Person:
Goldberg, Itzhak
Author Name Variants
Fields of Specialization
Economics of Innovation; Business Environment; Technology Transfer; State Enterprise Reform; Microeconomics
Degrees
Departments
Center for Social and Economic Research, Warsaw, Poland
Externally Hosted Work
Contact Information
Last updated
February 1, 2023
Biography
Since retiring from the World Bank in 2009, after a 19 years career, I joined CASE, Center for Social and Economic Research, a think tank in Warsaw as CASE Fellow. We have been working on several topics (Creativity and innovation, impact evaluation of EU’s SME support) for the European Commission. I kept working for ECA and the Africa region. In 2011, I joined the, European Commission’s Technology Institute IPTS in Seville on a visiting fellowship working on EU-US innovation policies. As of September I will be in residence with Fraunhofer MOEZ in Leipzig working on technology transfer and other innovation and IPR topics. My recent book, with Goddard, Kuriakose and Racine, is titled “Igniting Innovation” (2011).
Publication Search Results
1 - 10 of 13
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Publication
Can Russia Complete?
(Washington, DC: Brookings Institution Press, 2008)Russian economy has been growing at an average nominal rate of 6 percent annually for the past decade. Among the most important factors contributing to its expansion has been the skyrocketing cost of oil and gas. In 2000, when Vladimir Putin took office, the cost of oil was approximately $20 a barrel; at the end of his term, it was five times higher. Meanwhile, the competitiveness of Russian enterprises has become increasingly fragile because of the appreciating ruble, climbing resource prices, and rising wages as well as the exhaustion of Russia's excess industrial capacity. Observers have called for Russian authorities to take measures to counterbalance the nation's increasing economic dependence on natural resources. Economic diversification can cover a wide number of issues and involve many challenges, including entrepreneurship, foreign investment, regional development, and physical infrastructure. In Russia's case, it comes down to one thing: ensuring that the manufacturing sector can compete in the global economy. Russian competitiveness will not depend on centralized, top-down efforts to pick winners but on broader policy measures designed both to improve the investment climate-which affects firms' incentives to invest productively and create jobs-and to develop a more competitive, knowledge-based economy. Russian authorities are seeking to address many of the country's most important developmental challenges. Economic diversification will require reducing investment risks induced by national and regional policies and lowering barriers to entry for newer, more dynamic, and innovative firms, specifically by facilitating transfer of land from municipalities and from older, loss-making firms. It also will require greater inclusiveness in government decision making, more transparency regarding government decision making, and stable legislation at all levels of government. This book quantifies and benchmarks the relative strengths of Russian manufacturing and identifies opportunities to increase its productivity and competitiveness. This volume focuses on the challenges now facing enterprises in Russia, highlighting sources of productivity growth and competitiveness within enterprises, including technological progress (knowledge absorption and innovation), worker skills, and the investment climate. After the 1998 crisis, as gross domestic product rebounded, investment accelerated, and foreign direct investment increased dramatically, Russia's recovery surpassed expectations. Yet, a closer look at national accounts reveals that much of that shift has produced relative price increases in (non-tradable) services and full capacity utilization in industry-indicators more characteristic of a resource dependent economy than of successful industrial diversification. -
Publication
The Politics of Russian Enterprise Reform : Insiders, Local Governments, and the Obstacles to Restructuring
(World Bank, Washington, DC, 2001-10)Russia and other countries in the commonwealth of independent states that have implemented voucher privatization programs have to account for the puzzling behavior of insiders manager-owners-who, in stripping assets from the firms they own, appear to be stealing from one pocket to fill the other. This article suggests that asset stripping and the absence of restructuring result from interactions between insiders and subnational governments in a particular property rights regime, in which the ability to realize value is limited by uncertainty and illiquidity. As the central institutions that govern the Russian economy have ceded their powers to the provinces, regional and local governments have imposed a variety of distortions on enterprises to protect local employment. To disentangle these vicious circles of control, this article considers three sets of institutional changes: adjustments to the system of fiscal federalism by which subnational governments would be allowed to retain tax revenues generated locally; legal improvements in the protection of property rights; and the provision of mechanisms for restructuring and ownership transformation in insider-dominated firms. The aim of these reforms would be to change the incentives that local governments, owners, and investors face; to convince subnational governments that a more sustainable way of protecting employment lies in protecting local investment; to raise the cost of theft and corruption by insiders and local officials; and to allow investors to acquire controlling stakes in viable firms. -
Publication
Poland and the Knowledge Economy : Enhancing Poland's Competitiveness in the European Union
