CSES Working Papers 1995-2006

CSES Working Paper No. 26
Commercialisation Processes in Bioinformatics: Analysis of Bioinformatics Patents
Bruce Rasmussen (December 2005), (pdf file 135 KB)

This paper sets out to document the converging nature of the innovation process in bioinformatics; to examine patenting strategies of bioinformatics companies; to identify the nature of the key companies and other organisations in the bioinformatics innovation process; and to identify the key research teams involved. It is very much work in progress.

Given the complex nature of patent analysis and issues with the definition of bioinformatics, much of the paper is devoted to providing an outline of various patent analysis methodologies and the implications of those methodologies for the analysis and conclusions.

CSES Working Paper No. 25
Commercialisation Processes in Converging Technologies: Case Study of Bioinformatics
Bruce Rasmussen (March 2005), (pdf file 99 KB)

CSES Working Paper No. 24
Research Communication Costs in Australia, Emerging Opportunities and Benefits
John Houghton, Colin Steele and Peter Sheehan (2006), (pdf file 940 KB)

The environment in which research is being conducted and disseminated is undergoing profound change, with new technologies offering new opportunities, changing research practices demanding new capabilities, and increased focus on research performance. Nevertheless, despite billions of dollars being spent by governments on R&D each year, relatively little policy attention has yet been paid to the dissemination of the results of that research through scholarly publishing.

A key question facing us today is, are there new opportunities and new models for scholarly communication that could enhance the dissemination of research findings and, thereby, maximise the economic and social returns to public investment in R&D? By exploring the costs involved in scholarly communication activities and some of the potential benefits available through emerging scholarly communication alternatives, this study contributes to helping us answer this question.

The study provides background information, which is intended to provide a basis for improved management of, and access to, research information, outputs and infrastructure so that they are discoverable, accessible and shareable. It also provides activity costing estimates for a range of core activities within the higher education sector that may prove useful in the management of institutional budgets and priorities.

CSES Working Paper No. 23
The Economic Impact of Enhanced Access to Research Findings
John Houghton and Peter Sheehan (2006), (pdf file 126 KB)

The environment in which research is being conducted and disseminated is undergoing profound change, with new technologies offering new opportunities, changing research practices demanding new capabilities, and increased focus on research performance. A key question facing us today is, are there new opportunities and new models for scholarly communication that could enhance the dissemination of research findings and, thereby, increase the returns to investment in R&D?

Identifying access and efficiency limitations under the subscription-based publishing model that has dominated scientific publishing, this paper explores the potential impacts of enhanced access to research outputs. We develop a modified growth model, introducing ‘access’ and ‘efficiency’ into calculating the returns to R&D. Indicative impact ranges are presented for gross expenditure on R&D (GERD) and government expenditure on R&D (GovERD) for all OECD countries. We conclude that there may be substantial benefits to be gained from increased access to research findings, and our preliminary estimates suggest that this may be fertile ground for further policy relevant inquiry.

CSES Working Paper No. 22
The Evolution of Constitutional Federalism in Australia: An Incomplete Contracts Approach
Bhajan Grewal and Peter Sheehan (2003), (pdf file 81 KB)

The interest in, and the appeal of, fiscal federalism and fiscal decentralization have been increasing in recent years. At the same time many mature federations continue to evolve towards greater centralization, as Australia has evolved in the last one hundred years. The reasons for the evolution of fiscal federalism towards greater centralization remain unclear, and the traditional theories of fiscal federalism shed little light on the factors that might be important in this process. This paper suggests that the insight yielded by the new institutional economics – that the motivations and incentives of economic agents, and the options available to them, are influenced in a fundamental sense by the incompleteness of contracts – may throw considerable light on the evolution of federalism in Australia over the past one hundred years.

