nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒03‒01
sixteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Digitalizing Firms: Skills, Work Organization and the Adoption of New Enabling Technologies By Valeria Cirillo; Lucrezia Fanti; Andrea Mina; Andrea Ricci
  2. Technological relatedness: How do firms diversify their technology? By Kim, Seung Hwan; Jun, Bogang; Lee, Jeong-Dong
  3. Conceptualizing Strategic Innovation in a Firm Context: A Theoretical Review and Research Agenda By Mulaa, Josephine K.; Kilika, James M.; Namusonge, Mary J.; Institute of Research, Asian
  4. Technology Diffusion By Nancy Stokey
  5. The Automotive Supply Chain in Europe: An Input-Output Analysis of Value Added and Employment Composition By Marta Fana; Davide Villani
  6. Tapping into Talent: Coupling Education and Innovation Policies for Economic Growth By Ufuk Akcigit; Jeremy Pearce; Marta Prato
  7. Fencing Off Silicon Valley: Cross-Border Venture Capital and Technology Spillovers By Ufuk Akcigit; Sina T. Ates; Josh Lerner; Richard R. Townsend; Yulia Zhestkova
  8. Trade as a channel for environmental technologies diffusion: The case of the wind turbine manufacturing industry By Grégoire Garsous; Stephan Worack
  9. Consumption access and agglomeration: evidence from smartphone data By Yuhei Miyauchi; Kentaro Nakajima; Stephen J. Redding
  10. A Review of Literature of Global Value Chains By Dutta, Sourish
  11. Growth, development, and structural change at the firm level: The example of the PR China By Heinrich, Torsten; Yang, Jangho; Dai, Shuanping
  12. Patent landscaping using 'green' technological trajectories By Nomaler, Önder; Verspagen, Bart
  13. Management, skills and productivity By Emile Cammeraat; Lea Samek; Mariagrazia Squicciarini
  14. The legitimacy of wind power in Germany By Dehler-Holland, Joris; Okoh, Marvin; Keles, Dogan
  15. COVID-19 Shifted Patent Applications Toward Technologies that Support Working from Home By Nicholas Bloom; Steven J. Davis; Yulia Zhestkova
  16. A unified conceptual framework of tasks, skills and competences By Margarida Rodrigues; Enrique Fernandez-Macias; Matteo Sostero

  1. By: Valeria Cirillo; Lucrezia Fanti; Andrea Mina; Andrea Ricci
    Abstract: New enabling technologies are shaping the transformation of production activities. This process of change is characterised by growing digitization, inter-connectivity and automation. The diffusion of new technologies is, however, very uneven, and firms display different adoption behaviours. By using panel data on a large representative sample of Italian firms, we explore the patterns and determinants of new digital technology adoption. We build our theoretical framework on the nexus between technology, skills and the organisation of work. We then provide novel econometric evidence on the positive effects of human capital and training. Among the notable results of the paper, labour flexibility does not seem to favour new technology adoption, whereas second-level collective bargaining plays a positive role in the process. Results also show heterogeneous effects between large vs. small and medium-size firms, and between manufacturing and service sectors.
    Keywords: Digital technologies; Industry 4.0; skills; human capital; work organisation.
    Date: 2021–02–05
  2. By: Kim, Seung Hwan; Jun, Bogang; Lee, Jeong-Dong
    Abstract: The principle of relatedness, which helps estimate the affinity between economic activities, suggests that cities, regions, and countries are more likely to undertake new economic activities when they already perform related activities. This empirical principle has been confirmed for various dimensions---cities, regions, and countries---and their activities--- developing new technologies, products, and industries. However, the technological diversification of firms is yet unexplored. Is a firm more successful at entering a new technology when it has already accumulated related technologies? Here, we explore this issue using a unique dataset that contains firms' patent data and financial and market information. In particular, we examine Korean firms listed in the Korean stock market that published patents at the patent offices in Korea, Europe, and the United States from 1984 to 2004. We develop a technological relatedness measure to estimate whether a firm has already published patents with similar technologies. We find that firms are more likely to develop a new technology when they already have related technologies. Interestingly, technological relatedness shows an increasing return to related knowledge. We also check the robustness of this effect using propensity score matching and find that the effects of technological relatedness and its increasing return behavior remain significant when controlling for potential confounding effects. These findings extend the concept of relatedness to a firm's technological diversification and show that the development of a firm's technological knowledge is shaped by its technological relatedness.
