nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒06‒17
thirteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Technology, Skills, and Globalization: Explaining International Differences in Routine and Nonroutine Work Using Survey Data By Piotr Lewandowski; Albert Park; Wojciech Hardy; Du Yang
  2. Digitalization, routineness and employment: An exploration on Italian task-based data By Valeria Cirillo; Rinaldo Evangelista; Dario Guarascio; Matteo Sostero
  3. Creativity-Enhancing Technological Change in the Production of Scientific Knowledge* By Link, Al; Scott, John
  4. The Industry Anatomy of the Transatlantic Productivity Growth Slowdown By Gordon, Robert J; Sayed, Hassan
  5. Technical progress and structural change: a long-term view By Nuvolari, Alessandro; Russo, Emanuele
  6. Sources of Labor Productivity Growth in the German Brewing Industry By Giannis Karagiannis; Magnus Kellermann; Klaus Salhofer
  7. Baumol versus Engel: Accounting for 100 years (1885-1985) of Structural Transformation in Japan By Fukao, Kyoji; Paul, Saumik
  8. Structural Change, Capital Deepening, and TFP Growth in Japan: 1885-1970 By Fukao, Kyoji; Makino, Tatsuji; Settsu, Tokihiko
  9. Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces By Jonathan Eberle; Philipp Boeing
  10. Tax Policy for Innovation By Bronwyn H Hall
  11. Sustainability strategies, investments in industry 4.0 and cicular economy results By Valentina De Marchi; Eleonora Di Maria
  12. Concordance and Complementarity in IP Instruments By Marco Grazzi; Chiara Piccardo; Cecilia Vergari
  13. Technology Transfer at the U.S. National Institute of Standards and Technology (NIST) By Link, Al

  1. By: Piotr Lewandowski (Institute for Structural Research, Warsaw, and IZA, Bonn); Albert Park (Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Wojciech Hardy (Institute for Structural Research (IBS), Warsaw, and Faculty of Economics, University of Warsaw); Du Yang (Chinese Academy of Social Science (CASS), Beijing)
    Abstract: The shift away from manual and routine cognitive work, and towards non-routine cognitive work is a key feature of labor markets. There is no evidence, however, if the relative importance of various tasks differs between workers performing seemingly similar jobs in different countries. We develop worker-level, survey-based measures of task content of jobs â non-routine cognitive analytical and personal, routine cognitive and manual â that are consistent with widely-used occupation-specific measures based on O*NET database. We apply them to representative surveys conducted in 42 countries at different stages of development. We find substantial cross-country differences in the content of work within occupations. Routine task intensity (RTI) of jobs decreases significantly with GDP per capita for high-skill occupations but not for middle- and low-skill occupations. We estimate the determinants of workersâ RTI as a function of technology (computer use), globalization (specialization in global value chains), structural change, and supply of skills, and decompose their role in accounting for the variation in RTI across countries. Computer use, better education, and higher literacy skills are related to lower RTI. Globalization (as measured by sector foreign value-added share) increases RTI in poorer countries but reduces RTI in richer countries. Differences in technology endowments and in skillsâ supply matter most for cross-country differences in RTI, with globalization also important. Technology contributes the most to the differences in RTI among workers in high-skilled occupations and non-off-shorable occupations; globalization contributes the most to differences among workers in low-skilled occupations and offshorable occupations.
    Date: 2019–04
  2. By: Valeria Cirillo; Rinaldo Evangelista; Dario Guarascio; Matteo Sostero
    Abstract: This paper explores the relation between the digitalization and of labour processes, the level of routineness of tasks and changes in employment. The levels of digitalization and routineness of occupations in 796 5-digit ISCO professional groups are measured using data from a unique Italian profession-level survey on skill, task and work contents ó the INAPP-ISTAT Survey on Italian Occupations (ICP), an O*NET-type dataset. We develop three novel digitalization indices: a digital use index measuring the use of digital devices and technologies in the workplace, a digital skills index assessing the familiarity and skill in using digital technologies, and a digital tasks index capturing the frequency and importance of selected digital tasks. Using the same data-source the Autor and Dorn routine task intensity index is also computed. This allows us to explore, based on robust indicators on routinization and digitalization, the existence and the strength of a üroutinized biased technological changeý specifically associated to the use of digital technologies. Results show the multifaceted nature of both digitalization and routineness processes, both characterized by strong sectoral specificities and by being strongly associated with the skill content of labour professions. Professions characterized by higher digital skills are those showing the best employment performances (although this holds only in manufacturing sector). Both the descriptive and econometric evidences show a negative employment dynamics among professions combining high level of digitalization and routineness.
    Keywords: Digitalization; employment; task; skills.
