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Electricity sector liberalisation and innovation: An analysis of the UK's patenting activities

  • Jamasb, Tooraj
  • Pollitt, Michael G.

Liberalisation has had a marked effect on innovative activities in the electricity industry. In particular, electricity reforms have resulted in a reduction in R&D spending in the sector. R&D and patenting activities are respectively regarded as innovative inputs to and outputs from technological progress. The present paper examines the effect of the reforms on patenting activity in the UK electricity sector. The results indicate that electricity related patents in non-nuclear and renewable technologies have increased in the post-liberalisation period. We attribute this trend to the increased commercialisation of the sector. While this development is positive, we argue that a lasting decline in R&D will in the longer run reduce technological progress and innovation in the sector. In order to maintain the pace of innovation, we discuss the need to design a new framework for innovation systems that is commensurate with the functioning and incentive mechanisms of a liberalised sector.

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Article provided by Elsevier in its journal Research Policy.

Volume (Year): 40 (2011)
Issue (Month): 2 (March)
Pages: 309-324

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Handle: RePEc:eee:respol:v:40:y:2011:i:2:p:309-324
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  1. Margolis, Robert M. & Kammen, Daniel M., 1999. "Evidence of under-investment in energy R&D in the United States and the impact of Federal policy," Energy Policy, Elsevier, vol. 27(10), pages 575-584, October.
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  7. Narin, Francis & Hamilton, Kimberly S. & Olivastro, Dominic, 1997. "The increasing linkage between U.S. technology and public science," Research Policy, Elsevier, vol. 26(3), pages 317-330, October.
  8. Jamasb, Tooraj & Nuttall, William J. & Pollitt, Michael, 2008. "The case for a new energy research, development and promotion policy for the UK," Energy Policy, Elsevier, vol. 36(12), pages 4610-4614, December.
  9. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
  10. Jamasb, T. & Pollitt, M., 2005. "Deregulation and R&D in Network Industries: The Case of the Electricity Industry," Cambridge Working Papers in Economics 0533, Faculty of Economics, University of Cambridge.
  11. Paul L. Joskow, 1998. "Electricity Sectors in Transition," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 25-52.
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