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Deregulation and R&D in Network Industries: The Case of the Electricity Industry

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  • Jamasb, T.
  • Pollitt, M.

Abstract

Electricity reform has coincided with a significant decline in energy R&D activities. Technical progress is crucial for tackling many energy and environmental issues as well as for long-term efficiency improvement. This paper reviews the industrial organisation literature on innovation to explore the causes of this decline, and shows that it was predicted by the pre-reform literature. More recent evidence endorses this conclusion. At the same time, R&D productivity and innovative output appear to have improved in both electric utilities and equipment suppliers, in line with general improvements in the operating efficiency of the sector. Despite this, a lasting decline in basic R&D and innovation input into basic research may negatively affect development of radical technological innovation in the long run. There is a need for reorientation of energy technology policies and spending toward more basic research, engaging more firms in R&D, encouraging collaborative research, and exploring public private partnerships.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0533.

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Length: 36
Date of creation: Aug 2005
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Handle: RePEc:cam:camdae:0533

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Web page: http://www.econ.cam.ac.uk/index.htm

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Keywords: innovation; R&D expenditure; electricity reform; regulation; ownership;

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Citations

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Cited by:
  1. Jamasb, Tooraj & Pollitt, Michael G., 2011. "Electricity sector liberalisation and innovation: An analysis of the UK's patenting activities," Research Policy, Elsevier, Elsevier, vol. 40(2), pages 309-324, March.
  2. Lionel Nesta & Francesco Vona & Francesco Nicolli, 2012. "Environmental policies, product market regulation and innovation in renewable energy," Documents de Travail de l'OFCE, Observatoire Francais des Conjonctures Economiques (OFCE) 2012-25, Observatoire Francais des Conjonctures Economiques (OFCE).
  3. Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, Elsevier, vol. 37(2), pages 377-386, February.

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