What is the Universeh Winter School?

UNIVERSEH is a European project co-financed by the Erasmus+ Program. Under the coordination of the University of Toulouse, TBS Education is part of the alliance alongside 4 universities (University of Luxembourg, Heinrich Heine University Dusseldorf, Luleå University of Technology and AGH University of Science and Technology Krakow). The project aims to foster student employability by providing them mobility opportunities and innovative pedagogical tools in order to develop their skills in line with the spatial labor market needs.   

The Artic Winter School was a 6-day event (February 27th to March 4th) organized by Luleå University of Technology at the Kiruna campus in Sweden. Lectures, workshops, study visits and conviviality moments rhythmed the schedule focused on climate change and the space field in the Arctic region. Students with various background came to Kiruna from the 5 universities of the alliance to exchange and learn about these subjects.

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TBS Education joined the UNIVERSEH Arctic Winter School by sending two students on the Master in Management Program. Meet Lisa & Corentin and learn more about their experience at Kiruna and at Luleå University.  


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My name is Lisa de Paoli, I’m 22 years old and I’m in my gap year at TBS Education. After two years of preparatory classes I joined TBS Education in L3 and I continued in the Audit DSCG course.”


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“Hello, I’m Corentin and I’m currently in a gap year. I have done 2 years of preparatory class before TBS Education and my second semester of Master 1 in the US.

I’m currently in Paris doing an internship and will be back in Toulouse in September 2023.”

How did you hear about this opportunity? Had you heard of UNIVERSEH before?

Corentin: “In November 2022, I received an email saying “Opportunity for Sweden” or something like that. Although I am usually drowned with email from school this one drew my attention. It was the first time I heard about UNIVERSEH. Quickly after receiving this email, I checked the project’s website and thought it was very interesting.”

What were your motivations to apply to this program and how is it complementary with your main area of studies?

Lisa & Corentin: “Our main motivations were to discover the Arctic, its northern lights and meet international students. It was a very enriching week from a personal and professional point of view. It allowed us to develop our knowledge about the Arctic region and to develop our critical point of view on several subjects.”

How would you describe your experience?

Corentin: “You will have stars in your eyes. And I think we can really say it. The landscape was amazing, snow everywhere, northern lights every single night.”

Can you tell us a small anecdote concerning your time in Kiruna?

Lisa & Corentin: “The day after our arrival, we suddenly left the dinner to rush outside and see our first aurora borealis. To admire them better, we decided to make a small hike on the Kiruna Mountain. The climb took more than 2 hours, we had lost the way and the wind was getting colder and colder. Finally, we arrived at the top and could admire the northern lights without light pollution. This moment was completely magic.”

Are you planning to remain involved in the UNIVERSEH project and will you be keeping in touch with the Winter School crew?

Lisa: “I hope! We still have an oral to take and a quiz to complete. But I hope to somehow stay in touch with the students and the school!”

By Gregory Voss and Kimberly Houser

What the Cambridge Analytica debacle and the resulting U.S. Senate hearing revealed in no uncertain terms is that the U.S. does not have adequate data privacy laws. Despite the grandstanding by Senators, they demonstrated a lack of understanding of not only the workings of the data economy, but also of the laws of their own country.

When the EU General Data Protection Regulation (GDPR) became applicable on May 25, 2018, the disparity between the laws in the U.S and those in the EU became very apparent. In our working paper, GDPR: The End of Google and Facebook or a New Paradigm in Data Privacy?, slated for the fall edition of the Richmond Journal of Law and Technology, we explore these differences in terms of ideology, enforcement actions, and the laws themselves.

The American tech business model is to provide services free of charge in exchange for a user’s personal data. This comports with the data protection law in the U.S., which is sector specific, meaning only certain types of data, such as medical and financial data, are protected but only to the extent provided in the applicable statute. There is no omnibus U.S. federal data privacy law relating to the private sector. While the Federal Trade Commission (FTC) is the de facto privacy authority in the U.S., its history of enforcement actions against U.S. tech companies is quite limited. Historically, it has only been when a company provides a privacy policy and then fails to comply with it that the FTC has taken action against it under Art. 5 of the FTC Act regarding ‘deceptive and unfair practices’.