    Date: 2021–02–25
  3. By: Mulaa, Josephine K.; Kilika, James M.; Namusonge, Mary J.; Institute of Research, Asian
    Abstract: The literature on strategic management recognizes the pivotal role played by strategic innovation as a strategic choice in organizations in order to create a sustainable competitive advantage. However, although there are emerging calls for the adoption of strategic innovation in a firm’s strategic management process, the concept of strategic innovation is not well understood. The scanty empirical literature reviewed has methodological and conceptual gaps that affect the generalizability of findings even in similar contexts. In this paper, the authors have attempted to review Strategic Innovation and argued that the emerging phenomena from its deployment in firms invite the role of the firm structure and innovative capacity as the firm seeks to enhance its chances of survival in a rapidly changing firm context. The conceptual, theoretical and empirical literature reviewed identified diverse issues that present a case for a theoretical model suitable to advance the current understanding of strategic innovation and the emerging phenomenon in firms. This paper therefore proposes an integrated theoretical model conceptualizing strategic innovation in a firm context and identifies relevant implications for future research.
    Date: 2021–02–09
  4. By: Nancy Stokey (University of Chicago - Department of Economics)
    Abstract: The importance of new technologies derives from the fact that they spread across many different users and uses, as well as different geographic regions. The diffusion of technological improvements, across producers within a country and across international borders, is critical for long run growth. This paper looks at some evidence on adoption patterns in the U.S. for specific innovations, reviews some evidence on the diffusion of new technologies across international boundaries, and looks at two theoretical frameworks for studying the two types of evidence. One focuses on the dynamics of adoption costs, the other on input costs.
    JEL: O14 O33
    Date: 2020
  5. By: Marta Fana (European Commission – JRC); Davide Villani (The Open University; Goldsmiths College – University of London)
    Abstract: This paper studies the automotive supply chain in four European countries (Germany, France, UK and Italy). First, employing WIOD data (Timmer et al., 2015) processed via Trade-SCAN (Roman et al., 2019), we decompose the domestic and imported inputs of production, focusing on the region and industry of origin of the contribution to show how the configuration of the automotive supply chain evolved between 2000 and 2014. The analysis focuses on the four dimensions, i.e. employment, value added, profits and labour compensation, to assess the evolution of the costs of production of the domestic and imported segments of the supply chain. We show that the imported component increases its costs in all countries except Germany, where domestic costs increase faster than imported ones. Notably, this trend can be imputed to the faster increase of the profit component of value added, rather than labour compensation. Second, we decompose the employment participating in the supply chain according to its occupational structure combining input-output data with labour Force Survey data. This analysis shows that there is a generalised upgrading trend in the occupational composition of the automotive supply chain, which involves both domestic and imported labour.
    Keywords: Automotive supply chain, Input-Output Analysis, Trade-SCAN, Occupational Structure.
    Date: 2021–02
  6. By: Ufuk Akcigit (University of Chicago - Department of Economics; NBER; CEPR); Jeremy Pearce (University of Chicago - Department of Economics); Marta Prato (University of Chicago - Department of Economics)
    Abstract: How do innovation and education policy affect individual career choice and aggregate productivity? This paper analyzes the various layers that connect R&D subsidies and higher education policy to productivity growth. We put the development of scarce talent and career choice at the center of a new endogenous growth framework with individual-level heterogeneity in talent, frictions, and preferences. We link the model to micro-level data from Denmark and uncover a host of facts about the links between talent, higher education, and innovation. We use these facts to calibrate the model and study counter-factual policy exercises. We find that R&D subsidies, while less effective than standard models, can be strengthened when combined with higher education policy that alleviates financial frictions for talented youth. Education and innovation policies not only alleviate different frictions, but also impact innovation at different time horizons. Education policy is also more effective in societies with high income inequality.
    Keywords: R&D policy, education policy, inequality, innovation, iq, endogenous growth
    JEL: O31 O38 O47 J24
    Date: 2020
  7. By: Ufuk Akcigit (University of Chicago - Department of Economics; NBER; CEPR); Sina T. Ates (Federal Reserve Board of Governors); Josh Lerner (Harvard University - Harvard Business School; NBER); Richard R. Townsend (University of California at San Diego - Rady School of Management); Yulia Zhestkova (University of Chicago - Department of Economics)
    Abstract: The treatment of foreign investors has been a contentious topic in U.S. entrepreneurship policy in recent years. This paper examines foreign corporate investments in Silicon Valley from a theoretical and empirical perspective. We model a setting where such funding may allow U.S. entrepreneurs to pursue technologies that they could not otherwise, but may also lead to spillovers to the overseas firm providing the financing and the nation where it is based. We show that despite the benefits from such inbound investments for U.S. firms, it may be optimal for the U.S. government to raise their costs to deter investments. Using as comprehensive as possible a sample of investments by non-U.S. corporate investors in U.S. start-ups between 1976 and 2015, we find evidence consistent with the presence of knowledge spill-overs to foreign investors.