    Date: 2019–06–13
  3. By: Link, Al (University of North Carolina at Greensboro, Department of Economics); Scott, John (Dartmouth College)
    Abstract: We view scientific publications as a measure of technical knowledge. Using the Solow method of functional decomposition and scientific publication data from the National Institute of Standards and Technology, we find that 79 percent if the increase of scientific publications per unit of scientific personnel is explained by an increase in federal R&D capital per unit of scientific personnel. We describe the unexplained or residual 21 percent as a measure of creativity-enhancing technological change, a phenomenon that offers a way to reverse the perceived slowing of the productivity of science. The explained 79 percent offers a possible metric for federal laboratories' mandated reporting of a ROI to federal R&D. Understanding the drivers of the residual 21 percent could enable public policy to mitigate the resource constraints caused by the breakdown of exponential growth of the resources devoted to science.
    Keywords: scientific publications; technological change; R&D; knowledge production function;
    JEL: O33 O38
    Date: 2019–06–17
  4. By: Gordon, Robert J; Sayed, Hassan
    Abstract: By merging KLEMS data sets and aggregating over the ten largest Western European nations (EU-10), we are able to compare and contrast productivity growth up through 2015 starting from 1950 in the U.S. and from 1972 in the EU-10. Data are provided at the aggregate level, as well as for 16 industry groups within the total economy and 11 manufacturing subindustries. The analysis focuses on outcomes over four time intervals: 1950-72, 1972-95, 1995- 2005, and 2005-15. We interpret the EU-10 performance as catching up to the U.S. in stages, with its rapid growth of 1950-72 representing a delayed adoption of the inventions that propelled U.S. productivity growth in the first half of the 20th century, and the next EU-10 stage for 1972-95 as imitating the U.S. outcome for 1950-72. A striking finding is that for the total economy the "early-to-late" productivity growth slowdown from 1972-95 to 2005-15 in the EU-10 (-1.68 percentage points) was almost identical to the U.S. slowdown from 1950-72 to 2005-15 (-1.67 percentage points). There is a very high EU-U.S. correlation in the magnitude of the early-to-late slowdown across industries. This supports our overall theme that the productivity growth slowdown from the early postwar years to the most recent decade was due to a retardation in technical change that affected the same industries by roughly the same magnitudes on both sides of the Atlantic.
    Keywords: industry decomposition; Productivity Growth; Technological change
    JEL: E01 E24 O33 O47 O51 O52
    Date: 2019–05
  5. By: Nuvolari, Alessandro (Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Russo, Emanuele (Institute of Economics, Scuola Superiore Sant’Anna, Pisa)
    Abstract: Along the development path, countries experience large transformations in their economic structure as productive resources move towards different economic activities. “Modern economic growth” is also associated with a self-sustained process of technical change which leads to the emergence of new products and sectors characterized by different scopes for productivity gains and demand growth. In this paper we study the interactions between structural change and technological progress from a long-term perspective. We first analyze the secular patterns of structural change across agriculture, manufacturing and services using historical data in the attempt to test some broad conjectures concerning sectoral reallocations at different stages of development (i.e. the so-called Petty-Clark law) and discuss the specific role of manufacturing as an engine of growth. Second, we provide an overview of the literature on sectoral innovation patterns as well as of recent evidence linking structural transformations and sector-specific technological opportunities to aggregate productivity growth. In the final part we present productivity decompositions using a sectoral innovation taxonomy to study the contribution of different groups of activities characterized by heterogeneous innovation patterns. Our results suggest that structural change towards knowledge-intensive activities provides a source of productivity growth in both developing and advanced countries. In turn, this points at the need for a more disaggregated analysis of structural change to capture the diversity in the rate and direction of technical progress across sectors.
    Keywords: Long-run development, structural change, technical change, productivity growth
    JEL: O10 O14 O30
    Date: 2019–06–12
  6. By: Giannis Karagiannis (University of Macedonia, Department of Economics); Magnus Kellermann (The Bavarian State Research Center for Agriculture); Klaus Salhofer (University of Natural Resources and Life Sciences Vienna, Institute of Sustainable Economic Development)
    Abstract: We decompose aggregate industry labor productivity growth into seven distinct components: input deepening, technical change, technical efficiency, scale effect, between-firm reallocation, effects from exits and entry. The first four components measure the productivity growth within a firm. The latter three components capture industry dynamics. Applied to a sample of 118 small and medium sized breweries in Germany over 13 years, we found that within-firm effects, in particular technical change and the scale effect, clearly dominated the effects from industry restructuring.