CSES Working Paper No. 21
The Quality Use of Medicines: Serving Health and Economic Objectives?
Peter Sheehan (2003), (pdf file 87 KB)

CSES Working Paper No. 20
Rates of Interest, Credit Supply and China’s Rural Development 
Enjiang Cheng and Zhong Xu (2003), (pdf file 93 KB)

By analysing the data on the supply of rural credit, we find that official statistics have overstated the supply of institutional credit in rural China, as the supply of institutional credit as a proportion of rural deposits in China has actually plummeted after 1996. Using the findings from field investigations in China, we argue that the current official lending rate is unsustainable and that state regulation of interest rates and the consequential market distortions have contributed to the ever-growing non-performing loans and financial losses of rural financial institutions, and hence to the declines in the supply of rural credit.

CSES Working Paper No.19
The Global Knowledge Economy and Regional Concentration of Manufacturing in Australia
Peter Sheehan and Bhajan Grewal (2000), (pdf file 88 KB)

This paper is concerned with the implications of the knowledge economy for the spatial distribution of economic activity in Australia, and with the role played by foreign direct investment and multinational enterprises (MNEs) in influencing that distribution.  There are clearly two antithetical sets of forces in play globally: those working towards greater geographical dispersion of economic activities and those working towards increased geographical concentration of those activities.  Globalisation and localisation have therefore become opposite sides of the same coin.  That is, at the same time as economic activities, and perhaps particularly those of MNEs, are becoming dispersed around the world they are also being increasingly concentrated in particular regions or 'sticky places'.  An important part of this process is the emergence of clusters of asset augmenting activities, whereby MNEs and local firms concentrate many of their activities in small regional areas, inter alia to take advantage of the dynamic externalities associated with the use of intellectual capital.

CSES Working Paper No.18
A Primer on the Knowledge Economy
John Houghton and Peter Sheehan (2000), (pdf file 582 KB)

This primer is intended as a brief guide to the Knowledge Economy for people in business and government who need a succinct summary of its major features and implications.  It draws on research undertaken at CSES over the last few years, on the work of the OECD and on a rapidly growing international literature, and aims to provide a synthesis.  We address the following questions:

• What is the knowledge economy?
• What is new about the 'New Economy'?
• What does it mean for Australia?
• What might we do to meet the challenge?

CSES Working Paper No.17
Manufacturing and Growth in the Longer Term: An Economic Perspective
Peter Sheehan (2000), (pdf file 98 KB)

This IMS Vision 2020 Forum is intended to focus on the key issues shaping manufacturing in the early decades of the new century, having regard to emerging technological and socio-economic trends.  My task in this paper is to provide some economic perspective to this agenda, with special reference to recent economic theorising about growth and to the continuing impact of technological change on the global economic and social structure.  In doing so I am conscious of the diversity of possible approaches to this agenda, and in particular to the discussion of similar issues in this place three years ago, which gave rise to the important National Research Council publication Visionary Manufacturing Challenges for 2020 (National Research Council 1998).  Thus this paper can be seen only as one limited and personal perspective. 

CSES Working Paper No. 16 
Priority Areas of Australian Clinical Health R&D
Nick Pappas (1999), (pdf file 43 KB)

The study found that Australian expenditure on clinical health R&D aimed at improving treatment to various forms of cancer, including prostrate and breast cancer, and heart disease is likely to realise relatively high returns to Australians. These diseases are relatively large causes of premature mortality in Australia, and are relatively large causes of premature mortality in Australia compared to other OECD countries. Resources allocated to developing better antiasthmatics are also likely to realise a relatively large return due to the relatively large number of asthmatics in Australia. Finally, using these results to evaluate the existing composition of Australian expenditure on clinical health R&D revealed that increasing the share of R&D to these areas might improve Australian health and thereby welfare.

CSES Working Paper No. 15
The Global Knowledge Economy: Challenges for China's Development 
Peter Sheehan (1999), (pdf file 94 KB)

Two central facts provide the motivation for this paper, and the intersection between them provides the central question. The first fact is the fundamental transformation of global economic activity which is taking place, and which is sometimes referred to as the emergence of the global knowledge economy. When our grandchildren sit back and reflect in the middle of the new century, the years between about 1985 and 2020 will stand out as a period at least as pivotal in human affairs as that between 1760 and 1820, which ushered in the Industrial Revolution. For what we are in the midst of is the emergence of a quite new set of economic activities, arrangements and institutions – the global knowledge economy. This new economy will be as different from what preceded it as was the industrial era from feudalism, and it is already beginning to have a comparable impact on social relationships and institutions.