The European model of data privacy is based on a human rights foundation, with both privacy and data protection being fundamental. Under the predecessor to the GDPR (the 1995 Directive), numerous actions were brought against U.S. technology companies for violations of EU member state laws. Despite this long history of successful enforcement actions, these U.S. tech companies have not significantly changed their business model with respect to data obtained from the EU due to the low maximum fines under the member states’ laws (eg, a €150,000 fine in France for a company valued at €500 billion).

The American ideology behind data privacy is the balancing of an entity’s ability to monetize data that it collects (thus encouraging innovation) with a user’s expectation of privacy (with those expectations apparently being quite low in the U.S.). In the EU, the focus is on protecting a users’ privacy. A great example of this dichotomy is the Google Spain case. A Spanish citizen sought to have certain information removed from a Google search as permitted under EU law. Google objected to this in court. On the one hand was freedom of speech (paramount in the U.S.) and the public right to know asserted by Google, and on the other, the European’s right to privacy and to be forgotten argued by the European plaintiff. The European Court of Justice ruled that the balancing of interests tipped in favor of privacy for the Spaniard.

As we explain in our paper, U.S. federal laws are sector-specific with the primary areas being covered in the Health Insurance Portability and Accountability Act (health care information), the Gramm-Leach-Bliley Act (financial information) the Fair Credit Reporting Act (credit information) and the Children’s Online Privacy Protection Act (children’s information). In addition, states have also enacted varying data security laws aimed at requiring data breach notifications.

The European approach, on the other hand, has always been more overarching. The 1995 Directive, for example, required each EU member state to adopt comprehensive privacy protection laws meeting the objectives of the Directive. While the adoption of a directive allowed flexibility in each member state’s creation of its own privacy laws, in 2012, the European Commission determined that the law needed to be updated. The GDPR was enacted to: provide harmonization of the member states’ laws, incorporate advances in technology, eliminate administrative filing burdens for companies, and, as we posit in our paper, level the playing field for technology companies using the personal data of those located in Europe.

Because U.S. companies have been able to monetize their data with very few restrictions or consequences, they were able to become behemoths in the tech field with an 80% market share for Facebook and 90% market share for Google. The rules, however, have now been updated with respect to EU data. The GDPR requires, among other things, verifiable consent prior to using a user’s data and consent for each secondary use. There is no corresponding requirement in the U.S.; companies operating under U.S. law primarily rely on an opt out mechanism and are not required to disclose secondary uses of your data. The GDPR also provides a right to be forgotten, a right to data portability, the ability to opt out of automated machine decisions (profiling), and requires a lawful basis for processing data. None of these rights are afforded to U.S. citizens under U.S. federal law.

Because the GDPR is extraterritorial in scope, the law will apply regardless of where a company is located if it collects or processes the personal data of those located in Europe, where processing relates to the offering of goods or services (either for pay or “free”) to such “data subjects,” or to the monitoring of their behaviour, to the extent such behaviour takes place in the EU. This leaves us with the question: will the GDPR be the end of Google and Facebook or present a new paradigm in privacy protection? This remains to be seen. However, given that fines may now be assessed in the billion-euro range under the GDPR rather than the thousand-euro range of the past, it does seem likely that the U.S. business model (data for service) will need to adapt, at least with respect to data from the EU.

This article originally appeared on the Oxford Business Law Blog.



Innovation as the key driver of economic growth is nothing new. However, France, with the rest of Europe, continues to face significant challenges in stimulating innovation in its economy and maintaining its competitive edge.

