nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒02‒01
eleven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Economics of Crisis Innovation Policy: A Historical Perspective By Daniel P. Gross; Bhaven N. Sampat
  2. The readiness of industry for a transformative recovery from COVID 19 By Fankhauser, Samuel; Kotsch, Raphaela; Srivastav, Sugandha
  3. Firm-level R&D after periods of intense technological innovation: the role of investor sentiment By Sirio Aramonte; Matthew Carl
  4. Growing like China: firm performance and global production line position By Chor, Davin; Manova, Kalina; Yu, Zhihong
  5. The impact of Artificial Intelligence on the labour market: What do we know so far? By Marguerita Lane; Anne Saint-Martin
  6. Robots, AI, and Related Technologies: A Mapping of the New Knowledge Base By Enrico Santarelli; Jacopo Staccioli; Marco Vivarelli
  7. Growth, development, and structural change at the firm-level: The example of the PR China By Torsten Heinrich; Jangho Yang; Shuanping Dai
  8. Do the "smart kids" catch up? Technological capabilities, globalisation and economic growth By Gräbner, Claudius; Heimberger, Philipp; Kapeller, Jakob
  9. Automotive regions in transition: preparing for connected and automated vehicles By Michaela Trippl; Simon Baumgartinger-Seiringer; Elena Goracinova; David A. Wolfe
  10. What about the regional level? Regional configurations of Technological Innovation Systems By Sebastian Rohe; Jannika Mattes
  11. Reconsidering structural conditions: Institutional infrastructure for innovation-based industrial path renewal By Simon Baumgartinger-Seiringer; Lea Fuenfschilling; Johan Miörner; Michaela Trippl

  1. By: Daniel P. Gross; Bhaven N. Sampat
    Abstract: Since the beginning of the COVID-19 pandemic, policymakers, researchers, and journalists have made comparisons to World War II. In 1940, a group of top U.S. science administrators organized a major coordinated research effort to support the Allied war effort, including significant investments in medical research which yielded innovations like mass-produced penicillin, antimalarials, and a flu vaccine. We draw on this episode to discuss the economics of crisis innovation. Since the objectives of crisis R&D are different than ordinary R&D (prioritizing speed, coordination, redundancy, and more), we argue that appropriate R&D policy in a crisis requires going beyond the standard Nelson-Arrow framework for research policy.
    JEL: H12 H56 N42 N72 O31 O32 O38
    Date: 2021–01
  2. By: Fankhauser, Samuel; Kotsch, Raphaela; Srivastav, Sugandha
    Abstract: Many countries are committed to emerge from COVID 19 on a more sustainable environmental footing. Here we explore what such a structurally transformative recovery would mean for the manufacturing sector. We construct two indicators to assess the readiness of manufacturing in 14 countries to move toward zero-carbon products and processes post-COVID 19: the extent to which country-sectors have already started to convert to zero-carbon products and processes (measured by low-carbon innovation) and their ability to gain and maintain market share (measured by existing comparative advantages). Taken together the two indicators paint an intuitive picture of the strengths, weaknesses, opportunities and threats faced by different sectors, which can guide countries in their recovery strategies. We find that all countries have zero-carbon growth opportunities and comparative advantages in some sectors, but industrialised countries and the East Asian economies, especially South Korea, appear best positioned, thanks a push in low- carbon innovation that predates the pandemic.
    Keywords: coronavirus; Covid-19; ES/R009708/1; forthcoming
    JEL: R14 J01
    Date: 2020–10–08
  3. By: Sirio Aramonte; Matthew Carl
    Abstract: Following periods of intense technological innovation, R&D is a critical driver of technology diffusion, but it is subject to frictions that can lower it below the level firms would undertake otherwise. We study whether sentiment can counterbalance these frictions and thus strengthen the link between firm-level R&D and lagged aggregate innovation. We find a positive answer for low-tech firms, which represent the main conduit for technology diffusion. The effect is stronger in the presence of informational externalities, that is when the results of experimentation funded by a company are observable by competitors. In contrast to the literature on sentiment and capital expenditures, the effect is weaker for financially constrained firms.
    Keywords: investor sentiment, technological innovation, R&D
    JEL: G02 G31 O32 O33
    Date: 2021–01
  4. By: Chor, Davin; Manova, Kalina; Yu, Zhihong
    Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with InputOutput tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.
    Keywords: global value chains; production line position; upstreamness; firm heterogeneity; firm lifecycle; China
    JEL: F10 F23 L23 L24 L25
    Date: 2020–09
  5. By: Marguerita Lane; Anne Saint-Martin
    Abstract: This literature review takes stock of what is known about the impact of artificial intelligence on the labour market, including the impact on employment and wages, how AI will transform jobs and skill needs, and the impact on the work environment. The purpose is to identify gaps in the evidence base and inform future OECD research on AI and the labour market.
    Keywords: AI, Artificial intelligence, Artificial intelligence; AI; technology; literature review; future of work;, Future of Work, Litterature review, Technology
    JEL: J20 J81 J31 O14 O33
    Date: 2021–01–25
  6. By: Enrico Santarelli (Department of Economics, University of Bologna – Department of Economics and Management, University of Luxembourg); Jacopo Staccioli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: Using the entire population of USPTO patent applications published between 2002 and 2019, and leveraging on both patent classification and semantic analysis, this papers aims to map the current knowledge base centred on robotics and AI technologies. These technologies will be investigated both as a whole and distinguishing core and related innovations, along a 4-level core-periphery architecture. Merging patent applications with the Orbis IP firm-level database will allow us to put forward a threefold analysis based on industry of activity, geographic location, and firm productivity. In a nutshell, results show that: (i) rather than representing a technological revolution, the new knowledge base is strictly linked to the previous technological paradigm; (ii) the new knowledge base is characterised by a considerable – but not impressively widespread – degree of pervasiveness; (iii) robotics and AI are strictly related, converging (particularly among the related technologies) and jointly shaping a new knowledge base that should be considered as a whole, rather than consisting of two separate GPTs; (iv) the U.S. technological leadership turns out to be confirmed.
