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on Technology and Industrial Dynamics |
| By: | Daron Acemoglu; Pascual Restrepo |
| Abstract: | We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production—due to automation and new tasks—can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades. |
| JEL: | J23 J24 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25684&r=all |
| By: | KIM YoungGak; MOTOHASHI Kazuyuki |
| Abstract: | RIETI conducted the Survey of Big Data Use and Innovation in Japanese Manufacturing Firms in 2015. This paper uses this survey data, linked with TSR data of inter-firm transactions, to examine the relationship between supplier and customer (business partner) network structures and the data sharing with these business partners. It is found that, in general, the number of suppliers is positively correlated with the likelihood of internal use of data and data sharing with suppliers, customers, and other third-party firms. On the contrary, the number of customers is negatively correlated with data use and sharing, especially with customers. The analysis results also show that long-term relationships with suppliers contribute negatively to data sharing, but contribute positively to data sharing with customers. Interestingly, the more customers a firm's suppliers have, or the more suppliers a firm's customers have in their transaction networks, the less likely it is that the firm shares big data with other third-party firms. We find that data sharing has a positive and significant impact on firm productivity. However, we find no positive contribution of data sharing to attracting new customers or suppliers. We do not find any significant effect of data sharing on the extensive margin of transactions. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19016&r=all |
| By: | MOTOHASHI Kazuyuki |
| Abstract: | Digitalization has a transformative impact on innovation in firms and industry. In this paper, the results of the Survey on the Changing Nature of Manufacturing Processes and New Product Development are presented to show how the nature of Japanese SMEs in manufacturing industry is changing in the new IT era (AI, big data and IoT). It is found that a firm applying new IT, such as data analytics by machine learning, is likely to be involved in delivering digital services as well as new products (servitalization) and innovation ecosystem, interacting with multiple firms. Such firms address wider customer needs, instead of just meeting existing customer requirements, meaning that its product innovation is likely to happen in new business fields. In addition, a firm which extensively uses its customer data gains more sales and profit contributions from its new product. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:polidp:19005&r=all |
| By: | Marcel Bednarz; Tom Broekel |
| Abstract: | Knowledge diffusion is argued to be strongly influenced by knowledge networks and spatial structures. However, empirical studies primarily apply an indirect approach of measuring their impact. Moreover, little is known about how policy can influence the spatial diffusion of knowledge. This paper seeks to fill this gap by empirically testing the effects of policy induced knowledge networks on the propensity of inter-regional patent citations. We use patent citation data for 141 labor market regions in Germany between 2000 to 2009, which is merged with information on subsidized joint R&D projects. Based on the latter, we construct a network of subsidized R&D collaboration. Its impact on inter-regional patent citations is evaluated with binomial and negative binomial regression models. Our findings do not indicate that inter- regional network links created by public R&D subsidies facilitate patent citations and hence, inter-regional knowledge diffusion. |
| Keywords: | knowledge diffusion, subsidized R&D-networks, gravity model, negative binomial regression, proximity, spillover |
| JEL: | L14 O18 O33 O38 C31 D83 O18 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1908&r=all |
| By: | Okamuro, Hiroyuki; Nishimura, Junichi |
| Abstract: | Regional innovation policies have been implemented in several countries. In Japan, controlled decentralization of traditionally centralized innovation policy is ongoing, so that we can observe multilevel policy mix of public R&D subsidies by national, prefecture and city governments. Based on original survey data and financial data of manufacturing SMEs, we empirically estimate their TFP (Total Factor Productivity) and investigate the effects of public R&D subsidies by national, prefecture and city governments. We employ firm-level fixed effect panel estimation in order to control for the effects of any time-invariant factors. We find that only the prefecture subsidy has a positive and significant impact on the TFP of recipient firms, while interactive effect with city subsidy is also positive and significant, if we consider remaining effects after subsidy period. These results suggest that multilevel policy mix of R&D subsidies significantly increase recipients' productivity and that this effect if durable. |
| Keywords: | R&D subsidy, local authority, multilevel policy mix, SMEs, policy evaluation |
| JEL: | H71 O38 R58 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:70&r=all |
| By: | Nesta, Lionel; Verdolini, Elena; Vona, Francesco |
| Abstract: | This paper analyzes the effect of environmental policies on the direction of energy innovation across countries over the period 1990-2012. Our novelty is to use threshold regression models to allow for discontinuities in policy effectiveness depending on a country's relative competencies in renewable and fossil fuel technologies. We show that the dynamic incentives of environmental policies become effective just above the median level of relative competencies. In this critical second regime, market-based policies are moderately effective in promoting renewable innovation, while command-and-control policies depress fossil based innovation. Finally, market-based policies are more effective to consolidate a green comparative advantage in the last regime. We illustrate how our approach can be used for policy design in laggard countries. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2018–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemci:268731&r=all |
