The outbreak of the Coronavirus has caused a sudden and pervasive lockdown of vital activities in the Norwegian society. A key question that we address in this project is: what happens to research and innovation activities in the Norwegian business sector during this crisis? Understanding the response to economic shocks can help elaborating R&D and innovation policies.
Indeed, there is general consensus in the scholarly literature that companies engaging in R&D and innovation should be better at weathering economic downturns and even turning crises to new opportunities. This is also a core rationale for public support to business R&D and innovation. But companies are hit and respond differently to sudden downturns. The current crisis provides a unique opportunity to explore general hypotheses empirically and thereby provide valuable insight for companies and authorities that seek to find the right measures and strategies to manoeuvre through the crisis.
We assume that innovation is needed to cope with a pandemic crisis. We acknowledge that many roads to innovation exist, and we want to check which of these roads are best suited for driving the economy out of the crisis. The project addresses two main sets of research questions:
1) Which firms are able to cope with a pandemic crisis? Are they innovative and in what respect? And are there firms that thrive under a pandemic crisis?
2) How is the innovation landscape of a country reshaped by a pandemic crisis? And how is the country's innovation potential affected?
During its first year, the project has addressed these questions from two main perspectives. The first perspective was concerned with at describing how the innovation landscape of Norway looked just before the onset of the crisis. We have therefore conducted a novel analysis of the data contained in the in 2018 Innovation Survey and we have identified eleven recurrent patterns of innovation, that is eleven typical ways in which Norwegian firms pursue innovation through their activities. Every firm in Norway adopts one or more of these innovation patterns. This analysis sets the basis for our current work: we check which innovation paths have made Norwegian firms more resilient to the crisis.
A second perspective concerns employment: we have analysed data about previous crises (financial crisis of 2008 and oil price crises of 2014) and we have found that the relative contribution by young firms to total employment in Norway typically increases immediately after a crisis hits the country. A next step in this perspective will be to track workers that have changed jobs during the pandemic crisis: some skills may have found novel use in different industrial sectors.
The final step of the project will exploit the new availability of data, from the 2020 Innovation Survey to describe how the innovation landscape has changed in Norway following the pandemic crisis and whether some approaches to innovation have become more common.
The project aims at understanding the role of firm-level innovation in promoting economic resilience to pandemic crises. The project bases upon the scientific literature on evolutionary economics and innovation studies, using concepts like adaptation and selection for understanding, in real time, the consequences of a pandemic crisis on a national economy. Empirically, the country under study will be Norway: by analysing a wide array of historical data, a clear picture of the innovation patterns of Norwegian firms will be described. To this purpose, a taxonomy of firms, built from firm-level and employee-level data, will be used to categorize Norwegian firms according to their research, development and innovation patterns. The project will then dig into real-time information on crisis-related bankruptcies and on policy measures aimed at struggling enterprises, in order to understand which parts of the innovation landacape of Norway, as represented by the firm-level innovation categories outlined above, seem to be most resilient to the crises. A main assumption of the project is that different innovation patterns could lead to crisis resilience. Finally, an update of a comprehensive firm survey on R&D and innovation will allow to investigate how the innovation landscape itself is going to change during and following the pandemic crisis.