nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒03‒15
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Deepening or delinking? Innovative capacity and global value chain participation in the ICT sectors By Lema, Rasmus; Pietrobelli, Carlo; Rabellotti, Roberta; Vezzani, Antonio
  2. The Impact of Import Competition from China on Firm-level Productivity Growth in the EU By Klaus S. Friesenbichler; Agnes Kügler; Andreas Reinstaller
  3. Science and the Market for Technology By Ashish Arora; Sharon Belenzon; Jungkyu Suh
  4. The Impact of Regulation on Innovation By Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John
  5. Innovation policy to restore American prosperity By John Van Reenen
  6. Progress of Digital Platforms and their Impact on Japan's Industrial Competitiveness By MOTOHASHI Kazuyuki
  7. Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation By Michael Landesmann; Isilda Mara
  8. Automation-driven innovation management? Toward Innovation-Automation-Strategy cycle By Piotr Tomasz Makowski; Yuya Kajikawa
  9. Reflections Guiding Smart Specialisation Strategies Impact Assessment By Caroline Cohen
  10. The Geography of Job Tasks By Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
  11. High-speed Rail and the Spatial Distribution of Economic Activity: Evidence from Japan's Shinkansen By HAYAKAWA Kazunobu; Hans R.A. KOSTER; TABUCHI Takatoshi; Jacques-François THISSE
  12. Consumption Access and Agglomeration: Evidence from Smartphone Data By Yuhei Miyauchi; Kentaro Nakajima; Stephen J. Redding

  1. By: Lema, Rasmus (Aalborg University, and University of Johannesburg); Pietrobelli, Carlo (UNU-MERIT, and University Roma Tre); Rabellotti, Roberta (University of Pavia, and Aalborg University); Vezzani, Antonio (University Roma Tre)
    Abstract: Innovation trajectories in global value chains can take highly differentiated pathways. Firms and other organisations operating in a sector in a given country may gain or lose innovative capacity over time compared to their peers in other countries. In this paper we address the question: do stylised trajectories emerge from the analysis of countries' relative innovative capacity and global value chain participation? We draw explorative insights from a cluster analysis of 45 countries on the subsectors of the information and communication technology industry: hardware and software. Our analysis uncovers remarkable differences across sectors and countries. We identify different trajectories and discuss the sub-sectoral specificities which contribute to explaining these differences. The association between the strengthening of innovative capacity and deeper insertion in global value chains applies to only a handful of countries and only in the software subsector. These findings raise questions for future research on innovation in global value chains.
    Keywords: Global value chains, Innovation capacity, Innovation trajectories, Hardware, Software, ICT
    JEL: F23 D23 L22 L25 O10 O32 O38
    Date: 2021–03–01
  2. By: Klaus S. Friesenbichler; Agnes Kügler; Andreas Reinstaller
    Abstract: We revisit the impact of rising imports from China on within firm labour productivity growth in the EU. The period analysed is 2003 through 2016 and thus covers the recent increase of technology-intensive imports from China. We find that higher fractions of Chinese imports in aggregate imports slow down labour productivity growth of domestic firms in Europe. The adverse effect becomes more pronounced at higher growth rates. Multinationals are able to partly compensate the negative effects of import competition and benefit from Chinese imports at higher productivity growth intensities. The effects are strongest for local firms and firms in low tech industries. No effects were found for firms in high-tech industries.
    Keywords: Import Competition, Multinational Firms, Productivity, Manufacturing, EU, China
    Date: 2021–02–12
  3. By: Ashish Arora; Sharon Belenzon; Jungkyu Suh
    Abstract: Well functioning Markets for Technology (MFT) allow inventors to sell their inventions to others that may derive more value from them. We argue that the growing reliance on science in inventions enhances MFT. In addition to higher quality inventions, reliance on science may enhance gains from trade and reduce the transfer cost of knowledge and other transaction costs. Using large scale data, we show that patents citing science are more likely to be traded, especially for novel patents and for smaller inventors. Leveraging the fall of the Berlin Wall as a source of exogenous variation in the relevant scientific knowledge to technological fields, we confirm reliance on science increases the likelihood that the invention will be traded
    JEL: L24 O3 O31 O33 O34 O36
    Date: 2021–03
  4. By: Aghion, Philippe (Birkbeck College, University of London); Bergeaud, Antonin (CEP, London School of Economics); Van Reenen, John (MIT Sloan School of Management)
    Abstract: Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labor regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to "swing for the fence" with more radical (and labor saving) breakthroughs.
    Keywords: innovation, regulation, patents, firm size
    JEL: O31 L11 L51 J8 L25
    Date: 2021–01
  5. By: John Van Reenen
    Abstract: The new US administration has the opportunity to reset an economic model that has failed to deliver prosperity for millions of Americans for decades. John Van Reenen calls for a Grand Innovation Challenge Fund - federal funding for research and development to fuel technological innovation and raise productivity growth.