    Keywords: Innovation, foreign direct investment, corporate venture capital
    JEL: G24 O33 O34
    Date: 2020
  8. By: Grégoire Garsous; Stephan Worack
    Abstract: Only a small number of companies, located in a few countries, have specific technological expertise in wind turbine manufacturing. New quantitative analysis shows this expertise to be a significant driver of trade in wind turbines. Moreover, countries’ wind power generation efficiency is shown to depend on access to higher quality wind turbines available in international markets. Trade in wind turbines thus provides access to technologies with a level of efficiency that cannot be replicated domestically in importing countries. These results have important policy implications: i) barriers to trade in wind turbines are also barriers to the dissemination of key environmental technologies which are not otherwise widely available; ii) trade-discriminatory measures can also negatively impact non-manufacturing job creation in the renewable sector, as this relies on the continuous deployment of wind energy, which in turn depends on access to high quality turbines from international markets; and iii) policies should not focus on the creation of national champions, but rather on ensuring that domestic firms can apply their specific capabilities to new opportunities in the global value chains of renewables industries.
    Keywords: Environmental technologies, Patents, Trade, Wind energy
    JEL: F13 F18 O13 O33 O42
    Date: 2021–02–02
  9. By: Yuhei Miyauchi; Kentaro Nakajima; Stephen J. Redding
    Abstract: We provide new theory and evidence on the role of consumption access in understanding the agglomeration of economic activity. We combine smartphone data that records user location every 5 minutes of the day with economic census data on the location of service-sector establishments to measure commuting and non-commuting trips within the Greater Tokyo metropolitan area. We show that non-commuting trips are frequent, more localized than commuting trips, strongly related to the availability of nontraded services, and occur along trip chains. Guided by these empirical findings, we develop a quantitative urban model that incorporates travel to work and travel to consume non-traded services. Using the structure of the model, we estimate theoretically-consistent measures of travel access, and show that consumption access makes a sizable contribution relative to workplace access in explaining the observed variation in residents and land prices across locations. Undertaking counterfactuals for changes in travel costs, we show that abstracting from consumption trips leads to a substantial underestimate of the welfare gains from a transport improvement (because of the undercounting of trips) and leads to a distorted picture of changes in travel patterns within the city (because of the different geography of commuting and non-commuting trips).
    Keywords: agglomeration, urbanization, transportation
    JEL: O18 R12 R40
    Date: 2021–02
  10. By: Dutta, Sourish
    Abstract: The phenomenon of global value chains (GVCs) indicates a division of labour type production structure in which tasks and business functions are distributed among several companies, globally, or regionally (Grossman and Rossi-Hansberg 2008). The critical features of GVCs are therefore the international dimension of the production process and the "contractualisation" of buyer and seller relationships, often across international borders (Antras 2016). As a result, these international production networks are highly complex regarding geography, technology, and the different types of firms involved (from large retailers and highly large-scale mechanised manufacturers to small home-based production). Sometimes it may be impossible even to identify all the countries that are involved or the extent of their involvement (Gereffi and FernandezStark 2016). However, the recent development of OECD-WTO’s Trade-in Value Added (TiVA) data represents a fundamental step forward in understanding GVC trade. Grossman & RossiHansberg (2008, 2012) rightly point out that the different tasks, rather than sectors, define the specialisation of countries in the value chains.
    Date: 2021–02–19
  11. By: Heinrich, Torsten; Yang, Jangho; Dai, Shuanping
    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 Lévy 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 PR 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: 2021
  12. By: Nomaler, Önder (UNU-MERIT); Verspagen, Bart (UNU-MERIT, Maastricht University)
    Abstract: We present a number of green technology patent landscaping exercises, based on a method that we developed earlier to identify the main technological trends in a very large (i.e., universal) patent citation network comprising all patented technologies. This method extracts a so-called network of main paths, where we interpret each path as a technological trajectory in the sense of Dosi (1982). We use co-occurrence on the technological trajectories as the main metric to build a network of technological relations, with green/non-green, the technology class (4-digit IPC classes) and geographical location (countries) as the main dimensions along which we observe green technology. The technology landscaping exercise visualises these networks. In this way, we draw a detailed map of green technologies (along with the particular non-green technologies that contribute thereto or benefit therefrom), in which we find both very broad and general areas (such as ICT or medical and health), and specific green technologies, such as batteries, wind power and electric vehicles. In the geography- based map, we find specific European and non-European areas. In all our landscaping maps, non-green technologies play a large role, indicating that sectoral and geographical progress in greentech cannot be fully understood independently of developments in particular fields of non-greentech technologies.
