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on Technology and Industrial Dynamics |
| By: | Maarten Goos (Utrecht School of Economics); Melanie Arntz (ZEW and University of Heidelberg); Ulrich Zierahn (ZEW); Terry Gregory (ZEW); Stephanie Carretero Gomez (European Commission - JRC); Ignacio Gonzalez Vazquez (European Commission - JRC); Koen Jonkers (European Commission - JRC) |
| Abstract: | New digital technologies more and more diffuse into the economy. Due to this digitisation, machines become increasingly able to perform tasks that previously only humans could to. Production processes and organizations are changing, new products, services and business models emerge. These trends have important implications for European labour markets. This working paper presents up-to date evidence on the consequences of technological innovations on labour markets based on the academic literature and discusses the resulting policy challenges along with examples of policy responses. One key finding is that so far recent technological change has had little effect on the aggregate number of jobs but leads to significant restructuring of jobs. This implies three key challenges for European labour markets: first, digitisation induces shifts in skill requirements, and workers’ fate in changing labour markets crucially depends on their ability to keep up with the change. Secondly, digitisation is not a purely technological process, but requires an accompanying process of organisational change. Thirdly, digitisation comes along with rising shares of alternative work arrangements, due to more outsourcing, standardisation, fragmentation, and online platforms. These alternative work arrangements imply both new opportunities and challenges. These challenges require adequate policy responses at the European, national and regional level, which the working paper outlines for education and training policies, active labour market policies, income policies, tax systems and technology policies. |
| Keywords: | Technical Change, Structural Change, Labour Markets, Europe |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:201903&r=all |
| By: | Satiris Blanas; Gino Gancia; Sang Yoon (Tim) Lee |
| Abstract: | We study how various types of machines, namely, information and communication technologies, software, and especially industrial robots, affect the demand for workers of different education, age, and gender. We do so by exploiting differences in the composition of workers across countries, industries and time. Our dataset comprises 10 high-income countries and 30 industries, which span roughly their entire economies, with annual observations over the period 1982–2005. The results suggest that software and robots reduced the demand for low and medium-skill workers, the young, and women — especially in manufacturing industries; but raised the demand for high-skill workers, older workers and men —especially in service industries. These findings are consistent with the hypothesis that automation technologies, contrary to other types of capital, replace humans performing routine tasks. We also find evidence for some types of workers, especially women, having shifted away from such tasks. |
| Keywords: | Automation, robots, employment, labor demand, labor income share. |
| JEL: | J21 J23 O33 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1661&r=all |
| By: | Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | The premise of this paper is that a basis for firms receiving Small Business Innovation Research (SBIR) research awards to develop commercializable technologies is not only their proposed creative ideas but also their endowment of attendant knowledge necessary to develop the technology being proposed. Based on this premise, we propose that those firms that have higher growth rates attributable to their SBIR awards are also those firms that are more creative and have more knowledge endowments. Empirically, we quantify a firm's creativity and its sources of research knowledge in terms of its past experiences, and we find that firms with more technical experience and sector experience are those that have realized higher growth rates from their SBIR-funded research. |
| Keywords: | knowledge; creativity; entrepreneurship; SBIR program; technology; |
| JEL: | D83 H43 L26 O33 O38 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2019_009&r=all |
| By: | Andersson, Martin (Department of Economics, Blekinge Institute of Technology); Lavesson, Niclas (CIRCLE, Lund University); Partridge, Mark D. (Ohio State University) |
| Abstract: | We assess the empirical literature on the determinants of spatial variations in new-firm formation rates by undertaking a systematic empirical analysis of the relative roles of different demand- and supply-side factors. Using instrumental variables to address endogeneity, we find that local growth drives local entrepreneurship exclusively in services industries. Average establishment size has a robust negative influence on local new-firm formation rates, but its effect varies across industries. Local industry diversity is only positive for new-firm formation in high-tech and knowledge-intensive activities. There is also some evidence of that longer distances to urban centers is associated with higher new-firm formation rates. The only local factor with a consistent positive effect on new-firm formation across industries is local density of skilled workers. We conclude that industry structure, geography and agglomeration matter, but in the end, new firms are started by people, so it is unsurprising that the main factor driving local entrepreneurship is the characteristics of the local residents. |
| Keywords: | Entrepreneurship; New firm formation; Geography; Human capital; Agglomeration; Local growth; Startups |
| JEL: | L26 M13 R11 R30 |
| Date: | 2019–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1290&r=all |
| By: | Germán Gutiérrez; Thomas Philippon |
| Abstract: | We study the entry and exit of firms across U.S. industries over the past 40 years. The elasticity of entry with respect to Tobin’s Q was positive and significant until the late 1990s but declined to zero afterwards. Standard macroeconomic models suggest two potential explanations: rising entry costs or rising returns to scale. We find that neither returns to scale nor technological costs can explain the decline in the Q- elasticity of entry, but lobbying and regulations can. We reconcile conflicting results in the literature and show that regulations drive down the entry and growth of small firms relative to large ones, particularly in industries with high lobbying expenditures. We conclude that lobbying and regulations have caused free entry to fail. |