| By: | Besstremyannaya, Galina; Dasher, Richard; Golovan, Sergei |
| Abstract: | A considerable amount of research has shown that a carbon tax combined with research subsidies may be regarded as optimal policy for encouraging the spread of low-carbon technologies for the benefit of society. The paper exploits the macroeconomic approach of endogenous growth models with technological change in order to make a comparative assessment of the impact of such policy measures on economic growth in the US and Japan in the medium and long term. Our estimates reveal several important differences between Japanese and US energy firms: lower elasticity of the innovation production function in R&D expenditure, lower probability of radical innovation, and predominance of dirty technologies in Japan. This may explain our quantitative findings of stronger reliance on carbon tax in Japan as opposed to research subsidies in the US. |
| Keywords: | endogenous growth,technological change,innovation,carbon tax,energy |
| JEL: | O11 O13 O47 Q43 Q49 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:797&r=all |
| By: | Simone Lenzu (NYU Stern); Francesco Manaresi (Bank of Italy) |
| Abstract: | Using micro-data on firm-specific borrowing costs and wages, we demonstrate that distortions in firms’ policies can be empirically measured using firm-level gaps between marginal revenue products and user costs (MRP-cost gaps). We estimate MRP-cost gaps for 4.7 million firm-year observations in Italy between 1997 and 2013: their variation is closely related to the extent of credit and labor market frictions. Using the MRP-cost gaps, we assess the scope of input misallocation in Italy, and its impact on aggregate output and total factor productivity (TFP). The Italian corporate sector could produce 6% to 8% more output by reallocating resources toward higher-value users. Output losses from misallocation are larger (i) during episodes of financial instability, (ii) in non-manufacturing industries, (iii) in areas with less developed institutions and (iv) among high-risk firms. We highlight an important gain/risk tradeoff: gains from reallocation might come at the expense of increasing aggregate financial fragility, because maximizing reallocation gains requires a transfer of resource from large, old, and low-risk firms toward small, young, and high-risk firms. |
| Keywords: | total factor productivity, economic development, policy distortions |
| JEL: | O16 O40 E24 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_485_19&r=all |
| By: | De Ridder, M. |
| Abstract: | Productivity growth has stagnated over the past decade. This paper argues that the rise of intangible inputs (such as information technology) can cause a slowdown of growth through the effect it has on production and competition. I hypothesize that intangibles create a shift from variable costs to endogenous fixed costs, and use a new measure to show that the share of fixed costs in total costs rises when firms increase ICT and software investments. I then develop a quantitative framework in which intangibles reduce marginal costs and endogenously raise fixed costs, which gives firms with low adoption costs a competitive advantage. This advantage can be used to deter other firms from entering new markets and from developing higher quality products. Paradoxically, the presence of firms with high levels of intangibles can therefore reduce the rate of creative destruction and innovation. I calibrate the model using administrative data on the universe of French firms and find that, after initially boosting productivity, the rise of intangibles causes a 0.6 percentage point decline in long-term productivity growth. The model further predicts a decline in business dynamism, a fall in the labor share and an increase in markups, though markups overstate the increase in firm profits. |
| Keywords: | Business Dynamism, Growth, Intangibles, Productivity, Market Power |
| Date: | 2019–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1931&r=all |
| By: | Comin, Diego; Licht, Georg; Pellens, Maikel; Schubert, Torben |
| Abstract: | Among available policy levers to boost innovation, investment in applied research organisations has received little empirical attention. In this paper, we analyse the case of the Fraunhofer Society, the largest public applied research organization in Germany. We analyse whether project interaction with Fraunhofer affects the performance and strategic orientation of firms. To that end, we assemble a unique dataset based on the confidential Fraunhofer-internal project management system and merge it with the German contribution to the Community Innovation Survey (CIS), which contains panel information on firm performance. Using instrumental variables that exploit the scale heteroscedasticity of the independent variable (Lewbel, 2012), we identify the causal effects of Fraunhofer interactions on firm performance and strategies. We find a strong, positive effect of project interaction on growth in turnover and productivity. In particular, we find that a one percent increase in the size of the contracts with FhG leads to an increase in growth rate of sales by 1.3 percentage points, and to an increase in the growth rate of productivity by 0.8 percentage points in the short-run. We also provide evidence of considerable long-run effects accumulating to 18% growth in sales and 12% growth in productivity over the course of 15 years. More detailed analyses reveal, amongst others, that the performance effects become stronger the more often firms interact with Fraunhofer and that interactions aiming at generation of technology have a stronger effect than interactions aiming merely at the implementation of existing technologies. Finally, we provide evidence on the macroeconomic productivity effects of Fraunhofer interactions on the German economy. Our results indicate that doubling Fraunhofer revenues from industry (+€ 0.68 bn.) would increase overall productivity in the German economy by 0.55%. |
