, A., & WILLIAMS, L. (2006). The distributional impact of climate change on rich and poor countries. Environment and Development Economics, 11(2), 159-178. doi:10.1017/s1355770x05002755Milliman, S. R., & Prince, R. (1989). Firm incentives to promote technological change in pollution control. Journal of Environmental Economics and Management, 17(3), 247-265. doi:10.1016/0095-0696(89)90019-3Neffke, F., Henning, M., & Boschma, R. (2011). How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions. Economic Geography, 87(3), 237-265. doi:10.1111/j.1944-8287.2011.01121.xNelson, R. R. (1959). The Simple Economics of Basic Scientific Research. Journal of Political Economy, 67(3), 297-306. doi:10.1086/258177NELSON, R. R. (1994). The Co-evolution of Technology, Industrial Structure, and Supporting Institutions. Industrial and Corporate Change, 3(1), 47-63. doi:10.1093/icc/3.1.47Nelson, R. R. (2008). What enables rapid economic progress: What are the needed institutions? Research Policy, 37(1), 1-11. doi:10.1016/j.respol.2007.10.008Nesta, L., Vona, F., & Nicolli, F. (2014). Environmental policies, competition and innovation in renewable energy. Journal of Environmental Economics and Management, 67(3), 396-411. doi:10.1016/j.jeem.2014.01.001Newell, R. G. (2010). The role of markets and policies in delivering innovation for climate change mitigation. Oxford Review of Economic Policy, 26(2), 253-269. doi:10.1093/oxrep/grq009Noailly, J., & Shestalova, V. (2017). Knowledge spillovers from renewable energy technologies: Lessons from patent citations. Environmental Innovation and Societal Transitions, 22, 1-14. doi:10.1016/j.eist.2016.07.004Patz, J. A., Campbell-Lendrum, D., Holloway, T., & Foley, J. A. (2005). Impact of regional climate change on human health. Nature, 438(7066), 310-317. doi:10.1038/nature04188Petralia, S., Balland, P.-A., & Morrison, A. (2017). Climbing the ladder of technological development. Research Policy, 46(5), 956-969. doi:10.1016/j.respol.2017.03.012Popp, D. (2002). Induced Innovation and Energy Prices. American Economic Review, 92(1), 160-180. doi:10.1257/000282802760015658Popp, D., Newell, R. G., & Jaffe, A. B. (2010). Energy, the Environment, and Technological Change. Handbook of the Economics of Innovation, 873-937. doi:10.1016/s0169-7218(10)02005-8Pugliese, E., Chiarotti, G. L., Zaccaria, A., & Pietronero, L. (2017). Complex Economies Have a Lateral Escape from the Poverty Trap. PLOS ONE, 12(1), e0168540. doi:10.1371/journal.pone.0168540Rammel, C., & van den Bergh, J. C. J. M. (2003). Evolutionary policies for sustainable development: adaptive flexibility and risk minimising. Ecological Economics, 47(2-3), 121-133. doi:10.1016/s0921-8009(03)00193-9Requate, T. (2005). Dynamic incentives by environmental policy instruments—a survey. Ecological Economics, 54(2-3), 175-195. doi:10.1016/j.ecolecon.2004.12.028Rigby, D. L., & Essletzbichler, J. (1997). Evolution, Process Variety, and Regional Trajectories of Technological Change in U.S. Manufacturing. Economic Geography, 73(3), 269. doi:10.2307/144484Romer, P. M. (1994). The Origins of Endogenous Growth. Journal of Economic Perspectives, 8(1), 3-22. doi:10.1257/jep.8.1.3Sarewitz, D., & Nelson, R. (2008). Three rules for technological fixes. Nature, 456(7224), 871-872. doi:10.1038/456871aSbardella, A., Perruchas, F., Napolitano, L., Barbieri, N., & Consoli, D. (2018). Green Technology Fitness. Entropy, 20(10), 776. doi:10.3390/e20100776Veugelers, R. (2012). Which policy instruments to induce clean innovating? Research Policy, 41(10), 1770-1778. doi:10.1016/j.respol.2012.06.012Vona, F., & Consoli, D. (2014). Innovation and skill dynamics: a life-cycle approach. Industrial and Corporate Change, 24(6), 1393-1415. doi:10.1093/icc/dtu028Weitzman, M. L. (1998). Recombinant Growth. The Quarterly Journal of Economics, 113(2), 331-360. doi:10.1162/00335539855559