(Pruszkow, Poland: Rewasz Publishing House and the World Bank, 2004)The Poland Knowledge Economy Assessment (KEA) aims to provide policy options for securing sustainable growth, and improving competitiveness, by creating an environment conducive to business development, and investment in general, as well as to knowledge generation and absorption via innovation, and learning, in particular, as well as by stimulating investment in innovation, and in learning systems. This KEA argues that efficient, and relevant lifelong learning systems, Information and Communication Technologies (ICT), institutions and funding mechanisms to support innovative research and development (R&D), are essential components of the National Innovation System (NIS). The foremost theme of this report is securing sustainable growth and competitiveness in Poland, by stimulating investment in R&D, and in appropriate learning systems, which have a key role in developing a country's absorptive capacity-the ability to identify, assimilate, and exploit knowledge from both domestic, and external sources. Therefore, policies that support the development of inter-firm linkages, and the capacity to absorb new knowledge that can be gained through such linkages, are crucial elements. As regards R&D and innovation, efforts need to be made to build institutions and provide financial incentives aiming to increase Polish R&D. Nevertheless, it should be stressed that an improvement in the business environment in Poland is a necessary condition for raising the R&D within firms. Most importantly, efforts need to be made to increase the quality, and relevance of the formal education system, ensure the provision of life long learning systems to the entire population, and improve the linkages between academia, the scientific, and business communities that assist the transfer of technology in other countries. It is proposed that the regulatory framework be updated to the European Union (EU) 2002 level, and that the capacity, and market credibility of the Office of Telecommunications and Post Regulation (the regulatory authority), be strengthened in order to sustain competition. The implementation of e-government services for businesses, as well as citizens is key for improving the efficiency, and competitiveness of Polish business. -
Publication
Fiscal Federalism and Regional Growth : Evidence from the Russian Federation in the 1990s
(World Bank, Washington, DC, 2003-09)Subnational fiscal autonomy-the basis for fiscal federalism in modern federations-is meant to serve two roles. First, local control over revenue collection is meant to provide a check on the capacity of central authorities to tax arbitrarily local capital. Second, retention of taxes raised locally is meant to establish incentives for subnational governmental authorities to foster endemic economic growth as a way of promoting local tax bases. But in the Russian Federation, fiscally autonomous regions have often resisted market-oriented reforms, the enactment of rules protecting private property, and the dismantling of price controls and barriers to trade. The authors find statistical evidence in support of the hypothesis that fiscal incentives of the Russian regions represent an important determinant of regional economic performance. The authors also seek to understand the conditions under which fiscal autonomy prompts regional growth and recovery, and the conditions under which it has adverse economic effects. They argue that the presence of "unearned" income streams-particularly in the form of revenues from natural resource production or from budgetary transfers from the central government-has turned regions dependent on these income sources into "rentier" regions. As such, governments in these regions have used local control over revenues and expenditures to shelter certain firms (natural resource producers or loss-making enterprises) from market forces. Using new fiscal data from 80 Russian regions from 1996-99, the authors test this central hypothesis in both single- and simultaneous-equation specifications. Their results indicate that tax retention (as a proxy for fiscal autonomy) has a positive effect on the cumulative output recovery of regions since the breakup of the Soviet Union. But they also find that this effect decreases as rentable income streams to regions increase. -
Publication
Productivity, Ownership and the Investment Climate : International Lessons for Priorities in Serbia
(World Bank, Washington, DC, 2005-08)The authors use data on 27,000 firms from 50 countries, half of which are transition economies, together with the case of Serbia to examine the relationship between productivity, the investment climate, and private ownership of firms. As government capacity to address investment climate constraints is limited, the prioritization of the constraints is critical. Identification of the relative effects of various investment climate constraints and ownership on productivity should serve as a guide for such prioritization. Although ownership has recently received less attention in policy decisions than before, according to the econometric analysis of productivity reported by the authors, private ownership is an equally or more important determinant of productivity than other components of the investment climate. The importance of ownership shows that an unfinished privatization and restructuring agenda might have negative effects on productivity, in parallel to poor investment climate. Another important finding is that countries in which firms complain more about infrastructure tend to have less productive firms. -
Publication
R&D Institutes in ECA : A Reform Strategy
(World Bank, Washington, DC, 2009-04)In Eastern Europe and Central Asia (ECA) countries, the states own and operate most of the research and development institutes (RDIs). These institutes often play an important and even dominant role in conducting research and development (R&D). In high-income economies, however, the private sector typically dominates R&D. Private sector research usually responds better to market incentives, resulting in more useful innovations than public sector R&D, although the two are complementary. In general, the economic impact of RDIs in ECA has been low. Although several ECA RDIs are able to publish and patent as much as their high-income economy counterparts, the quality of their research and ability to diffuse knowledge is lagging and their international publications are not highly cited. In addition, their patents are not translated into commercial applications through licensing or contract research with industry. A reform strategy is proposed here for RDIs in ECA, based on their relevance to national priorities, expected role as providers of public versus private goods, performance levels, and relation to relevant markets and users. When deciding on the appropriate ownership and management structures for the RDIs, governments need to distinguish among RDIs that provide mainly public goods, RDIs that sell or could possibly sell mainly private goods and services, and RDIs that produce public and private goods. -