    Keywords: r&d, innovation, patents, tax system, productivity, growth
    Date: 2021–03
  6. By: MOTOHASHI Kazuyuki
    Abstract: Digitalization has a transformative impact on innovation in firms and markets, and new business models based on digital platforms are disrupting traditional industries. However, understanding the impact of digital platforms on the supply side of manufacturing industries, where Japan's industrial competitiveness is based, is insufficient. This paper conducts and discusses a review of existing studies on digital platforms and the relationship between digitalization and Japan's industrial competitiveness. A platform business can be categorized into three groups, type 1 (internet platformer type), type 2 (producer ecosystem type) and type 3 (IoT data-use type), depending on the existence of direct and/or indirect network effects on the producer and consumer sides of the platform. We have compared these three types of platforms together with "pipeline businesses" (with a traditional supply chain model) regarding the impact of digitalization on each business model. Our analysis found that digitalization does not directly affect the existing pipeline model, as is shown in the automotive industry, for example. However, the convergence of virtual and physical environments (CPS: Cyber-Physical System) redefines the boundaries of existing markets, which introduces a chance of existing pipeline models being displaced by new integrated services, based on platform models.
    Date: 2021–01
  7. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The high outward mobility that has characterised the countries in the Western Balkan (WB) region over the past three decades is often seen as tightly linked to severe labour market imbalances and persistently low utilisation of human capital over time. To shed light on these issues, we estimate a system of equations that accounts for the effects of labour market determinants and human capital on migration and vice versa. The period under analysis is 2005-2019 and considers mobility from five of the WB countries to the EU15. The empirical results confirm the importance of wage gaps and their changes as an important pull factor for driving outward mobility from the WB region that can be persistent over time. Also, gaps in human capital emerge as a powerful determinant for explaining mobility into countries where returns on human capital are higher.
    Keywords: Migration, Labour Markets, Southeast Europe, Balkans, pVAR modelling, European integration
    JEL: F22 J60 J61 O15 C32 C13 P20 P27
    Date: 2021–03
  8. By: Piotr Tomasz Makowski; Yuya Kajikawa
    Abstract: There is a resurging interest in automation because of rapid progress of machine learning and AI. In our perspective, innovation is not an exemption from their expansion. This situation gives us an opportunity to reflect on a direction of future innovation studies. In this conceptual paper, we propose a framework of innovation process by exploiting the concept of unit process. Deploying it in the context of automation, we indicate the important aspects of innovation process, i.e. human, organizational, and social factors. We also highlight the cognitive and interactive underpinnings at micro- and macro-levels of the process. We propose to embrace all those factors in what we call Innovation-Automation-Strategy cycle (IAS). Implications of IAS for future research are also put forward. Keywords: innovation, automation of innovation, unit process, innovation-automation-strategy cycle
    Date: 2021–03
  9. By: Caroline Cohen (European Commission - JRC)
    Abstract: This report summarises and analyses the main findings of the reflection and collective work engaged with 12 territories from across Europe that was carried out from March to December 2020 with the aim to collect evidence on the potential impact of S3 in the quality of policy governance and innovation ecosystem, as well as, its effects in terms of growth and jobs. Based on the reflection carried out with a wide range of member states and regions across Europe, it highlights different types of methodological approaches and measures that were developed and are foreseen by policy-makers to assess the impact of their research and innovation strategies at different territorial levels. Although participants advocate a 10 to 15 years' time span to fully grasp the impact of the induced changes related to the implementation of S3, the report shows that the Smart Specialisation concept is perceived as a pivotal enabler for industry renewal, bringing together stakeholders in the ecosystem and fostering international value chains. The experimental nature of the Smart Specialisation approach can play a central role in supporting new and innovative activities, help territories discover new opportunities and pursue new paths of development towards more sustainable and inclusive growth models.
    Keywords: Smart Specialisation - Impact Assessment - Territorial development - Industrial Innovation - Global value chains
    Date: 2021–02
  10. By: Enghin Atalay (Federal Reserve Bank of Philadelphia); Sebastian Sotelo (University of Michigan); Daniel Tannenbaum (University of Nebraska-Lincoln)
    Abstract: We present new facts about the geography of work using online job ads and introduce new measures of job tasks, technology requirements, and the degree of specialization within firms or occupations. We show that the (i) intensity of interactive and analytic tasks, (ii) technological requirements, and (iii) task specialization all increase with city size. The gradient for tasks and technologies is steeper for jobs requiring a college degree. We show that these facts help account for the urban wage premium, both in aggregate and across skill groups.
    Keywords: geography, job tasks, education
    JEL: J20 J24 R12 R23
    Date: 2021–02–27
  11. By: HAYAKAWA Kazunobu; Hans R.A. KOSTER; TABUCHI Takatoshi; Jacques-François THISSE
    Abstract: We investigate the effects of high-speed rail (HSR) on the location of economic activity. We set up a spatial quantitative general equilibrium model that incorporates spatial linkages between firms (including manufacturing and services), agglomeration economies, as well as commuting and migration. The model is estimated for Japan in order to investigate the impacts of the Shinkansen, i.e., the first HSR ever built. We show that traveling by train strengthens firm linkages, but is less important for commuting interactions. The Shinkansen increases welfare by about 5%. We show that extensions of the Shinkansen network may have large effects (up to a 30% increase in employment) on connected municipalities, although the effects are smaller for places with higher fixed costs. Our counterfactuals show that, without the Shinkansen, Tokyo and Osaka would be 6.3% and 4.4% larger, respectively.
    Date: 2021–01
  12. 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).
    JEL: R2 R3 R41
    Date: 2021–02

This nep-tid issue is ©2021 by Fulvio Castellacci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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