In a study investigating what discourages French firms from innovating, we find that the biggest barriers to innovation are financial or market-related, and not technological. Financial constraints, lack of competent personnel and a perceived pointlessness of innovating are some of the main culprits behind this lag in innovation. Surprisingly, very few firms cited technological barriers, and similar results have been observed in other parts of the world.

The right skill-mix

Taking a closer look, we observe that many of the obstacles can be traced back to a shortage of managers with the relevant skill set. Various innovation studies point out that innovation success requires the effective combination of different expertise, both technical and commercial. However, managers with both attributes are rare, especially in France. And the absence of versatile managers can result in conflicting viewpoints between technical managers who tend to be preoccupied with technological performances and commercial managers who tend to be focused on market concerns. This in turn can lead to a communication breakdown and cooperation failure, impeding the innovation process.

Add to this, the prevalent culture of “technology push” innovation in France, where by innovation processes are spearheaded by R&D in new technologies but are plagued by a poor understanding of the market. This not only reinforces market barriers to innovation but also leads to financial constraints. Substantial resources end up being pumped into and prolonging the R&D phase, blurring the distinction between inventing something, innovation and achieving innovation success. The development of the Concorde is a good illustration of this. To date there are ongoing debates on whether the supersonic airliner was an innovation success or not. For some, the technological breakthroughs overshadow the fact that only 14 units were sold to two clients. In short, firms are discouraged from innovating because innovation, from their perspective, necessitates considerable resources to cover the excessive costs of invention.

Impact of government support

In Europe and notably in France, public authorities are wrapped up with technological progress leaving little room for commercial expertise in the innovation process. Inventions and discontinuous technologies are favored, often out of sync with market dynamics, and very costly. Too often public funding programs, for instance in the aerospace sector, push firms to undertake projects that are not always economically viable. Thus, firms tend to orientate their strategies on technological advances, to the detriment of market objectives, essential for anticipating returns on investment.

Contextual factors

Breaking down the obstacles by industry, the aerospace industry faces the highest obstacles, followed by the manufacturing and service industries. This is expected as aerospace companies are more likely to be innovative, face high productions costs and heavily rely on public investment. In contrast, firms in the service industry experience the fewest obstacles. The development of new-to-world products is rare in the service industry, where the intangibility of products allows for easy imitation by rival firms and thus raises a serious problem in convincing investors to fund new ventures. Service orientated firms therefore tend to adopt a market pull strategy with focus on continuous innovations, marginally enhancing or upgrading the service offering, and at a much lower cost. It is therefore not surprising that firms in this sector face the lowest financial barriers to innovation.

Overcoming barriers to innovation

As a starting point, firms should accommodate market research in their innovation processes. This is easier said than done as technical managers sometimes first need to move away from the idea that if you don’t know how to make a product, you won’t know how to sell it. Technical managers need to recognize the importance of bringing in the market perspective on board the innovation process. To combat the shortage of managers with both technical and business skills, firms could offer on-the-job training to develop deficient competencies (e.g. granting MBA opportunities to technical managers). Moreover, to tackle the root of the problem, higher learning institutions offering scientific degrees should integrate a strong element of social sciences in their programs. This would not only ensure a commercial dimension in the innovation process but may also go a long way to solving communication issues between technical and commercial teams, and add legitimacy to marketing insights.

However, this is not a substitute for involving commercial managers directly in the innovation process. Ideally, firms should go a step further and create a business intelligence unit to provide information on the market, to work side by side and complement the work of the technological team. The weight accorded to commercial competencies in the innovation process will vary according to the characteristics of the activity sector.

A fundamental change will also have to come from the public authorities who need to redirect their funding to support successful innovations rather than novel technologies, and allow firms to focus on continuous innovation – the natural course for most. By prioritizing downstream innovation processes, such as innovation commercialization, firms will face lower market barriers and innovation costs. To this end, public authorities need to make more room for firms in defining the strategic orientation of public support policies.
Innovation is a powerful means by which to ensure long-term survival. Without innovation, it is extremely difficult to adapt to a changing environment. Although new product failure is high, innovation without any failure is impossible. In a nutshell, successful innovation requires not only a change in the mindset and innovation culture of firms but also shifts in the public institutional framework to be more in favor of continuous innovation. Firms, government agencies, higher education institutions all have a role to play in overcoming barriers to innovation and creating an enabling environment for innovation.