CSES Working Paper No. 14
Did the Australian Loan Council Encourage Excessive Borrowing by the States
Bhajan Grewal (1999), (pdf file 57 KB)

The controls employed by the Australian Loan Council over State governments' borrowings are examined in the context of the recent literature on bailouts and fiscal responsibility. It is found that although some bailout did occur from time to time, there is no evidence of a systemic bias towards bailouts in Australia. Considering that the Australian Loan Council is a unique institution among federal countries, its success in avoiding systemic bailouts may be of more than passing interest in other countries.

CSES Working Paper No. 13
Transport Engineering Technologies
Ainsley Jolley (1999), (pdf file 82 KB)

This study is an attempt to marry some empirical observations on prospective technological developments in transportation and engineering with developments in economic theory. It draws on research undertaken by the Centre for Strategic Economic Studies on the aerospace industry (CSES 1995, 1999) and research on sustainable transport (Jolley 1996, 1999) as well as unpublished research on global developments in the defence industries. On the theoretical side, it makes use of the literature on evolutionary economics and innovation systems (note DISR 1998). In addition, it also draws attention to the relevance of technology foresight as a tool for influencing innovation systems (APEC Center for Technological Foresight 1998; AATSE 1999). The first section of the paper emphasises the substantial stimulus to innovation that now exists in transportation and defence systems. This stimulus arises in large part because of the momentum associated with the push to develop sustainable transportation. The second section of the paper describes the new technologies being developed in different industries (materials technology, engines, industrial electronics, design and manufacturing technologies, new approaches to maintenance and repair and to safety). It indicates that these developments will give rise to potential technological synergies across a broad range of industries. The final section of the paper tackles the issue of how these potential technological synergies might best be exploited. It briefly reviews the economic analysis of innovation, gives some examples of Australian capacities for engineering innovation, and indicates how technology foresight as a tool can be applied to encouraging the development of a national innovation system in Australian engineering.

CSES Working Paper No. 12
‘New Manufacturing’ One Approach to the Knowledge Economy
John Houghton, Nick Pappas and Peter Sheehan (1999), (pdf file 128 KB)

With the emergence of the global knowledge economy we are seeing changes in the industrial composition of economies, in the nature of activities within industries, and in the relationships between industries. In this paper we seek to shed light on the nature of those changes. We begin by questioning the commonly held notion that a knowledge economy is a services economy. We then develop an alternative framework for understanding the economic contribution of various production and service activities. In this way, we show that the goods producing and goods related service industries remain at the core of developed economies. We then present a brief sketch of the nature of ‘new manufacturing’ in order to highlight the increasing inter-relatedness of both sectors and industries in a knowledge economy. Finally, we present an example of how an alternative perspective on structural change, and on the emergence of the increasingly complex product systems which we characterise as ‘new manufacturing’, can be operationalised and used to inform the study of even the most traditional manufacturing industries as well as the formulation of industry policy for a knowledge economy. Implications for China’s future development are discussed.

CSES Working Paper No. 11
Analysing Changes in Industry Structure
Galina Tikhomirova (1997), (pdf file 236 KB)

In considering changes in industry structure, some framework or lens is necessary through which to view and describe the changes. This paper seeks to contribute in two ways to an improved framework for analysing such changes, with a particular emphasis on the long-run income potential of industry structure. Five key characteristics of industries are outlined and used to describe major industries in the developed nations. These five characteristics are used in order to develop one particular lens - termed the Index of the Long Run Income Potential of Industry Structure - to assess changes in the structure of trade and production of different countries and regions in a global context. The index, an analytical tool for evaluation of the structure of manufacturing, is based on the proposition that, other things being equal, a country with an industry structure showing a high value of the index should be able to generate a high level of per capita income for its citizens. Some examples of the application of the Index are presented in this paper. These allow the author to draw some conclusions about the pace and the direction of the process of structural change over the period 1970-1994 and about structural significance of computers and electronics industries.