    Keywords: Robotics, Artificial Intelligence, General Purpose Technology, Technological Paradigm, Industry 4.0, Patents full-text
    JEL: O33
    Date: 2021–01
  7. By: Torsten Heinrich; Jangho Yang; Shuanping Dai
    Abstract: Understanding the microeconomic details of technological catch-up processes offers great potential for informing both innovation economics and development policy. We study the economic transition of the PR China from an agrarian country to a high-tech economy as one example for such a case. It is clear from past literature that rapidly rising productivity levels played a crucial role. However, the distribution of labor productivity in Chinese firms has not been comprehensively investigated and it remains an open question if this can be used to guide economic development. We analyze labor productivity and the dynamic change of labor productivity in firm-level data for the years 1998-2013 from the Chinese Industrial Enterprise Database. We demonstrate that both variables are conveniently modeled as L\'evy alpha-stable distributions, provide parameter estimates and analyze dynamic changes to this distribution. We find that the productivity gains were not due to super-star firms, but due to a systematic shift of the entire distribution with otherwise mostly unchanged characteristics. We also found an emerging right-skew in the distribution of labor productivity change. While there are significant differences between the 31 provinces and autonomous regions of the P.R. China, we also show that there are systematic relations between micro-level and province-level variables. We conclude with some implications of these findings for development policy.
    Date: 2020–12
  8. By: Gräbner, Claudius; Heimberger, Philipp; Kapeller, Jakob
    Abstract: This paper analyses the impact of technological capabilities on convergence. While looking at the relevance of differences in technological capabilities has a long tradition in economics when it comes to explaining persistent deviations in income, we provide econometric tests on the role of technology in determining convergence outcomes in a growth regression framework. We exploit recent advances in measuring technological capabilities for a global country sample over the period 1985-2014. Our results show that convergence is conditional on technological capabilities. This finding is robust to controlling for economic globalisation, resource dependence, institutional quality and other confounding factors. The initial stock of accumulated technological capabilities is one essential factor that may allow poorer countries to convergence towards higher income levels in rich countries. A successful catching-up process cannot be expected for countries lacking a sufficient stock of previously accumulated technological capabilities.
    Keywords: Economic complexity,technology,convergence,catch-up,globalisation,openness
    JEL: E6 F4 O3
    Date: 2020
  9. By: Michaela Trippl; Simon Baumgartinger-Seiringer; Elena Goracinova; David A. Wolfe
    Abstract: The advent of ‘connected and automated vehicles’ (C/AV) is posing substantial transformation challenges on traditional automotive regions across the world. This paper seeks to examine both conceptually and empirically how automotive regions reconfigure their industrial and support structures to promote new path development in the C/AV field. Drawing on recent conceptual advances at the intersection of evolutionary economic geography and innovation system studies, we develop an analytical framework that casts light on how regional preconditions provide platforms for asset modification that underpin different routes of transformation. We distinguish between a reorientation route and an upgrading route. The framework is applied to a comparative analysis of industrial path development and system reconfiguration towards C/AV in two automotive regions, namely Ontario (Canada) and the Austrian automotive triangle.
    Keywords: regional restructuring, new path development, asset modification, innovation system reconfiguration, connected and automated vehicles
    JEL: O33 R11 R58
    Date: 2020
  10. By: Sebastian Rohe; Jannika Mattes
    Abstract: Regional innovation policy must not only strive for economic competitiveness, but also push novel and more sustainable technological solutions. The complex and multi-scalar process of developing and diffusing new technologies is captured by the Technological Innovation Systems (TIS) frame-work. However, the approach neglects regional variety and lacks a nuanced and systematic under-standing of how technological change plays out differently across places. We thus complement TIS with insights from the literature on Regional Innovation Systems (RIS), which offers manifold com-parisons and typologies of institutional contexts for regional innovation. We argue that three ideal-typical configurations – localist-grassroots, interactive-networked, and globalist-dirigiste – exist at the intersection between a technological and specific regional innovation system. We discuss how these regional configurations contribute differently to the development and functioning of the overall TIS and point to the innovation-related challenges they are confronted with. We illustrate our conceptual arguments with a brief comparative case study on three regions in the TIS for on-shore wind energy. Overall, this paper contributes to the literature on the geographies of innova-tion and sustainability transitions, introduces a framework for analyzing regional variety in TIS, and enables more fine-grained and place-specific policy interventions directed at fostering specific technologies at the regional level.
    Keywords: Technological Innovation System, Regional Innovation System, Innovation Policy, Geography of Sustainability Transitions, Onshore Wind Energy
    Date: 2021
  11. By: Simon Baumgartinger-Seiringer; Lea Fuenfschilling; Johan Miörner; Michaela Trippl
    Abstract: This paper aims to develop a more elaborated understanding of innovation-based renewal of industries from a structural perspective. Current perspectives offer rather simplistic views on the role of structural conditions in regional industrial renewal process. In order to overcome this limitation, we draw on the concept of ‘institutional infrastructure’ to examine the ensemble of structural elements for industrial path development in regional contexts. The institutional infrastructure and its conditions, i.e. its elaboration and coherence, are seen as important factors for industrial change. To illustrate this approach, we investigate renewal processes in two traditional automotive regions in Austria and Sweden.
    Keywords: Path renewal, institutional infrastructure, structures, elaboration, coherence
    JEL: O33 R11 R58
    Date: 2020

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