, 600 1, 800 2, 000 2003 2005 2007 2009 2010 (est) 2011 2012 (est) €ms Current costs Capital costs 10
2003 as shown in Figure 6. Capital BERD expenditure totalled €253 million in 2011 falling from a peak of €326 million in 2009
These gains are primarily due to the efficiencies of ICT capital, as well as associated complementarities and spillovers.
or a combination of workers and physical capital. Using hours of work or the amount of workers as the denominator yields labor productivity (the measure used in this report unless otherwise specified),
while using the combination of workers, physical capital, and other inputs as the denominator yields total factor productivity (TFP;
when using only workers and physical capital). Productivity is the main determinant of national income per person,
Studies in the early 2000s found that investment in ICT capital increased productivity by three to eight times more than investment in non-ICT capital. 43 Likewise,
Wilson finds that of all types of capital, only computers, communications equipment, and software are associated positively with multi-factor productivity. 44 Hitt
other capital. First, in economies where ICT capital equipment innovations are new, they are able to pick off the low hanging fruit of relatively easy to improve efficiencies.
ICT capital contributed 0. 53 percentage points to the average annual GDP growth rate in the United states and 0. 56 percentage points in the United kingdom,
which includes labor composition, ICT capital, and TFP, increased in the UK from 2 percentage points to 2. 3 percentage points of overall growth after 1997.54 Goodridge et al. find sectors that contributed most to value-added growth in the UK between 2000 and 2009 invested most heavily in ICT
capital. 55 In Finland, Mairesse, Rouvinen, and Ylä-Anttila find that ICT contributed significantly to non-ICT-sector productivity growth between 1994 and 2007.56 On a firm level,
even though European countries invested more overall in fixed capital than the United states. Figure 9) In other words, while Europe invests more overall,
However, the United states has maintained much higher levels of investment in ICT as a share of fixed capital investment since the 1990s.86 (Figure 10) Moreover,
Scale Economies Two additional reasons European firms lag in their investment in ICT capital are related to scale.
and the authors attribute nearly half of the U s.-EU productivity differential over 1995-2005 to this organizational capital.
The Contribution of Heterogeneous Capital to Productivity (working paper no. 13, Federal reserve bank of San francisco, 2004), 13.45.
World Development Indicators (Gross Fixed Capital Formation as percentage of GDP; The Conference Board, Total Economy Database:
Hubert Strauss and Besik Samkharadze, ICT Capital and Productivity Growth, EIB Papers 16, no. 2 (2011): 8 28.
World bank, World Development Indicators (Gross Fixed Capital Formation%GDP; accessed April 10, 2014). 94. See Raquel Ortega-Argilés, The Transatlantic Productivity Gap:
Strauss and Samkharadze, ICT Capital and Productivity Growth. 96. OECD, Science, Technology and Industry Scoreboard 2013 (Chapter 2:
Harry Deangelo and Ronald W. Masulis, Optimal Capital Structure Under Corporate and Personal Taxation, Journal of Financial Economics 8, no.
Gurbaxani, Vijay,"The demand for IT capital: an empirical analysis,"Decision Support systems 8, no. 5 december 1992): 387 403.
Jonathan Temple and Hans-Joachim Voth, Human capital, equipment investment, and industrialization, European Economic Review 42, no. 7 (1998): 1343 62;
It provides a measure for the supply of human capital of that age group and for the output of education systems in terms of graduates.
It provides a measure for the supply of human capital of that age group and for the output of education systems in terms of graduates.
Capital may be used to finance increased production capacity market or product development, and/or provide additional working capital.
Replacement capital is defined as purchase of existing shares in a company from another private equity investment organisation
It provides a measure for the supply of human capital of that age group and for the output of education systems in terms of graduates.
log of distance between two the capitals of each pair of countries; dummy variable controlling for common language;
and design libraries to encourage common shared intellectual capital as a general basis for innovation in Europe has advantages for innovators and governments.
and financial capital were to be found. Besides Luxembourg, tax credits are available in most other Member States for investment in R&d (European commission,
with large amounts of capital (in the hundreds of millions of Euros) becoming available for medium high-risk ventures from the sovereign wealth funds typically from the Middle east,
While angel investors can seed start-ups, innovative companies of this type in need of sustained capital investment over many years.
Although the Apple Macintosh did break new ground (with its injection of intellectual capital from Xerox PARC) it still relied on supply of the latest technologies from outside Apple (for its bit-mapped screen
Financial capital, Intellectual capital, Human capital, Cultural capital. In Figure 1, we present six phases marking the development path of a start-up company.
