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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.

Suggested Citation

  • 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.
    • Handle: RePEc:cam:camdae:0533
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    File URL: http://www.electricitypolicy.org.uk/pubs/wp/eprg0502.pdf
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    Cited by:

    1. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    2. da Graça Carvalho, Maria & Bonifacio, Matteo & Dechamps, Pierre, 2011. "Building a low carbon society," Energy, Elsevier, vol. 36(4), pages 1842-1847.
    3. repec:spo:wpmain:info:hdl:2441/f6h8764enu2lskk9p4oq2cqb0 is not listed on IDEAS
    4. 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.
    5. Marino, Marianna & Parrotta, Pierpaolo & Valletta, Giacomo, 2019. "Electricity (de)regulation and innovation," Research Policy, Elsevier, vol. 48(3), pages 748-758.
    6. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    7. Jamasb, Tooraj & Pollitt, Michael G., 2011. "Electricity sector liberalisation and innovation: An analysis of the UK's patenting activities," Research Policy, Elsevier, vol. 40(2), pages 309-324, March.
    8. Canals, Claudia, 2006. "What Explains the Widening Wage Gap? Outsourcing vs. Technology," Conference papers 331547, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, vol. 37(2), pages 377-386, February.
    10. repec:hal:spmain:info:hdl:2441/f6h8764enu2lskk9p4oq2cqb0 is not listed on IDEAS

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    More about this item

    Keywords

    innovation; R&D expenditure; electricity reform; regulation; ownership;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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