What Shapes Local Innovation Policies? Empirical Evidence from Japanese Cities

Abstract

Increasing attention has been paid to regional innovation systems. However, previous studies have so far only focused on (the regional impact of) national policies or specific regions. Despite increasing attention to regional and local innovation policies, no studies have been carried out to date on the factors of implementation and design of local research and development (R&D) subsidy programs at the city level. Our research fills this gap by using information on R&D subsidy programs from local authorities in Japan collected via websites and our original survey. Thus, our research aims at empirically investigating the determinants of both implementation and design of local R&D subsidy programs at the city level (length and upper limit of subsidies, and flexibility of subsidy conditions) considering both demand- and supply-side factors. We employ probit models for basic empirical estimations and provide some robustness checks. The empirical results suggest that, after controlling for city type and population size, supply-side factors including local government conditions significantly affect the implementation of public R&D subsidy programs. In contrast, we find that demand-side factors matter more for the design of subsidy programs than supply-side factors.

Multilevel policy governance and territorial adaptability: evidence from Japanese SME innovation programmes

“…The data was then checked for significant differences regarding their scale, content, conditions, and procedures (Table1). More statistical analysis of the survey data is presented elsewhere (see Okamuro and Nishimura, 2018).…”

“…municipalities, cities, prefectures, prefecture capitals, core/designated cities, and others). Further quantitative analysis is needed with the survey data to examine the relationships between these factors (see Okamuro and Nishimura, 2018).…”

Effects of multilevel policy mix of public R&D subsidies: Empirical evidence from Japanese local SMEs

“…Thus, Japanese innovation policy is currently undergoing a process of centralized decentralization involving the municipality level. Okamuro and Nishimura (2018b) found that, as of 2015, at least 131 cities among around 800 cities in Japan have already implemented their own R&D subsidy programs for local SMEs with different program designs according to different local needs and conditions. Okamuro et al (2019) discuss the multilevel governance of public R&D support in Japan with original survey data and some case studies, and they show some distinct differences in subsidy schemes between prefecture and city level programs.…”

“…However, local governments face budget and capacity constraints to different extents when initializing and implementing original innovation policies (Okamuro and Nishimura 2018b). Therefore, the implementation and design of local innovation support programs differs significantly across regions, especially between prefectures and municipalities and across municipalities (Okamuro et al 2018).…”

Development of Innovation Economy - Activity of Local Government in Poland

“…There is insufficient empirical evidence for the role of local government in the discussion on innovation development. While the central government is expected to plan national policies with the overall welfare of the nation, local authorities play a complementary role as they are often required to implement these national policies in relation to local conditions and needs (Okamuro and Nishimura, 2020). When analyzing the literature on the subject, it can be concluded that most of the publications concern about the role of local government in supporting innovative activities of enterprises or creating a favorable ecosystem.…”