This article is based on the study entitled, “Les obstacles à l’innovation en France : analyse et recommandations ”, co-authored by Victor Dos Santos Paulino and Najoua Tahri, published in Management & Avenir, 2014/3, no. 69, p. 70 – 88, available here


The study, conducted in 2014, is based on the results from the 4th Community Innovation Survey (CIS 4) carried out in France between 2002 and 2004 and published by Eurostat. 175,533 firms in France participated in the survey, indicating if they have experienced any of 11 obstacles to innovation. For the purposes of our study, we then divided the obstacles into four categories: knowledge, market, financial and external obstacles, and analyzed the obstacles by nature of the firm and by sector (manufacturing, services and aerospace, the latter being a key industry in France).

By Pierre-André Buigues

Despite significant state aid, the French meat sector is losing ground against other European countries which are also in the Eurozone. Indeed, it’s the European market which has caused the deterioration of France’s position, and not globalisation, China, or other emerging economies.

No matter which sector we look at – poultry, pork or cattle – French meat farmers are in difficulties compared with their European competitors.
The French pork market : Production is markedly down, from 25.5 million pigs a year in 2000 to 21 million in 2016. Over the same period, it went up in several other European countries. In 2000, France and Spain were producing pigs at the same rate, whereas today Spain is producing 46 million pigs a year. France is now a net importer of pork products. The sector’s competitiveness has been eroded due to high costs and lack of investment.
The French cattle industry : France was the biggest European producer of beef in 2015: 1.49 million tons compared with Germany’s 1.12 tons and the UK’s 0.9 tons. 79% of the meat consumed in France was also produced there. Imports are essentially European. However, the average income of cattle farmers is among the lowest in the farming sector and is projected to decline steeply. In 2014, a typical cattle farmer’s earnings after tax were 22% below the average over an extended period (2000-2013).
The French poultry sector has also seen a drop in production over the last decade. France used to be the second biggest exporter of poultry in the world, but today it imports 40% of the poultry it consumes. The country has a trade deficit with other European countries in terms of both volume and value, and this deficit continues to deepen. The majority of French imports come from other European countries, with far less coming from non-European countries like Brazil or the USA.

Why are we seeing such a serious deterioration in the French meat sector?
We will look at the two main factors behind the decline: Le refus français d’une industrialisation de la filière viande, d’où des économies d’échelle insuffisantes.
France’s resistance to the industrialisation of its meat sector, and hence insufficient economies of scale: France has always supported family farms but the international meat markets are high-volume markets where price is the determining factor. Unlike the French domestic market where quality is highlighted by labels (red label – farm quality) and constitutes a competitive advantage, on the international market, price is key. While Germany has positioned itself as a producer of cheap and standardised meat products with an “industrial” image, France has a “gourmet” image and premium products. Unfortunately, at this stage in its development, the international meat market, whose growth is being powered by emerging countries, has little interest in quality. Cost is therefore the strategic variable for success on the international markets, so the French sector is paying the price for high costs and an absence of economies of scale.

In the pork production sector, the average size of a pig farm in France is between 1,000 and 2,000 pigs, as against Denmark and Holland, whose farms average 2,000 to 5,000 pigs. Moreover, between 2000 and 2010, the average size of a pig farm has grown by 98% in Denmark, by 37% in the Netherlands, by 29% in Spain and by only 16% in France. Finally, German abattoirs often exceed 50,000 pigs slaughtered annually. In France, what is needed is far fewer abattoirs and comprehensive modernisation.