This also shows the four key innovation inputs financial capital, intellectual capital, human capital and cultural capital as a table, below the phases of development.
For example, financial capital at the critical"Valley of Death"could be funded by a VC a corporate VC (CVC), a state-owned or partially owned VC and an institution providing grants such as the US, UK or Dutch SBIR.
Inputs to the innovation process 34 At the Valley of Death stage, intellectual capital which has been created in the two previous phases now forms the basis of production,
Thus in the human capital required in this phase, two teams are now often necessary an R&d team that can take a prototype and turn it into a marketable offering and a team for industrial operations.
The cultural capital, of risk acceptance, becomes even more important at this stage, as the growth in human capital expands the workforce, perhaps many times, yet the level of risk due to the need for more funding capital,
and the uncertainty of market success, is perhaps greater than during the two earlier stages,
Financial capital Venture capital The traditional sources for company financing of long term innovative investment are: Retained earnings;
small and new innovative firms experience high costs of capital that are mitigated only partly by the presence of venture capital;
evidence for high costs of R&d capital for large firms is mixed, although these firms do prefer internal funds for financing these investments;
The capital comes from various financial assets stocks bonds, or other financial instruments, property, often from traded commodities, especially oil.
http://www. thecityuk. com/research/our-work/reports-list/sovereign-wealth-funds-2012/37 Sovereign funds can spur entrepreneurial activity owing to their abundant capital resources and long-term outlook
Note that support may be offered either in finance or in intellectual capital by transfer of IPR.
Intellectual capital In many of the companies studied, intellectual property issues were important in different ways and to different degrees for each sub-sector.
but so has open intellectual 38 capital. It is only over the past decade that IPR questions have become a paramount factor in the ICT industry generally, for Apple, for instance,
One model for generating intellectual capital in ICTS has been around for the past 25 years in collective development of intellectual capital.
The traditional route to innovation and its intellectual capital implies that a company innovates on its own.
Human capital Many of our case studies highlight the critical importance of human capital in innovation.
While an innovative business needs human capital of these different kinds during its growth, our case studies strongly suggest that it is the most highly skilled individuals who are fundamental to innovation.
and thus to human capital, is intensified further by the cluster effect of networks of related skills around key academic and research institutions (Bercovitz, et al, 2006).
But there has to be a critical mass of human capital for this process of interchange of people between companies to work.
and long-term investment in human capital people and their networks the USA began such clustering over 70 years ago for military purposes and so accumulated rich banks of human capital.
and create anew the intellectual capital that the cluster embodies. Moreover the cluster stays alive through encouraging
This multiplies the supply of human capital as confidence is gained in this system for work and new funding
Cultural capital Mobility Most typically in Silicon valley, there is a predominant attitude among the highly skilled
the cultural capital consists of the inherited cultures of the environment and the team. This is why a past failure is considered valuable in Silicon valley.
The lessons of VINNOVA's funding instruments and the Robotdalen case study shows that the use of‘smart capital,
Its first manufacturing plant in Europe, in the capital of the federal state of Saxony, Dresden, was sited at the heart of the German electronics industry sometimes called"Silicon Saxony".
But there has to be a critical mass of human capital for this process of interchange of people between companies to work.
backed by its pools of human capital. The recommendation that Europe needs greater support for academic and public sector centres of excellence for R&d with commercial applications is supported by the literature.
Start-up capital was US$1300. Its thirst for innovation and with it, the discarding of conventional market and technical wisdom, was apparent from start-up,
Apple. 59 Apple grew at the very first on its own capital, possible at that time when the cost of entry was so small.
-and-the-challenge-of-1000-blooming-flowers/65 Capital investment Google received about $1miilion in angel investment around the time it incorporated in September 1998, from Andy Bechtolsheim (cofounder of Sun microsystems) Ram Shiram
with major investors including the venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.
The 1. 3 million shares were sold to Burda by Cinco Capital, the investment vehicle owned by Lars Hinrichs,
In July 1999, the company secured new equity funding of $16 million from Kelso Investment Associates and Hillman Capital, both based in New york. This transaction transferred the ultimate parent
The manufacturing plant in Europe, in the capital of the federal state of Saxony, Dresden, is at the heart of the German electronics industry-sometimes called"Silicon Saxony".
and was a cofounder of the VC company Amadeus Capital Partners in Cambridge. Even without a clear business plan
Led by Oak Investment Partners and Tudor Investment, the existing investors Amadeus (seed funding) Intel Capital, Bank of america,
and Merifin Capital also participated. While R&d remained in Cambridge, product development moved to Mountain view, CA, with the corporate headquarters.
