Alexanders, Cuntz, Oldenberg Discussion in Economics, January 2014,

https://www.uni-oldenburg.de/fileadmin/user_upload/wire/fachgebiete/vwl/V-36314.pdf

Incentives cause innovation in the OSW sector

Our analysis investigates the impact of feed-in-tariffs on technological innovation

measured by patent counts in renewables. To the best of our knowledge, this paper
is the first to empirically establish the nexus between feed-in tariffs and innovation
in renewables under the EEG policy framework in Germany. Our results based on
regressions with a time-technology fixed effect negative binomial model cast doubts
on the innovation hypothesis of the EEG. Innovation impacts of feed-in tariffs under
the EEG are insignificant in the case of photovoltaic, wind and geothermal while the
coefficients show even significant negative innovation impacts in the case of
biomass and hydro technologies. The innovation impacts of renewable
promotion policies have been investigated in various empirical studies.
Johnstone et al. (2010) examine the effects of environmental policies on
technological innovations in renewable energy using a panel data set across 25
countries and across several sources of renewable energy. 1 They provide evidence
that the effectiveness of 1 These include wind, solar, ocean, geothermal, biomass,
and waste-to-energy. Furthermore, they conclude that broader market-based
regulation such as tradable green certificates are more likely to induce
innovation in renewable technologies which are close to competitive while
specific feed-in tariffs are needed to induce innovation in more costly
energy technologies such as solar power. They also find that renewablespecific public R&D spending is a significant determinant of innovation in
renewable energy overall, with its effects most noticeable for wind, solar
and geothermal technologies.
R&D Performance of the Major Pharmeutical companies is sup-Optimal:
Pipeline output is low and declining; Costs of R&D are rising rapidly, driven by larger
and more clinical studies and expensive new enabling technologies; Over-supply of
me-too launches and a lack of genuinely innovative drugs make it difficult to
replace revenues lost through patent expiration. Protracted clinical trials and
administrative procedures reduce the shelf life of patented products.
R&D expenditures account for a large share of the overall cost structure in the
Pharmaceutical industry.

A significant increase in productivity in pharmaceutical innovation is neeed in order

to close the windening productivity gap and to meet the high revenue growth
expecations of the industry. This seems like a tall order, given that most mature
industries have not grown by more than 1-2 percent over the past years. Only the
fastest growing economy has grown by more than 8% in the same period. In the
pharmaceutical industry, however, worldwide sales have grown at a historical
annual rate of 11.1 percent from 1970 until 2002. Today, these double-digit growth
rates are strictly incorporated into the industrys overall growth expectations. As a
success raises stakeholders expectations of further success, Pharmecutical

companies are forced primarily by investors and management to at least maintain

this growth rate