In the beef and lamb sector, France is likewise suffering from the small size of its farms. The lawsuit taken against the only French farm with 1,000 cows (ultra-modern farm with a giant facility to produce energy from cattle waste via a methanizer and fitted with solar panels), shows how hostile French public opinion is towards industrialised farming.

In poultry production, French farms are far more numerous and also far smaller than German ones: German, Dutch and British poultry farms are the biggest in Europe, with an average volume above 60,000. In France, more than half of all poultry farms have a capacity of between 1,000 and 10,000, because of the importance of quality and origin labels (Red Label, organic, Appellation d’Origine Contrôlée), whose product specifications limit the size of buildings.

With farm sizes which don’t allow for economies of scale, and with labour costs well above some of its European competitors, the French animal agriculture sector is in great difficulty and is losing market share.

An avalanche of costly production standards and over-regulation compared with European norms

Stringent regulation is an indisputable factor in the economic difficulties facing the French meat sector. (2)
Often complicated and sometimes incomprehensible, these regulations place a very heavy administrative burden on farmers. A Senate report estimated that an average farmer spends 15 hours a week on office work. There are two main reasons for the relatively high cost of these production standards in France.

First and foremost, farms in France are, as we have seen, smaller than in European competitor countries. They therefore don’t possess the human or financial means to assimilate and implement these standards. Second, regulations often change in this sector, environmental standards are more and more exacting and require significant investment.

What does the future hold for French meat farming?

European farming is no longer just a sector regulated by the Common Agricultural Policy, but a competitive sector. In order to develop French meat farming, there are two possible strategies:
Strategic development of a quality-oriented farming sector : How can we find enough outlets for a high-end product with strong export branding to allow small farms to survive with high costs? There is a model in the French wine sector where prices are, on average, twice as high as the competition, and yet which still hold their own. This “high-end” strategy could save French farming. However, it will involve considerable investment in marketing and the international distribution chain.
Strategic development of intensive, low-cost farming : How can production costs be reduced? By heavy restructuring, and the elimination of uncompetitive “small farms”. Massive investment would also be needed to create ultra-modern farms, with state agencies fostering fully automated mega-farms – a far cry from today’s situation.
Is there a middle way? Xavier Beulin, former president of the FNSEA (the French farmers’ union) has estimated that investment to the tune of 6 billion Euros will be needed “to develop a third way between industrial farming and diversity, high-tech and diversified farming, organic and robotic farming”.


Elie Cohen et Pierre-André Buigues « Le décrochage industriel », Fayard, 2014; and Pierre-André Buigues, « Refonder l’agriculture française » Journée de l’économie, Jeco , Lyon, Novembre 2016

By Pierre-André Buigues and Denis Lacoste

French car-makers exported fewer and fewer cars over the course of the first decade of the 2000s. At the start of the 2000s, PSA was exporting 54% of its French production and Renault 47%.

Ten years later, that percentage had dropped by over 20 points for PSA; Renault’s case is even more critical since the company has even started importing vehicles to France. Today, Renault now produces fewer vehicles in France than it registers! And France now has a significant trade deficit in the car sector; the last surplus was in 2004!

Does this mean that French manufacturers have become less international in their reach?

Absolutely not. Indeed, during this same period, French manufacturers invested heavily in building assembly plants abroad. In the early 2000s, the number of cars manufactured by Renault and PSA abroad represented about 70% of domestic production. In 2010, the ratio of foreign production to domestic production was close to 170% for PSA and almost 300% for Renault.
One might think that these developments are related to macroeconomic and monetary conditions in the Eurozone. However, when you look at the development of German car-manufacturers’ strategies over the same period, it is clear this is not the case. Between 2000 and 2010, we can see that Volkswagen’s exports remained stable while Mercedes and BMW’s exports rose.

Why did delocalized production replace export?

Specialists in business strategy generally agree that the choices made for an international development strategy are determined by two key factors: the company’s competitive advantages and the economic conditions affecting production in the home country.