    Keywords: green technology, technological trajectories, patent citations, patent landscaping
    JEL: O31 O33 Q55
    Date: 2021–02–08
  13. By: Emile Cammeraat (OECD); Lea Samek (OECD); Mariagrazia Squicciarini (OECD)
    Abstract: This paper studies how industries’ investment in organisational capital (OC) and workforce skills relate to productivity, building on OECD estimates of OC, output data from the OECD Structural Analysis (STAN) database, and both cognitive and task-based skill indicators from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). The paper finds that at the industry level, workers’ numeracy and endowment of skills related to science, technology, engineering and mathematics (STEM) correlate positively with productivity, and that the positive correlation of STEM skills with productivity is generally larger for OC workers. The paper also finds evidence that skills dispersion harms industry performance. A gap between the ICT skills of OC and non-OC workers seems to trigger a “lost in translation” type of mechanism, whereby communication and information flows become less fluid and impinge upon the economic performance of sectors, correlating negatively with productivity.
    Keywords: Human Capital, ICT, Labour Productivity, Organisational Capital, Skills, STEM
    Date: 2021–02–23
  14. By: Dehler-Holland, Joris; Okoh, Marvin; Keles, Dogan
    Abstract: Legitimacy is a crucial factor determining the success of technologies in the early stages of development and for maintaining resource flows as well as public and political support across the technology life cycle. In sustainability transitions that unfold over long periods of time, the maintenance of legitimacy of technologies identified as vital for sustainability becomes a key challenge. In the energy sector, wind power contributes to the transition to an energy system with low greenhouse gas emissions. In Germany, wind power recently faced a series of lawsuits and decreasing investment activity. Therefore, we assess the legitimacy of wind power in Germany by analyzing newspaper articles from four national newspapers from 2009 to 2018. A large amount of articles motivates the use of topic models and statistical methods to shed light on the changing alignment of wind power with its context. The results show that various issues temporarily gain prominence on the agenda. Lately, the legitimacy of wind power in Germany is increasingly challenged by adverse effects on humans, animals, and landscapes. Policymakers and project developers may address aspects of pragmatic legitimacy, such as civic participation and the local distribution of profits.
    Keywords: Technology legitimacy,wind power Germany,structural topic model,natural language processing,text mining
    Date: 2021
  15. By: Nicholas Bloom (Stanford University - Department of Economics; NBER); Steven J. Davis (University of Chicago - Booth School of Business; NBER; Hoover Institution); Yulia Zhestkova (University of Chicago - Department of Economics)
    Abstract: We examine the text content of U.S. patent applications, identifying those that advance technologies in support of video conferencing, telecommuting, remote interactivity, and working from home (collectively, WFH). The share of new patent applications that advance WFH technologies more than doubles from January to September of 2020, greatly surpassing its previous peak, and following an upward trajectory since the onset of the pandemic. This evidence suggests that (re-)directed technical change in reaction to COVID-19 will raise the quality and efficiency of remote work, thereby reinforcing a shift to working from home even after the pandemic ends.
    Keywords: Directed technical change, patents, COVID-19, coronavirus, working from home, remote interactivity, text analysis
    JEL: O3 J21
    Date: 2020
  16. By: Margarida Rodrigues (NOVA School of Business and Economics, Lisbon); Enrique Fernandez-Macias (European Commission – JRC); Matteo Sostero (European Commission – JRC)
    Abstract: Skills and competences are frequently invoked by policy–makers in reference to labour market developments and education objectives. However, these concepts have different meanings across academic disciplines such as sociology economics, and education. This paper proposes a unified conceptual framework for tasks, skills and competences. We start from the concept of task, as the smallest unit of work involved in an economic process. Skills are defined as the ability to perform tasks. Similar tasks are grouped into task domains, which are bundled by employers into jobs. Likewise, similar skills make up skill domains, while competence is the ability to master skills across domains. This framework has two major advantages. First, it provides distinct definitions of relevant concepts and the relations between them. Second, it bridges the socio-economic concepts of skills and tasks, which relate to the labour market, with the education and training literature, which focuses on skill and competence development as learning objectives. We also propose a way to measure the different concepts empirically.
    Keywords: Tasks, skills, competences, framework
    Date: 2021–02

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