Mission-oriented innovation policies often contributes to the improvement of national production processes. These are ambitious and cross-disciplinary policies tackling clearly defined societal or technological challenges mainly applied through public R&D investment with a market-oriented purpose. The aim of this paper is to analyse the extent to which competitiveness improvement in the technological trajectory determined by such national policies is magnified by knowledge capital spilling from skilled migrants coming from other countries. Technological capabilities developed abroad to design and implement local processes of innovation might provide large benefits via positive externalities, where the capacity to gain from such spillover depends on the relative position of countries in the knowledge network.
In order to conduct our investigation, we propose a simple analytical framework of national innovation system, where the innovation performance of a country –proxied by the number of registered triadic patents–is determined by its investments in mission-oriented innovation policies, weighted by its position in the skilled migration network. The model is then tested using a panel database covering 20 OECD countries for the time span 1987-2016.
A concern with our analysis is that skilled migrants will self-select into destination countries where they will find better opportunities, e.g., where innovation performances are already significantly high. This endogeneity issue might hinder the identification of skilled migration effects, since it might be that higher performances will be mechanically correlated with a higher presence of migrants, but not determined by them. For this reason, we propose an empirical strategy based on a two-step Heckman correction which sorts out such endogeneity concerns and allows a causal interpretation of our results.
Findings from our analysis show that high skilled migration networks magnify the effect of mission-oriented innovation policies in improving national innovation performances, even when controlling for other common drivers of innovation, and time and country fixed effects. On the contrary, being central in middle or low skilled migration networks has no statistically significant effect on innovation production.
At the same time, we find that the role of migrants is heterogeneous across countries. Their contribution to innovation production is highest in host countries where public R&D investments are still relatively low. On the contrary, the extent to which migrants’ origin countries invest in mission-oriented policies does not exert any significant effect on their ability to contribute to innovation processes in the host country. This suggests that skilled migration is valuable to innovation regardless of its national composition, and it is most valuable when host countries are still on a catching-up path.