The competitive advantages of French manufacturers. . Basically, industrial companies can choose between strategies based on low production costs or differentiation strategies based on technological innovation. A low-cost strategy drives companies to delocalize a significant part of production to low cost countries. On the other hand, a differentiation strategy generally goes hand in hand with increased exportation, because the competitive advantage is based on R & D and hence on the high-level expertise that is only available in developed countries. Companies that opt for a low-cost strategy will look abroad for cheap labor whereas those who base their strategy on differentiation will be less affected by the higher production costs linked to domestic production and can draw on the positive effects of the interaction between production and R & D.

In the case of the car industry, there are considerable differences between the innovation strategies of French companies – which seek to set up production abroad – and German companies, which maintain a high level of exports. At the start of the 2000s, Volkswagen was already investing more than twice as much as Renault and PSA in research, and in 2010, Volkswagen’s research budget was three times greater. If we specifically look at the R&D content of each vehicle sold, there is naturally a quite significant technology input with high-end manufacturers like Mercedes and BMW (more than €2,000 per vehicle), but this is the case even with mid-range manufacturers; the R&D content in a Volkswagen car is 20% higher than that of Renault and 45% greater than that of PSA. Again, the gap widened during the first decade of the 2000s; the increase in R&D expenditure per vehicle is significantly higher in German-made cars compared to French-made cars.

The economic conditions in France The more or less favorable domestic business environment, particularly in terms of cost, also has an impact on their choices in terms of international development. What about the French car industry? What are the differences between the French and German environments? If we look at things on a very general level, we see that the hourly labor costs for manufacturing in general increased by 38% in France, compared with only 17% in Germany, during the first decade of the 2000s. If we look closer at the car sector, we can note that productivity per employee was lower in Germany than in France in 2000, but that productivity increased sharply over the decade in question, while it decreased in France. In 2008, employee productivity was 25% higher in the German car industry compared to France. This can be explained by the fact that French car manufacturers have made little investment in France, their priority being their overseas factories.

Even though we may bemoan the extremely negative consequences in terms of employment and the creation of wealth in France, French car manufacturers made strategic choices that are coherent in terms of international development in view of their low R&D expenditure, their medium- and low-end positioning and the unfavorable domestic production conditions in terms of cost. However, it is not surprising that French manufacturers’ profit margins are lower than those of their German counterparts. For example, over the period 2000-2010, the operating profit per car was €635 for VW and around €250 for Renault and PSA.

Is this specific to the car industry in France?

Unfortunately for French international trade and the employment market in France, the car sector is not an isolated case. France has far fewer companies that export than Germany, and the share of exports in French GDP is almost two times lower. On the other hand, France has more large multinationals than Germany (14 companies in the world’s top 100 compared with 10 for Germany) and these French multinationals have a larger proportion of their workforce abroad than their German counterparts.

Consequently, for France to become an “export country” once again, it would take a radical change in the strategic positioning of companies located in France as well as more favorable production conditions in the country.

Written by P.A. Buigues and D. Lacoste. The information in this text is taken from the following articles: “Les déterminants des stratégies internationales des constructeurs automobiles européens : exportation ou investissements directs à l’étranger” (Determining factors in the international strategies of European car manufacturers: exportation or direct investment abroad? ”), published in 2015 in the magazine “Gérer et Comprendre”, written by the authors in collaboration with M. Saias M, and “Les Stratégies d’internationalisation des entreprises françaises et allemandes : deux modèles d’entrée opposés” (International business development strategies of French and German companies: two opposite input models), written by the authors and published in “Gérer et Comprendre” in 2016, as well as their book “Stratégies d’Internationalisation des entreprise” (International Business Development Strategies), published in in 2011 by De Boeck.


The database was essentially built using information published by the manufacturers in their annual reports, as well as data provided by the French Automobile Manufacturers’ Committee (CCFA), the International Organization of Motor Vehicle Manufacturers (OICA) and by Eurostat. The data relating to international business development, strategies and economic conditions were analyzed over the entire 2000-2010 period.

