Fox School of Business Professor Dr. Ram Mudambi and his team of researchers received a prestigious grant from the National Science Foundation (NSF) to host the First International Business, Economic Geography and Innovation (iBEGIN) Conference at the Fox School. It was preceded by workshops in 2013 and 2014.
The two-day conference, held Nov. 13-14 at Fox’s Alter Hall, was sponsored by the NSF, with support from Temple’s Center for International Business Education and Research (CIBER) and the Fox School Institute for Global Management Studies. It was aimed, Mudambi said, toward using research from his team’s iBEGIN initiatives as the foundation for a long-lasting research community focused on the intersection of the three fields of international business, economic geography, and technology/innovation studies.
“In a very deep sense, all society is based upon human connections. We’re social animals,” said Mudambi, the Frank M. Speakman Professor of Strategic Management and Perelman Senior Research Fellow at Fox. “This conference applied that theory to the sphere, and business and economics. We developed the concept that the human experience is built on human socialization, and use it to understand how connections across space create value.”
The conference featured three keynote speakers, who addressed attendees Nov. 14 in an open-to-the-public setting. The keynotes included:
- Dr. John Cantwell, Rutgers University, Distinguished Professor of Management and Global Business, and editor-in-chief of the Journal of International Business Studies
- Dr. Harald Bathelt, University of Toronto, Canada Research Chair Professor in Innovation and Governance, and editor of Journal of Economic Geography
- Dr. Mark Lorenzen, Copenhagen Business School, Professor of Innovation and Organizational Economics, and Director of the Danish Research Unit of Industrial Dynamics (DRUID)
“These three keynote speakers have been great supporters of our iBEGIN work, and I could not have been more delighted to host them,” Mudambi said. “John is the editor of the top international business journal, Harald is the editor of the top economic geography journal, and Mark is the director of DRUID, one of the world’s largest research networks in innovation studies. To have them under one roof at one conference was a truly unique opportunity.”
The iBEGIN Conference is being promoted as part of GlobalPhilly 2015, a two-month international exposition, featuring events geared toward the promotion of international arts, commerce, education, heritage, and more in Philadelphia. Mudambi said papers were submitted to the conference from all over the world, including from: Denmark, France, Italy, Japan, Korea, Spain, Sweden, the United Kingdom, the United States government, the United States Federal Reserve, and more.
Mudambi’s ongoing iBEGIN initiative is a collaborative effort with professionals in centers around the world, including: Denmark’s Copenhagen Business School, Italy’s Politecnico di Milano and University of Venice Ca Foscari, the Indian School of Business, Henley Business School at the University of Reading (UK), and many others.
The next research project on the horizon for Mudambi and his globally dispersed research team involves battery power, a progression of yet another long-running iBEGIN segment on renewable energy and sustainability. The team has documented the important role that emerging economies like China and India are playing in the innovative landscape of the wind turbine industry, but batteries are the key to unlocking the potential of these renewable energy technologies.
“Batteries are the steam engine of our age,” Mudambi said. “We have ways to produce energy, but we have no way to harness it and store it. Today, if we had to run our planet on stored battery power, we could run perhaps 1 percent of our power applications. Imagine if you could run the whole planet on batteries. It’s a problem that, once solved, will revolutionize society.”
–Christopher A. Vito
Innovation in the United States is not lacking. It’s just that patents are being registered in less-likely locales, according to researchers from Temple University’s Fox School of Business.
The findings are part of an ongoing research initiative spearheaded by Dr. Ram Mudambi, the Frank M. Speakman Professor of Strategic Management.
The umbrella project is dubbed iBEGIN, or International Business, Economic Geography and Innovation. A segment of the project explores innovation hubs in the United States, undertaking detailed analyses of more than 900 metropolitan areas in the U.S. In one of the first published outcomes of this research effort, Mudambi and his team examined the evolution of Detroit, a mainstay of the global automotive industry for over a century. While Detroit, a downtrodden city, continues to experience manufacturing decline, it is doing well as an innovation center, he said.
“The beauty of innovation is that it never stops,” Mudambi said. “In 1960, the U.S. was the richest country in the world, and Detroit was its richest city. And while the city has been in a continuous state of decline, we found that Detroit’s innovation numbers are very healthy.”
iBEGIN researchers define innovation through patent output, and they say Detroit’s patent output since 1975 has grown at a rate of almost twice the U.S. average. Detroit’s innovative resilience, Mudambi said, is due to its continuing centrality in global innovation networks in the automotive industry. It has maintained this centrality through connectedness to other worldwide centers of excellence in this industry, such as Germany and Japan. Its innovative links to Germany have been rising steadily over the last three decades, while its association with Japan began more recently, but also shows a steep upward trajectory.
Their research also unearthed a clearer picture of the shifting lines of American innovation. Today, Mudambi said, the Sun Belt features the country’s leading innovation hubs like San Francisco; Seattle; Portland, Ore.; Raleigh, N.C.; and Austin, Texas. Though the more traditional centers of innovation excellence in the Rust Belt cities have generally maintained healthy rates of innovation output, they have seen their shares of national innovative output decline. These include cities like New York, Philadelphia, Baltimore, and Chicago.