CSES Working Paper No. 10
The Australian Economy and Society: Shifting Boundaries of Social Welfare in the Australian Federation
Bhajan Grewal and Peter Davenport (1997), (pdf file 100 KB)

Since the fall of the Whitlam government in 1975, budgetary policy of the Commonwealth has been framed generally in the context of fiscal restraint. The need to fight inflation by reducing budget outlays and deficits remained a constant theme with the Commonwealth governments under Prime ministers Fraser, Hawke and Keating. Commonwealth payments to the States, having reached high levels during the Whitlam years, were targeted for restraint throughout the subsequent years. A distinctive feature of the measures adopted for this purpose by the Fraser governments was the sharp reductions in the specific purpose payments to the States, while general purpose payments were protected by several guarantee provisions. In contrast, the Hawke-Keating governments slashed the general purpose payments to the States, and the share of specific purpose grants increased to more than half of total payments by 1994-95. Against this background, the role of the States in social welfare outlays has been creeping up, especially in the past decade. This paper traces this change in the traditional boundaries of governments and raises several questions about the sustainability of the new trend. 

CSES Working Paper No. 9
Economics Beyond the Neoclassical Synthesis: Rediscovering Keynes's Enterprise
Peter Sheehan (1996), (pdf file 2833 KB)

This paper has two central themes. One is that to make sense of the results of work in mathematical economics over the past twenty years - the incredible richness of the models now being produced, the wide diversity of their policy implications and the evident failings of the welfare foundations of modern economics - requires an understanding of the enterprise of economics quite different from that of the pioneers of mathematical economics. The second theme is that the understanding of the enterprise of economics which Keynes evolved and practised is highly relevant to this new task of making sense of economics beyond the neoclassical synthesis. Keynes’s conception of economics as a moral science, in which a wide variety of models are used as tools to guide practical judgement and the formulation of policy initiatives to achieve morally desirable goals, may have disappeared into the black hole of mathematics, but it is reappearing with new force out the other side.

CSES Working Paper No. 8
Sustainable Transport, New Technologies and Industry Development
Ainsley Jolley (1996), (pdf file 1483 KB)

The motor vehicle as currently designed in conjunction with present road traffic management systems will not remain viable once the costs of traffic congestion, air pollution and global warming are taken into account. These issues are influencing research on new technologies for vehicle engines and new car designs, as well as new systems of traffic management. The resulting changes in vehicle design and traffic management systems will have a significant impact on the structure of the global motor vehicle industry.

CSES Working Paper No. 7
Federalism and Fiscal Equalisation: Should India Follow the Australian Path?
Bhajan Grewal (1996), (pdf file 1146 KB)

In most federations, the distribution of intergovernmental financial transfers is based on the principle that relatively weaker jurisdictions (in fiscal terms) receive more resources per capita than the other jurisdictions, although not every country has put in place a systematic approach to the application of this principle, and the practice differs from one case to another. In Australia, Canada and Germany, relatively more formal and systematic approaches are adopted for this purpose, even though there are important differences in each country’s coverage of fiscal equalisation and the associated institutional arrangements. In India too, there is a strong redistributive element in the distribution of central government grants to the States, but the approach is again different from that in the other countries.
Not only do Australia and India share the objective of geographic redistribution, but in recent years suggestions have been made to modify some features of India’s approach to grant distribution, which, if implemented, would bring the two countries’ approaches closer. In particular, this would be the case if the work of the Finance Commission were to cover the entire revenue budget of the States, not just the non-plan revenue budgets, and if the Finance Commission were to be either made a permanent body or serviced by a permanent secretariat. The Finance Commission could then become an organisation similar to the Commonwealth Grants Commission in Australia in terms of its coverage and tenure. The main question posed in this paper arises because even then important differences will remain in what each commission is required to do and how it approaches its brief. Focusing on these substantive differences, the paper considers whether or not they should be maintained in future. 