On 14 may 2003, Novaled Gmbh secured €5. 75 million in first round financing from a consortium of international investors led by venture capital firms Technostart and Techfund 83 Capital Europe.
and organic with no external funding the original seed capital came from the founder Geoff Pegman.
web farms requires the largest capital investment Simon Forge SCF Associates Ltd All rights reserved 2012 1 Deploy,
In addition, some outputs of innovation include the enhancement in human capital and new organisational structures.
as they allow companies to obtain large amounts of financing for various developments by contributing only a limited amount of their own capital.
almost 2/3 of the researchers are work in the capital. It is remarkable, that in the eastern counties the number of corporate sector research units are 15%higher than in the western ones. 18 21 11 28 12 13 21 25 55
the free movement of people, goods, services and capital. The Commission regularly updates its Single Market strategy
In particular, GIF1 provides seed capital which means financing provided to study, assess and develop an initial concept.
Moreover, start capital is made available under GIF1. This is capital provided for product development and initial marketing of start-up companies or companies that yet exist
but nonetheless still have to launch their product or service commercially. For GIF2, the EIF invests in specialised risk capital funds
which in turn provide equity (the share capital of a company) to innovative SMES that are in their expansion stage. www. access2finance. eu/en/Attachments/List of deals 23 12 2010. pdf. 26 27 (B). SME Guarantee Facility
Its initial capital rises up to 50 million euros. It is financed by the EIB and potential partner banks.
and Limerick City as its capital, will realise its potential as a gateway region both nationally and internationally.
of Phd level graduates Number of patent applications Number of entrepreneurs/start-ups/spin outs supported with capital from private sources in the region through the investor forum.
2011.20 The UN E-government Development Index is a composite benchmarking indicator based on a direct assessment of the state of national online services, telecommunication infrastructure and human capital in all countries.
http://data. worldbank. org/about/country-classifications/country-and-lending-groups. 31 Household incomes include wages, salaries, self employment incomes, capital and property income,
but outside the capital 19 days later. The circles represent the numbers of people who were displaced.
Operational Program Competitiveness Human Capital Administration CEF EAFRD egovernment and Interoperability X X x Cloud computing and Social media X X x ICT In Education
%internet subscribers in fixed line and%broadband subscribers) the index of human capital (generated depending on the education level noticed on adults and%of school enrolments).
ICT has become an important means of enriching the‘creative capital'growth and the ability of competing globally.
In capital, the percentage of those aged between 16-74 years and who used the internet for shopping in 2011 was of 14,
and health care fund, obtaining the capital certificate on the capital deposited) Very High Number of new businesses launched in:
National Trade Register Office Page 138 of 170 the law provides authorizations before the registration 4. Changing on the decrease of the share capital
or assignment of shares 4. 1 The resolution of the shareholders/partners/resolution of the sole shareholder to increase the share capital
and these data also show a high degree of R&d centralization in the capital. 23 Figure19:
knowledge-based capital and development play a key role. Intangible assets, innovation, intellectual property and human resources are the elements in
and higher education institutions and undertakings at Union level, increasing the social capital of the national institutions and exploitation of opportunities for cooperation with internationally renowned institutions.
Within the financial instruments, the various capital programmes are becoming increasingly important and enable the companies engaged in research and development to obtain, among other things, seed or venture capital investments.
Targeted state support is particularly important in the capital and credit markets where there are market failures. 5. 2. 4. Funding principles Application of types of intervention instruments adjusted to the target area Compared to the period between 2007 and 2013,
KTIA CCHOP Increasing knowledge capital In the framework of smart specialization, specializing the profiles of the research institutes, higher education institutions, clinics, health care research institutions and research hospitals, building of the knowledge triangle,
KTIA HFOP 76 including also the related processing Capital market instruments Thematic priority Policy measures, investment priorities Specific objective Financing fund Operational programme Strengthening research
and specialize, it mobilizes private sector capital for R&d investments32, a change of approach starts among the young Hungarian people about entrepreneurship,
or the UK's Big Society Capital fund and India's Inclusive Investment Fund. They combine investments in new hardware
and Assessment Model to assess the social capital and wellbeing of local areas. What is measured?
Some small firms with leading-edge technologies and/or unique products and an on-line presence have received substantial capital from larger firms (Sakai, 2002.
Moreover, it indicates that ICT may help reduce inefficiency in the use of capital and labour, e g. by reducing inventories,
67 4. 3. 2 Access to capital for SMES...69 4. 3. 3 Domain names...69 4. 3. 4 Net neutrality...
