New big data paper

Anna Rosso and I have just published the next phase of our big data project. Kindly funded by NESTA, this builds on the work we did with Google last year. As before we’re working with Growth Intelligence, who’ve developed the very nice multi-layer dataset we use. We’ll be publishing a further paper sometime in the New Year.

You can download the full NIESR working paper here or a summary here. A version of the paper will also be coming out in Research Policy shortly.

The abstract is below. Or take a look at this writeup in the FT.

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Governments around the world want to develop their ICT and digital industries. Policymakers thus need a clear sense of the size and characteristics of digital businesses, but this is hard to do with conventional datasets and industry codes. This paper uses innovative ‘big data’ resources to perform an alternative analysis at company level, focusing on ICT-producing firms in the UK (which the UK government refers to as the ‘information economy’). Exploiting a combination of public, observed and modelled variables, we develop a novel ‘sector-product’ approach and use text mining to provide further detail on the activities of key sector-product cells. On our preferred estimates, we find that counts of information economy firms are 42% larger than SIC-based estimates, with at least 70,000 more companies. We also find ICT employment shares over double the conventional estimates, although this result is more speculative. Our findings are robust to various scope, selection and sample construction challenges. We use our experiences to reflect on the broader pros and cons of frontier data use.

Agglomeration, clusters and industrial policy

I have a new article out in the Oxford Review of Economic Policy, joint with Henry Overman. It’s part of a special issue on ‘Government and Business’, with other contributions by Jonathan Haskel, Stian Westlake, Dieter Helm, Francesca Froy and Phil McCann.

You can see the whole lot here, and (for the moment) PDFs are free.

My piece with Henry is a constructive-critical take on clusters and the urban level of innovation policy. Here’s the abstract:

This paper considers the appropriate spatial scale for industrial policy. Should policy focus on particular places, targeting clusters of firms that are spatially concentrated? Or should it, instead, be ‘space neutral’, refusing to discriminate between different areas unless absolutely necessary? We provide an overview of the literature and identify two waves of literature that argue strongly in favour of a cluster approach. We argue that this approach rests on shaky theoretical and empirical foundations. In contrast, we suggest that more attention should be paid to the appropriate spatial scale for horizontal interventions. What can policy do to make cities work better, in ways that help firms to grow? That is, what is the appropriate role for ‘agglomeration’ rather than ‘cluster’ policy? Finally, we consider the possibility that some horizontal industrial policy objectives may be better served by specifically targeting particular places or from decentralized design or delivery.

Read the whole thing here.