4 Potential

In this chapter, we want to determine which countries might have some of the prerequisites for developing an advantage in the four technologies of interest. We build on the fact that countries

• find it easier to innovate in technologies that are related to technologies they are already good at and
• tend to increase exports in goods that are related or ‘nearby’ the goods in which they already have a comparative advantage, in order to take advantage of their current sector structure.

We assess the potential to develop a specialisation in one of the four low-carbon technologies by inspecting specialisation in similar products/technologies and export/patenting patterns of similar countries. We then analyse which countries are good at patenting the technologies we identified as being ‘nearby’ our four low-carbon technologies (see Annex).

To give one example, to establish Poland’s potential for wind turbine innovation, we look at related technologies, such as machines or engines for liquids (F03D) and data simulation methods (G09B and G06Q), and related countries, such as Romania. We find that the potential RTA of Poland for wind turbines is rather high, because it is already specialised in the nearby technologies. In fact, Poland is also already specialised in wind turbines.

Potential strength in technology

Figure 4.1: Proximity weighted revealed comparative advantage (pRCA) and proximity weighted revealed technological advantage (pRTA) in 3-year periods between 2000 and 2014, Source: Bruegel based on EPO and PCT patent applications from EPO PATSTAT (EPO 2016), UN Comtrade (United Nations Statistics Division 2017).

In general we find that countries that specialise in nearby technologies are already also specialised in the low-carbon technology of interest – somewhat validating our approach. The interesting cases are, however, those countries that are good at innovating or exporting in nearby technologies, but which have not yet developed a specialisation in the technology of interest.