. 2 Access to capital for SMES Small and Medium Sized Enterprises (SMES) play an important role in fostering growth and innovation and this holds in particular for the online services market.
however, not sufficiently developed in Europe as they encounter significant difficulties in raising capital abroad
reduced risk as others put their human capital to work on risky propositions; and accelerated time-to-market as innovation is freed from the shackles of the cumbersome large-company financial,
the authors Opening the boundaries of a company by incorporating knowledge generated by customers, suppliers, education institutions, consulting agencies leads to intellectual capital development through knowledge sharing.
Southwestern Cengage Learning. 2. Brunold, J. and Durst, S. 2012)" Intellectual capital risks and job rotation",Journal of Intellectual Capital, Vol. 13 (2), pp. 178
Huuskonen elaborates the Intellectual Property rights (IPR) and intellectual capital in open ecosystems from a sharing and collaborative ecosystem perspective.
collective and distributed thinking about societal change, real challenges, contributing relevant support, building renewal capital.'
Renewal capital can only be built by having a better understanding of the overall challenge the processes involved, the diverse projects in progress and the proposed, targeting joint actions based on that.
the basis for building Europe's renewal capital will be laid. R E g I O N A l I N N O V A t I O N,
With small steps and bold steps that we can develop the renewal capital that Europe calls for,
The main objective of such funds is to invest equity capital to university technology companies and speedup commercialisation processes within universities.
Apart from capital e g. seed capital, investors provide in-house co-working spaces and additional O P E N I N N O V A t I O N 2. 0:
and competition for the ultimate goal of attracting talent, knowledge, capital for wealth creation and quality of life.
References (1) Cabrita, M. R. and Cabrita, C.,2010, The Role of Creative Industries in Stimulating Intellectual Capital in Cities and Regions, Proceedings of the European Conference on Intellectual Capital
A Portuguese Case, Proceedings of the European Conference on Intellectual Capital, 350-358.5) Donald, B.,2001 Economic competitiveness and quality of life in city regions:
Capital Model Applied to Cities, Proceedings of the European Conference on Intellectual Capital: 17-25.9) Thite, M..2011.
Reversed innovation pyramid 4 Will this model be the way towards an effective citizens'engagement in the Open Innovation 2. 0 process, by leveraging societal capital as a vital factor for maximum impact?
and collaboration with citizens will contribute to societal capital. References (1) Illustration of Future City, The Smart Day Group,(2014).(2) M. Curley and B. Salmelin.‘
In her article, Lin discusses the aftermath of the financial crisis in the light of the excellent work done on knowledge capital, structural intellectual capital and the effects on national competitiveness.
Policy measures from different parts of the world are set in context of increasing intellectual capital.
1 4 In the article there are good references to a wider set of studies targeting the major OECD countries (Organisation for Economic Co-operation and Development) regarding intellectual capital and competitiveness.
Silos will be replaced with creative commons, shared societal capital, and the systematic harvesting of experimental results.
OI2 focuses on creating increased social capital, enabling broader boundary spanning and the creation of new activation triggers for innovation options.
including societal capital, creative commons, and communities.##3: Innovation Ecosystem Orchestration and Management Innovation has moved out of the lab and into an ecosystem that crosses organizational boundaries.
and help channel private capital into regional smart specialisation niches. The RIS3 approach also maintains that through application of horizontal forms of multilevel Figure 2:
It raised capital from outside investors such as Microsoft, which chipped in $42m. Rovio now has 500 employees in Finland
and capital between the networks and to interlink them will exponentially enrich each and every player including those at the very peripheries.
and will bring far-fetching results in terms of growth, development of human and social capital, and quality jobs.
and Ireland (2). It is our deep belief that national intellectual capital, albeit intangible, can provide valuable insights for searching a national benchmark as well as for future risk control.
When businesses ran short of capital, their daily operations were affected, including production stoppage and shedding off excessive manpower.
In addition, tangible (GDP per capita ppp) and intangible (national intellectual capital, NIC) co-development also provide some clues for future national development.
and financial capital (19). NIC is the sum of the above capitals. National human capital is the competencies of individuals in realising national goals,
market capital represents a country's capabilities to meet the needs of its international clients,
process capital comprises mainly a country's infrastructure, and renewal capital refers to a nation's capability for innovation that sustains a nation's competitive advantage (19).
Figure 3 to Figure 7 show the co-development path of GDP-NIC,-NHC,-NMC,-NPC,
and-NRC of Australia and Chile from 1995 to 2010. The figures also indicate the relative position of the two countries in a 59-country landscape,
In other words, less developed countries with lower GDP may have better market capital than more advanced countries.