| Keywords: | innovation,R&D,diffusion,applied research,Fraunhofer |
| JEL: | O33 O38 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19006&r=all |
| By: | Max Nathan; Anna Rosso |
| Abstract: | We take a fresh look at firms' innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental metrics - new product/service launches - for a large panel of SMEs. Extensive validation and descriptive exercises show that launches complement patents, trademarks and innovation surveys. We also establish connections between launches and previous innovative activity. We then link IP, launches and productivity, controlling for media exposure and firm heterogeneity. Launch activity is associated with higher SME productivity, especially in the service sector. High-quality launches and medium-size firms help drive this result. |
| Keywords: | innovation, productivity, ICT, data science |
| JEL: | L86 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1607&r=all |
| By: | Taalbi, Josef (Department of Economic History, Lund University) |
| Abstract: | There are important unresolved questions about long-term trends of in- novation activity and the nature of the interplay between innovation and economic development and transformation. This study explores the promise of a literature-based innovation output indicator, constructed for the Swedish engineering industry, 1909-2016. The findings suggest a long-run increasing trend in innovations per capita. Meanwhile, product innovations have also become more complex and it is suggested that crude innovation counts underestimate the long-run innovation performance. In order to analyse innovation and economic development across different frequencies, the study uses a wavelet decomposition approach. The results suggest that innovation activity has surged in periods of intense industry rationalization and struc- tural crisis (1930s, 1970s and 2010s) and that such pulses were intimately connected to the second and third industrial revolutions. |
| Keywords: | Innovation; Wavelet analysis; Technological systems |
| JEL: | N13 O14 O31 |
| Date: | 2019–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0196&r=all |
| By: | ADACHI Yusuke; OGAWA Hikaru; TSUBUKU Masafumi |
| Abstract: | This paper presents a new approach to estimating changes in firm productivity. Particular focus is placed on how productivity changed before, during, and after recessions accompanied by crises, using micro data on Japanese manufacturing firms. We depart from the traditional method of comparing (weighted) average productivity before and after a crisis and apply the quantile approach, which estimates the changes in the productivity distribution of surviving firms. The main results indicate that crises have different impacts on firms with different initial productivity levels. First, when productivity improves the industry as a whole, productivity growth is relatively high for firms with lower productivity. Second, in the event of major crises, the productivity decline is more pronounced for firms with lower productivity, whereas the impact on firms with higher productivity is relatively small. Finally, the productivity level required to survive in the market did not rise at the times of crisis and therefore we did not find that firms with low productivity were particularly forced to withdraw from the market. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19015&r=all |
| By: | Lim, Sunghun |
| Abstract: | Can the modern-day developing economies leapfrog manufacturing sector to directly to service sector through the global agricultural production? Global value chains (GVCs) has changed the nature of production around the world. Especially, the rise of global value chains (GVCs) in agriculture has been a salient feature of the world economy over recent years. Despite their importance for the world economy, it is, however, unclear whether participation in GVCs leads the structural transformation ─ that is, the move from an economy primarily based on agriculture to an economy primarily based on manufacture, and then on service. In this paper, I investigate the impact of the participation of GVCs in the agricultural sector on structural transformation in countries by using cross-country panel data for 183 countries (including 48 African countries) from 1990 to 2013. By using country-fixed effects, I find that in response to greater agricultural value chains participation, manufacturing employment remains stable, but employment in the services sector increases. In other words, modern-day developing economies are leapfrogging manufacturing to directly develop their services sector through GVCs in agriculture. This result is strongly and significantly robust to various model specifications with year fixed effects, regional-specific fixed effects, and time monotonicity. Also, by using alternative measures of structural transformation such as GDP shares by sectors or female employment shares, the results are still strongly robust. I measure the extent of agricultural GVCs by adopting the recent method by Wang et al. (NBER, 2017) at the country level. I control for agricultural trade policies, domestic policy to agriculture as well as agricultural land areas, urban population growth, and demographic structure of countries. This is an important result by providing the original evidence that the agricultural GVCs participation has played a significant role in economic development in the world. |
| Keywords: | International Development |
| Date: | 2019–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaesp:285103&r=all |