    Keywords: labor productivity, productivity growth, structural change, brewing industry, Germany
    JEL: D24 J24 L16 O12
    Date: 2019–06
  7. By: Fukao, Kyoji; Paul, Saumik
    Abstract: This paper examines the drivers of the long-run structural transformation in Japan. We use a dynamic input-output framework that decomposes the reallocation of the total output across sectors into two components: the Engel effect (demand side) and the Baumol effect (supply side). To perform this task, we employ 13 seven-sector input-output tables spanning 100 years (1885 to 1985). The results show that the Engel effect was the key explanatory factor in more than 60% of the sector-period cases in the pre-WWII period, while the Baumol effect drove structural transformation in more than 75% of such cases in the post-WWII period. Detailed decomposition results suggest that in most of the sectors (agriculture, commerce and services, food, textiles and transport, communication and utilities), changes in private consumption were the dominant force behind the demand-side explanations. The Engel effect was found to be the strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the 20th century
    Keywords: long-run structural transformation, the Engel effect, Baumol’s cost disease effect, sectoral productivity growth
    JEL: O40 O10
    Date: 2019–05
  8. By: Fukao, Kyoji; Makino, Tatsuji; Settsu, Tokihiko
    Abstract: After the Meiji Restoration of 1868, Japan modernized its institutions and economic growth gradually picked up. Growth accelerated especially during the so-called high-speed growth era from 1955 to 1970, when Japan rapidly caught up with Western economies. The long-term sustained high-speed growth recorded during this period was unprecedented not only in Japan but worldwide. While other East Asian countries such as Singapore, Taiwan, South Korea, and China subsequently also experienced remarkable growth over a prolonged period, Japan’s place in history as the first country to record such sustained high-speed growth means that its experience continues to garner worldwide interest. Using newly constructed Hitotsubashi estimates of Japan’s historical GDP statistics and a growth accounting framework, we analyze the sources of Japan’s economic growth from 1885 to 1970 and try to answer why Japan was not able to accomplish such high-speed growth before 1955. Since until the mid-1960s the primary sector accounted for a large share of economic activity and was a major determinant of overall economic growth, we use a Hayashi and Prescott (2008) type two-sector model in which the economy overall is divided into the primary sector and the non-primary sector
    Date: 2019–05
  9. By: Jonathan Eberle (Department of Economic Geography and Location Research, Philipps University Marburg); Philipp Boeing (ZEW - Leibniz Centre for European Economic Research, Mannheim and Peking University, China Center for Economic Research (CCER), Beijing)
    Abstract: We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening.
    Keywords: China, R&D subsidies, regional economic growth, panel VAR, impulse response functions
    JEL: C33 R11 R58 O38 O47
    Date: 2019–06
  10. By: Bronwyn H Hall
    Abstract: A large number of countries around the world now provide some kind of tax incentive to encourage firms to undertake innovative activity. This paper presents the policy rationale for these incentives, discusses their design and potential effectiveness, and reviews the empirical evidence on their actual effectiveness. The focus is on the two most important and most studied incentives: R&D tax credits and super deductions, and IP boxes (reduced corporate taxes in income from patents and other intellectual property).
    Keywords: R&D tax credit, patent box, super deduction, IP box, tax subsidy, innovation
    JEL: H25 O32 O38
    Date: 2019–06
  11. By: Valentina De Marchi (Department of Economics and Management ‘Marco Fanno’, University of Padova); Eleonora Di Maria (Department of Economics and Management ‘Marco Fanno’, University of Padova)
    Abstract: Environmental sustainability has increased its relevance within business strategies and innovation in particular while circular economy (CE) is receiving growing attention as a new paradigm of production and value creation. Low attention has been given to explore the relationship between digital transformation of business processes via industry 4.0 technologies and CE strategies. On the one hand, digital manufacturing supports efficient use and control of resources. On the other hand, such technologies improve product life cycle management (through IoT or big data) and new business models (product-as-a-service). The paper explores the relationship between environmental sustainability strategies, technological investments in industry 4.0 and green outcomes, based on unique data gathered through an original 2017 survey on a sample of more than 1,100 Italian firms. Results show the positive relationship between green drivers and green outcomes for firms adopting industry 4.0 technologies, both in terms of eco-efficiency and circularity. Investing in digital manufacturing, smart products, and higher variety of 4.0s technologies characterize adopters with green outcomes. Having a clear green strategy, ICT propensity, domestic production, and low customer dependency are factors positively related with green outcomes for adopters.
    Keywords: digital manufacturing, industry 4.0, circular economy, sustainability, eco-efficiency
    Date: 2019–05
  12. By: Marco Grazzi; Chiara Piccardo; Cecilia Vergari
    Abstract: This work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms of revenues, growth and profitability. By resorting to the virtual universe of Italian manufacturing firms this work provides a rather complete picture of the Intellectual Property (IP) strategies pursued by Italian firms, in terms of patents and trademarks, and we study whether the two instruments for protecting IP exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance exert any effect on performance.
    Keywords: Trademarks; Patents; Innovation; Intellectual Property; Complementarity; Concordance; Technological proximity; firm performance; firm growth.
    Date: 2019–06–14
  13. By: Link, Al (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper analyzes the inter-relationship among technology transfer mechanisms using data specific to the U.S. National Institute of Standards and Technology (NIST). An overview of the history of NIST and U.S. policies that emphasize the economic importance of technology transfer are discussed. The empirical analysis focuses on NIST's investments in R&D and the cascading impact of those investments on new inventions disclosed, new patent applications, new patents issued, and the new patent licenses; and accounting for the effects of R&D on these three investments, an overall estimate of the R&D elasticity of new patent licenses is calculated to be 0.7976. The paper concludes with a policy-focused summary of the implications of the empirical findings, and a suggested roadmap for future research related to technology transfer from U.S. Federal laboratories.
    Keywords: technology transfer; federal laboratories; NIST; R&D; patents;
    JEL: H40 O31 O38
    Date: 2019–06–19

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