| JEL: | D4 D6 E22 E23 K2 L0 O3 O4 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26001&r=all |
| By: | Ramiro de Elejalde (Departamento de Economía, Universidad Alberto Hurtado); Carlos J. Ponce (Departamento de Economía, Universidad Alberto Hurtado); Flavia Roldán (Universidad ORT Uruguay) |
| Abstract: | Using a sample of manufacturing firms in Uruguay, this paper studies the eect of product market competition on innovative activities, labor practices and the provision of incentives within firms. Our estimates show that a higher level of product market competition: (i) decreases innovative expenditures, (ii) increases the number of innovations per dollar spent on innovative activities, and: (iii) leads firms to implement incentive payment schemes based on employee performance. These results suggest that, in developing economies, firms react to a higher level of product market competition by providing internal incentives that ultimately lead to significant increases in the productivity of their innovative outlays. |
| Keywords: | Competition, Innovation, Innovative Productivity, Incentives. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv328&r=all |
| By: | Giulio Federico; Fiona Scott Morton; Carl Shapiro |
| Abstract: | The goal of antitrust policy is to protect and promote a vigorous competitive process. Effective rivalry spurs firms to introduce new and innovative products, as they seek to capture profitable sales from their competitors and to protect their existing sales from future challengers. In this fundamental way, competition promotes innovation. We apply this basic insight to the antitrust treatment of horizontal mergers and of exclusionary conduct by dominant firms. A merger between rivals internalizes business-stealing effects arising from their parallel innovation efforts and thus tends to depress innovation incentives. Merger-specific synergies, such as the internalization of involuntary spillovers or an increase in the productivity of R&D, may offset the adverse effect of a merger on innovation. We describe the possible effects of a merger on innovation by developing a taxonomy of cases, with reference to recent U.S. and E.U. examples. A dominant firm may engage in exclusionary conduct to eliminate the threat from disruptive firms. This suppresses innovation by foreclosing disruptive rivals and by reducing the pressure to innovative on the incumbent. We apply this broad principle to possible exclusionary strategies by dominant firms. |
| JEL: | L1 L10 L12 L13 L4 O3 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26005&r=all |
| By: | Kehrig, Matthias; Vincent, Nicolas |
| Abstract: | Dispersion in marginal revenue products of inputs across plants is commonly thought to reflect misallocation, i.e., dispersion is "bad." We document that most dispersion occurs across plants within rather than between firms. In a model of multi-plant firms, we then show that dispersion can be "good": Eliminating frictions increases productivity dispersion and raises overall output. Based on this framework, we argue that in U.S. manufacturing, one-quarter of the total variance of revenue products reflects good dispersion. In contrast, we find that in emerging economies, almost all dispersion is bad and the gains from eliminating distortions are larger than previously thought. |
| Keywords: | Internal Capital Markets; Misallocation; Multi-Plant Firms; Productivity dispersion |
| JEL: | E2 G3 L2 O4 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13772&r=all |
| By: | De Rassenfosse, Gaétan; Decarolis, Francesco; Iossa, Elisabetta; Leonardo Giuffrida, Leonardo; Mollisi, Vincenzo; Raiteri, Emilio; Spagnolo, Giancarlo |
| Abstract: | What is the impact of buyers on the performance of innovation procurement? In which phase of the procurement process are buyers most crucial and why? We address these questions by exploiting a novel dataset that links U.S. federal R&D contracts to their follow-on patents, citations and claims. Using the deaths of managers in the offices close to where contracts are performed as shocks to the functioning of these offices, we measure a positive and sizable effect of public buyers on all three outcome measures. The buyer's role is stronger in the pre-award, tender-design phase, where cooperation between different specialists is essential, than in the following contract-management phase typically performed by individual officers. Consistently, bureaus where employees perceive high level of cooperation within the office are associated with better R&D outcomes. |
| Keywords: | Buyers; Innovation; Management Practices; patents; Procurement; R&D Procurement |
| JEL: | H11 H57 O31 O32 O38 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13777&r=all |
| By: | Kristina Barauskaite (Bank of Lithuania & ISM University of Management and Economics); Anh D.M. Nguyen (Bank of Lithuania & Vilnius University) |
| Abstract: | This study investigates the role of intersectoral networks in the transmission of aggregate technology shocks to sectors’ growth. First, we develop a theoretical model to obtain insights into the propagation of shocks through input-output linkages, which suggests that the network effect arises via sectoral downstream linkages. We then quantitatively assess this theoretical implication with US manufacturing industries, where the aggregate technology shocks are derived from a dynamic factor model. We find that aggregate technology shocks lead to an increase in the output growth of the sector, both directly and indirectly via its intersectoral linkages. More interestingly, we document a crucial role of the intersectoral network channel, which contributes about 50 percent of the total effect. In addition, the network-based effect comes mostly from downstream linkages of sectors, which is broadly consistent with theory. |
| Keywords: | Input-Output Linkages, Intersectoral Network, Business Cycle, Aggregate Technology Shocks, TFP, Manufacturing Industries, Productivity |
| JEL: | E32 C67 C33 L16 D24 |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:lie:wpaper:63&r=all |
| By: | Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés |
| Abstract: | Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006–2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing “more of all” on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products. |
| Keywords: | innovation; firms; scientific and supply-chain collaboration; interaction; Norway |
| JEL: | O31 O32 O33 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100330&r=all |