Practical applications

This study shows that any assessment of a company’s choice in terms of international development cannot be cannot be conducted without analyzing other aspects of its strategy (particularly in terms of positioning) and the economic conditions in the company’s home country. The study also suggests that foreign investments are not necessarily the best way forward in terms of international development. The case of the car industry shows that it is possible for a company to keep a significant part of its production in its home country while remaining efficient, even in a global industry.

By Stéphanie Lavigne

Quite unexpectedly, those European companies which invest the most in Research & Development (R&D) are also those whose majority shareholders are institutional investors (and particularly pension funds located in English-speaking countries) whereas we expected to find so-called ‘strategic’ investors (the State or families) that are generally believed to support a company’s growth policy and therefore also its innovation policy.

The advent of institutional investors in the 1990s led to a radical change in equity breakdown in European companies. Today, 50 to 60% of the capital of European groups listed on the stock exchange is held by pension funds and mutual funds (which manage other peoples’ money). Now, as leading shareholders, they have imposed their own governance principles and value creation strategies, demanding about 15% return on investment for the households whose savings they manage.

To achieve this level of return, companies are implementing financially-driven strategies with shorter investment periods, so that they can deliver ever-increasing dividends to their shareholders on a yearly or even a six-monthly basis. But is this short period of time compatible with a given company’s growth and with its R&D policy in particular?

Relationship between share ownership and R&D policies

In this study, we have tried to establish a relationship between the equity breakdown and innovation policies of major European companies.

A review of empirical studies undertaken so far reveals that they relate almost entirely to the North American market and yield contradictory results. Two opposing theories have emerged regarding the influence of institutional investors: one of the theories asserts that these investors believe in short-term profitability only and do not encourage high-risk innovation policies; the second theory, on the other hand, acknowledges the control exercised by these investors and their positive influence on innovation policy, which ensures the company’s long-term profitability.

Our study shows that in Europe, the more companies’ shares are held by institutional investors the more they spend on R&D whereas we were expecting to find strategic investors such as governments or families that are known to support companies with patient growth policies. It seems that the crucial factor is the investment period of these institutional investors: the longer the period, the greater the likelihood of the company committing to an innovation policy. This may seem insignificant, but the findings have never before been demonstrated in a multinational context (a sample of 324 European companies) over such an extended period of time (tests between 2002 and 2009).

“Patient” investors versus “impatient” investors

One of the major conclusions of our study highlights the detrimental effect of short-term investor attitudes on the innovation strategies of companies, which actually need the support of long-term investors in order to carry out their R&D policies.

When analyzing how the investment period influences the innovation strategies of European companies, we compared companies having short-term or “impatient” investors (with an investment period of less than 18 months) as majority shareholders with companies where long-term or “patient” investors are the majority shareholders. Our findings show that R&D spending is higher when the majority shareholders are patient investors and lower when most of the company’s capital lies in the hands of impatient investors.

This article was written by Stephanie Lavigne and the article “Ownership structures and R&D in Europe: the good institutional investors, the bad, ugly and impatient shareholder”, co-authored by Olivier Brossard and Mustafa Erdem Sakinc, published in Industrial and Corporate Change (Volume 22, Number 4) – Oxford University Press, 5 July 2013.

Practical applications

Our study of equity breakdown and the innovation strategies of European companies shows that we should not be disparaging about institutional investors but focus on the crucial issue of how long they leave their investments in companies.
With this in mind, companies must learn to identify the investment period of any new institutional investors promptly in order to build a privileged relationship with them and attempt to offset any short-term investors.


In our research, we conducted an empirical study of the relationship between the equity breakdown and innovation policies of leading European companies. We analysed a sample consisting of the 324 most innovative European companies (as listed on the EU Industrial R&D Investment Scoreboard between 2002 and 2009) and compared their R&D expenditure against financial and shareholding data obtained from the Thomson Financial data base.