Publication
Globalization and Technology Absorption : Role of Trade, FDI and Cross-Border Knowledge Flows
(World Bank, Washington, DC, 2010-05)Improving the ability of Europe and Central Asia (ECA) countries to tap into the global technology pool is an important mechanism for accelerating their industrial development, worker productivity and economic growth. Trade flows, foreign direct investment (FDI), research and development (R&D), and labor mobility and training, are widely accepted as key mechanisms for knowledge absorption. Absorption requires tough decisions and large investments, as firms need to spend resources on modifying imported equipment and technologies, and reorganizing production lines and organizational structures. Case studies of privatized enterprises in Serbia highlight the important role of foreign investors in knowledge absorption, whether acquired through capital goods imports, exporting, hiring consultants and other knowledge brokers, or from licensing technology. The Serbian case studies targeted FDI based on acquisition of existing assets from the government (privatization), or from private owners, rather than 'greenfield' FDI. The analyses suggested, in general, that companies sold to domestic investors were not able to increase exports in a significant way, while comparable firms receiving FDI did much better. In addition, more significant changes in product mix and manufacturing occurred in companies bought by foreign investors. New directors were brought in from the multinational enterprises (MNE), the domestic investors' holdings, from rival companies, or promoted from within. In companies acquired by foreign investors, the comparative advantage for R&D was in the adaptation of products and machinery to local conditions, rather than in innovation. -
Publication
Public Financial Support for Commercial Innovation in ECA Countries
(World Bank, Washington, DC, 2010-05)Key factors driving self-sustained, long-term economic growth are innovation and technology absorption; these factors are generated from within the economic system, responding to economic incentives. This conceptual framework molds analysis: on the one hand, the view of the centrality of innovation and knowledge creation in the growth process and, on the other hand, the understanding that these are economic factors that may be shaped and influenced by properly designed economic policies. For the purpose of this knowledge brief, innovation can be defined as the development and commercialization of new unproven technologies and untested processes and products, and absorption as the application of existing technologies, processes, and products. The ability of an economy to research and develop new technologies increases its ability to understand and apply existing technologies. Vice versa, the absorption of cutting-edge technology inspires new ideas and innovations. -
Publication
The Vicious Circles of Control: Regional Governments and Insiders in Privatized Russian Enterprises
(World Bank, Washington, DC, 2000-02)How can one account for the puzzling behavior of insider-managers who, in stripping assets from the very firms they own, appear to be stealing from one pocket to fill the other? The authors suggest that such asset-stripping and failure to restructure are the consequences of interactions between insiders (manager-owners) and regional governments in a particular property rights regime. In this regime, the ability to realize value is limited by uncertainty and illiquidity, so managers have little incentive to increase value. As the central institutions that rule Russia have ceded their powers to the regions, regional governments have imposed various distortions on enterprises to protect local employment. Prospective outsider-investors doubt they can acquire the control rights they need for restructuring firms and doubt they can avoid the distortions regional governments impose on the firms in which they might invest. The result: little restructuring and little new investment. And regional governments, knowing the firms' taxable cash flows will have been reduced through cash flow diversion, have responded by collecting revenues in kind. To disentangle these vicious circles of control, the authors propose a pilot for transforming ownership in insider-dominated firms through a system of simultaneous tax-debt-for-equity conversion and resale through competitive auctions. The objective: to show regional governments, for example, that a more sustainable way to protect employment is to give managers incentives to increase enterprises' value by transferring effective control to investors. The proposed mechanism would provide cash benefits to insiders who agree to sell control to outside investors. The increased cash revenue (rather than in-kind or money surrogates) would enable regional governments to finance safety nets for the unemployed and to promote other regional initiatives. -
Publication
Globalization and Ttechnology Absorption in Europe and Central Asia : The Role of Trade, FDI, and Cross-Border Knowledge Flows
(Washington, DC : World Bank, 2008)This study analyzes the extent of knowledge and technology absorption for firms in Europe and Central Asia (ECA), as well as the factors that influence absorption, using statistical analyses of various data sources, including the World Bank enterprise surveys, patent databases maintained by the United States (U.S.) and European patent offices, and case studies. The study addresses the following issues: (i) what can we learn from patents and patent citations about international knowledge flows and cross-national technological cooperation in ECA? (ii) How does openness to trade, participation in global supply networks, and investment in human capital, via on-the-job training, enhance knowledge and technology absorption in ECA-region manufacturing firms? How does foreign direct investment (FDI) stimulate acquisition of managerial and technical skills, new machinery and equipment, and market development?