For example, Chile has better market capital than Australia. Figure 6 is the co-development of GDPNPC,
That is, Australia has an overall progress in renewal capital, despite some backward development, whereas Chile was stagnant in renewal capital over the long period from 1995 to 2010.
Figure 3 to Figure 7 present the co-development patterns of national tangible and intangible assets for Australia and Chile over 16 years (1995 2010.
E A r B o O k 2 0 1 4 declining process capital in recent years (Figure 6) is another sign for attention.
In addition to the country's pledged educational reform to increase human capital and reduce poverty special attention needs to be paid to its low renewal capital.
Chile needs to have higher degree of national renewal capital in order to achieve its goal of having per capita income of the OECD average (US$26, 000) by the end of this decade.
-Injected US$ 500 million in fresh capital into the state bank to provide credit to small and medium-sized companies.
9780691142166 (2) Lin, C. Y. Y.,Edvinsson, L. 2011) National Intellectual Capital: A comparison of 40 countries.
C. Y. Y.,Edvinsson, L. 2013) National Intellectual Capital in Israel and Financial crisis Impact, International Journal of Knowledge Based Development, 4 (3). 245 273.
stakeholding individuals can themselves be seen as contributing‘value creation capital'with different kinds of contributions in an (innovation) ecosystem of value creation.
Note that community capacity is rooted in the meshwork of human capital social capital, and organisational resources that is resident within and outside of that community,
which can be leveraged to develop solutions to collective issues and thereby maintain and enhance the wellbeing of that community (14).
9. Building new strategic capital for enterprises; and 10. Expanding wealth-welfare-wellbeing. Figure 2:
which is regarded also as the Capital of Northern Scandinavia, is located in Northern Finland (Figure 3). This article presents the Oulu open innovation and Public-Private-People-Partnership approach.
While crowdfunding is a powerful mechanism for entrepreneurs to raise capital to finance their idea or project
It is one of the most promising resources for restoring capital to businesses, defined as the collective effort of individuals who network and pool their resources, usually via the Internet,
and SME's to solicit capital from investors, using social networks and crowdfunding platforms to finance their businesses and projects.
to access capital or to gain access to knowledge and skills. And they are operating within fastresponding supply networks to deliver customer value.
Their relational capital is crucial in explaining their success as innovators. Devan Chemicals, Quilts of Denmark,
The benefits and cost of relational capital. Relational capital plays a central role in developing an open innovation based business model.
The competitive strength of the SMES is no longer (only) related to its internal competencies, but also) to its network of relationships.
and Allee, V. 2008), Value network analysis and value conversion of tangible and intangible assets, Journal of Intellectual Capital, 9, 1, 5-24.34 Gilmore, J. H and B
) Itincludesallactivitiesto acquire andmaintainconnectionswithexternalsourcesof social capital, includingindividualsandorganizations. As such, itcomprisesbothformalcollaborativeprojectsand more generalandinformalnetworkingactivities. Networks allow enterprisestorapidlyfillinspecificknowledgeneeds withouthavingtospendenormousamountsoftimeand money todevelopthatknowledgeinternallyoracquireit through verticalintegration.
Entry and Exit when Markets Under and Over Shoot H200808 2-7-2008 Entrepreneurial Career Capital, Innovation and New Venture Export Orientation H200807 24-6-2008
) Itincludesallactivitiesto acquire andmaintainconnectionswithexternalsourcesof social capital, includingindividualsandorganizations. As such, itcomprisesbothformalcollaborativeprojectsand more generalandinformalnetworkingactivities. Networks allow enterprisestorapidlyfillinspecificknowledgeneeds withouthavingtospendenormousamountsoftimeand money todevelopthatknowledgeinternallyoracquireit through verticalintegration.
Their relational capital is crucial in explaining their success as innovators. Devan Chemicals, Quilts of Denmark,
The benefits and cost of relational capital. Relational capital plays a central role in developing an open innovation based business model.
The competitive strength of the SMES is no longer (only) related to its internal competencies, but also) to its network of relationships.
and Allee, V. 2008), Value network analysis and value conversion of tangible and intangible assets, Journal of Intellectual Capital, 9, 1, 5-24.34 Gilmore, J. H and B
the deepening of ICT capital and the increase in total factor productivity originated from the production of ICT goods. O'Mahony
Spillovers from publicly financed R&d capital in high tech industries. International Journal of Industrial Organization, 17 (2), 215 239.
Quantifying the impact of ICT capital on output growth: A heterogeneous dynamic panel approach. Economica, 72 (No 288), 615 633.
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