Prof. Hiroshi Ohashi (University of Tokyo)
- Datum: 08.05.2008
Ort: Raum 307, Schackstr. 4, III
Effects of User Innovation on Industry Growth: Evidence from Steel Refining Technology
This paper examines the economic impact of “user innovation” - innovations developed by users instead of technology manufacturers - on industry growth and productivity. The paper focuses on two innovations produced by a Japanese steel company; these innovations improved the productive efficiency of Austrian-made refining technology, namely, basic oxygen furnace (BOF). Results obtained from the plant-level production-function estimation indicate that user innovations account for approximately 40 percent of the total factor productivity of the BOF, substantially promoting the dissemination of the BOF technology. Our simulation analysis indeed reveals that user innovations contributed to steel output growth by more than 20 percent. This paper also documents that innovating Japanese companies played the role of a “lead user” in developing and disseminating their user innovations.