“In the 19th century and for most of the 20th century, the innovation hotspots were co-located with centers of manufacturing mass production,” Mudambi said. “These were concentrated in the Northeast, the Mid-Atlantic and the Midwest. That’s not the case anymore. We’re seeing the lion’s share of patents being registered in regions dominated by high-knowledge industries. These industries create mainly white-collar positions for people with a bachelor’s degree, at minimum.
“However, what Detroit’s innovative success says about economies everywhere is that the roots of innovation are very deep. Policymakers spend a lot of time worrying about manufacturing. But manufacturing can be very ephemeral and firms often relocate manufacturing plants with very little notice. Innovation is more deeply rooted and, once an innovation center roots itself in an area, it’s much more likely to stick.”
Mudambi said the ongoing iBEGIN research initiative is a collaborative effort, with professionals in centers around the world, including: Denmark’s Copenhagen Business School, Italy’s Politecnico di Milano and University of Venice Ca Foscari, the Indian School of Business, and many others.
In addition to studying innovation in American cities, iBEGIN has ongoing research exploring other contexts. These include country contexts like China, India, Brazil, Portugal, Greece and Korea as well as specialized industry contexts like automobiles, renewable energy and pharmaceuticals.
The city of Philadelphia has reason to be proud: It outpaces the nation as a whole in terms of innovation connectedness. About 9 percent of patents with at least one Philadelphia-based inventor are internationally connected, compared to approximately 7 percent of patents with inventors in the United States overall. However, there is also some bad news: Philadelphia’s share of all U.S. innovative activity has dropped by half in 35 years.
A research team led by Professor of Strategic Management Ram Mudambi at Temple University’s Fox School of Business analyzed patents in the United States from 1975 to 2010 and extracted relevant data from more than 7 million observations to analyze innovation trends in the United States. To map out where inventors are located, the research team looked at all 917 geographical areas that make up the country, as defined by the U.S. Office of Management and Budget.
The top six foreign locations of inventors collaborating with Philadelphia-based colleagues are the United Kingdom, Germany, Canada, France, Japan and China, which has risen to prominence only in recent years.
Industries represented by Philadelphia-based innovative activity include chemicals, computer and communications, drugs and medical, electrical and electronics, as well as mechanical industries.
Philadelphia is the seventh-largest core based statistical area (CBSA) in the United States, and the city has a long history of innovative activity commensurate with its population size.
However, Philadelphia ranks 34th of the top 35 CBSAs in terms of growth of number of local inventors from 1975 to 2010.
Although the growth of local inventors is low, “our inventors are more connected, which is good news,“ Mudambi said. “They also collaborate with networks of inventors that are overall more internationally dispersed.”
Despite the growing trends in connectedness and total patenting that Philadelphia has experienced over the past 35 years, the share of Philadelphia’s CBSA patents as a percentage of U.S. patents has fallen from about 4.8 percent in 1975 to about 2.1 percent in 2010. In other words, Philadelphia is becoming a much smaller contributor in the national production of knowledge.
The team also noticed another worrying trend between Philadelphia and its traditional knowledge partners, such as the United Kingdom, Germany and Japan. Over a 30-year period, the number of inventors who collaborated with Philadelphia from the United Kingdom dipped from about 125 inventors to 40. Inventors from Japan and Germany also dropped by more than half. These drops could be due to the relocation of research-and-development activities by pharmaceutical and chemical firms – some of the Philadelphia region’s traditional innovative sectors.
However, there has been an increase in collaboration with China. Over two years, from 2005 to 2007, inventors from China collaborating with Philadelphia rose from about 18 to 130.
“China’s come in this huge way recently,” Mudambi said. “So we wanted to know, why China? We did a little digging and found there’s one company that accounts for much of this connectedness: Metrologic.”
Metrologic Instruments is an automated identification and data-capture company based in Blackwood, N.J. (part of the Philadelphia CBSA). The company makes barcode scanners that are used in retailing, healthcare, postal services, logistics services and other industry verticals. By operating in a variety of verticals, Metrologic innovates in a way that is resilient to shifts in the economic fortunes of individual sectors.
Metrologic holds 446 patents, with 3,189 participating inventor locations. Honeywell acquired it in 2008. According to Mudambi and his team, Metrologic represents about 70 percent of the Philadelphia CBSA’s connectedness to China.
Metrologic is one of the reasons why Philadelphia surpasses the United States in terms of innovation connectedness. Philadelphia-based inventors also collaborate with South American countries (Colombia and Chile), Africa (Botswana and Madagascar), as well as Sweden, Turkey, Syria and Australia.
“Mapping the innovative connections of inventor networks gives us a picture of the dependence and linkages of a location in terms of other locations, industries and individuals,” Mudambi said.