CSES Working Paper No. 6
Diverse Paths to Industrial Development in East Asia and Asean
Peter Sheehan and Galina Tikhomirova (1996), (pdf file 122 KB)

Two central facts dominate the history of the world economy over the past two decades - the revolution in computing and communications and the rise of East Asia and ASEAN - although their conjunction is normally regarded as casual rather than causal. Over the same period one key theme in the intellectual history of economics has been the re-examination of the role of innovation and of the creation of new goods in generating growth, these aspects having been excluded by the assumptions of the standard neoclassical models which prevailed for several decades. The revolution in computing and communications has surely led to the most rapid process of creation of new goods that the world has seen, while the sustained pace of economic development in East Asia and ASEAN also has no obvious parallel. This paper attempts to link these two phenomena, and to explore them in the context of new theories of growth based on the intentional creation of new goods. Our aim is to throw some light both on the diverse patterns of growth in East Asia and ASEAN and on the relevance of these new growth theories to the contemporary growth experience.

CSES Working Paper No. 5
A New Era of World Economic Growth
Ainsley Jolley (1995), (pdf file 148 KB)

This paper argues that the rate of growth of the world economy is likely to accelerate over the coming decade as a result of the impact of the new information technologies on productivity, improvements in the capacity of businesses to manage accelerating technological change, and a continuing increase in the contribution of the Asian economies to world growth. 
The analysis employed in the paper is to focus on four major influences on the medium term growth of industrialised economies: the macroeconomic framework,  microeconomic influences, technological change, and the role of management. These influences are analysed in terms of their contribution over the past few decades, and their likely future impact. The development path of the rapidly growing Asian economies, and the role played by the diffusion of advanced technology, is explored. Finally, some long term constraints on growth associated with environmental factors and ageing populations are identified.

CSES Working Paper No. 4
Keynes and the Contemporary Predicament
Peter Sheehan (1995), (pdf file 54 KB)

The clash between the values of the market and of the civilised community is a major concern in many parts of the world, even as market-based mechanisms generate more rapid growth. A better understanding of Keyne's view of economics as a moral science can throw light both on this dilemma and on the role of economics in relation to it. The paper argues that recent theoretical trends in economics - particularly the development of a diverse range of theories to guide judgement in different circumstances and the return to substantive concepts of the good - are consistent with this view.

CSES Working Paper No. 3
Reason, Values and Public Policy
Peter Sheehan (1995), (pdf file 46 KB)

Prevailing approaches to policy issues in many Western countries in recent decades have reflected a characteristic cast of mind - neoclassical in economics, liberal and individualistic in politics, value neutral and universalistic in policy. This paper analyses some of the foundations of this cast of mind, deep-seated in Western intellectual history, and reviews work in several different areas pointing to a different paradigm. This analysis is set in the context of the rise of Asian nations with quite diverse traditions, and the consequent need for effective interchange across cultural barriers.

CSES Working Paper No. 2
Vertical Fiscal Imbalance in Australia: A Problem for Tax Structure, not for Revenue Sharing
Bhajan Grewal (1995), (pdf file 108 KB)

It is argued in this paper that vertical fiscal imbalance remains a serious problem for Australian federation. The paper shows that although by conventional measures vertical fiscal imbalance may have improved in recent years, judging by its impact on the States’ tax structure it is clear that the situation has deteriorated. The unhappy legacy of revenue sharing arrangements over the past fifty years is discussed and it is shown that, despite numerous alterations in these arrangements, revenue sharing has failed as a solution for the problem of fiscal imbalance, and has resulted in loss of accountability and responsibility in government, and in institutional waste. The States’ struggle for access to the field of income tax since the 1950s is outlined and the perceived impediments to such an access are considered in the light of the 1991 report of the Commonwealth-State officers’ working party on tax powers. 

CSES Working Paper No. 1
Fiscal Federalism in Australia: From Whitlam to Keating
Russell Mathews and Bhajan Grewal(1995), (pdf file 111 KB)

This paper presents an assessment of the development of fiscal federalism in Australia over the two decades from 1972 to 1992. This period covers the administrations of four Prime Ministers, Whitlam, Fraser, Hawke and Keating, which witnessed phenomenal change in the functioning of the Australian federal system. It is argued that while fiscal dominance of the Commonwealth remained a feature throughout this period, fiscal centralisation reached new heights during the Hawke-Keating period of 1983-1992.