nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒11‒22
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Intellectual Assets in Europe By Costantiello, Alberto; Laureti, Lucio; Leogrande, Angelo
  2. Tracking the rise of robots: A survey of the IFR database and its applications By Klump, Rainer; Jurkat, Anne; Schneider, Florian
  3. The direction of technical change in AI and the trajectory effects of government funding By Martina Iori; Arianna Martinelli; Andrea Mina
  4. Technological change and domestic outsourcing By Antonin Bergeaud; Clément Malgouyres; Clément Mazet-Sonilhac; Sara Signorelli
  5. The roles of diversity, complexity, and relatedness in regional development – What does the occupational perspective add? By Tom Broekel; Rune Dahl Fitjar; Silje Haus-Reve
  6. Structural change revisited: The rise of manufacturing jobs in the service sector By Boddin, Dominik; Kroeger, Thilo
  7. Identification of “Valuable” Technologies via Patent Statistics in India: An Analysis Based on Renewal Information By Mohd Shadab Danish; Pritam Ranjan; Ruchi Sharma
  8. A project-level approach to green open innovation By Lorena D'Agostino
  9. Population Growth and Firm Dynamics By Michael Peters; Conor Walsh
  10. The Economics of Medical Procedure Innovation By David Dranove; Craig Garthwaite; Christopher Heard; Bingxiao Wu
  11. Mobilizing innovation for sustainability transitions: a comment on transformative innovation policy By Jan Fagerberg
  12. Do workers, managers, and stations matter for effective policing? A decomposition of productivity into three dimensions of unobserved heterogeneity By Chaudhary, Amit

  1. By: Costantiello, Alberto; Laureti, Lucio; Leogrande, Angelo
    Abstract: In this article we investigate the determinants of the Intellectual Assets in Europe. We use data from the European Innovation Scoreboard of the European Commission in the period 2000-2019 for 36 countries. Data are analyzed using Panel with Fixed Effects, Random Effects, WLS, Pooled OLS, Dynamic Panel at 1 Stage. Results show that the presence of Intellectual Assets in Europe is positively associated with “Enterprise Births”, “Top R&D Spending Enterprises per 10 mln Population”, “Employment Share Manufacturing”, “Share High and Medium high-tech Manufacturing”, “Attractive Research Systems”, “Finance and Support”, “Innovators”, “Sales Impact” and is negatively associated to “Government Procurement of Advanced Technology Products” and “Share Knowledge-Intensive Services”
    Keywords: Innovation, Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2021–11–04
  2. By: Klump, Rainer; Jurkat, Anne; Schneider, Florian
    Abstract: Robots are continuously transforming industrial production worldwide and thereby also inducing changes in a variety of production-related economic and social relations. While some observers call this transformation an unprecedented "revolution", others regard it as a common pattern of capitalist development. This paper contributes to the literature on the effects of the rise of industrial robots in three ways. Firstly, we describe the historic evolution and organizational structure of the International Federation of Robotics (IFR), which collects data on the international distribution of industrial robots by country, industry, and application from industrial robot suppliers worldwide since 1993. Secondly, we extensively analyze this IFR dataset on industrial robots and point out its specificities and limitations. We develop a correspondence table between the IFR industry classification and the International Standard Industrial Classification (ISIC) Revision 4 and shed some light on the price development of industrial robots by compiling data on robot price indices. We further compute implicit depreciation rates inherent to the operational stocks of robots in the IFR dataset and find an average depreciation rate of aggregate robot stocks between 4% and 7% per year between 1993 and 2019. Moreover, tracking the share of industrial robots that are not classified to any industry or application we find that their share in total robot stocks has sharply declined after 2005. We also compare IFR data with other data sources such as UN Comtrade data on net imports and unit prices of industrial robots or data on robot adoption from firm-level surveys in selected countries. Thirdly, we provide a comprehensive overview of the empirical research on industrial robots that is based on the IFR dataset. We identify four important strands of research on the rise of robots: (i) patterns of robot adoption and industrial organization, (ii) productivity and growth effect of robot adoption, (iii) its impact on employment and wages, and (iv) its influence on demographics, health, and politics.
    Keywords: Robots, productivity, growth, employment, industry classification, depreciation rates, IFR
    JEL: C23 E1 J2 J24 O3 O33 O4 O47
    Date: 2021
  3. By: Martina Iori; Arianna Martinelli; Andrea Mina
    Abstract: Government funding of innovation can have a significant impact not only on the rate of technical change, but also on its direction. In this paper, we examine the role that government grants and government departments played in the development of artificial intelligence (AI), an emergent general purpose technology with the potential to revolutionize many aspects of the economy and society. We analyze all AI patents filed at the US Patent and Trademark Office and develop network measures that capture each patent's influence on all possible sequences of follow-on innovation. By identifying the effect of patents on technological trajectories, we are able to account for the long-term cumulative impact of new knowledge that is not captured by standard patent citation measures. We show that patents funded by government grants, but above all patents filed by federal agencies and state departments, profoundly influenced the development of AI. These long-term effects were especially significant in early phases, and weakened over time as private incentives took over. These results are robust to alternative specifications and controlling for endogeneity.
    Keywords: R&D; Technical change; Government subsidies; Technology policy; General purpose technology.
    Date: 2021–11–16
  4. By: Antonin Bergeaud; Clément Malgouyres; Clément Mazet-Sonilhac; Sara Signorelli
    Abstract: Domestic outsourcing has grown substantially in developed countries over the past two decades. This paper addresses the question of the technological drivers of this phenomenon by studying the impact of the staggered diffusion of broadband internet in France during the 2000s. Our results confirm that broadband technology increases firm productivity and the relative demand for high-skill workers. Further, we show that broadband internet led firms to outsource some non-core occupations to service contractors, both in the low and high-skill segments. In both cases, we find that employment related to these occupations became increasingly concentrated in firms specializing in these activities, and was less likely to be performed in-house within firms specialized in other activities. As a result, after the arrival of broadband internet, establishments become increasingly homogeneous in their occupational composition. Finally, we provide suggestive evidence that high-skill workers experience salary gains from being outsourced, while low-skill workers lose out.
    Keywords: broadband, Firm Organisation, Labour Market, Outsourcing
    JEL: G14 G21 O33
    Date: 2021–11–15
  5. By: Tom Broekel; Rune Dahl Fitjar; Silje Haus-Reve
    Abstract: Contemporary research highlights the importance of relatedness, diversity, and complexity for regional economic development. However, few empirical studies simultaneously test the relevance of all these dimensions or examine how their importance varies across distinct spatial contexts. The literature also concentrates on explaining regional diversification, whereas we know less about how they affect economic and employment growth. In addition, most studies have examined industrial relatedness at the expense of the at least similarly crucial occupational dimension when studying knowledge-based regional development. The chapter discusses these issues and presents a study on how occupational diversity, complexity and relatedness shape employment growth in Norway to illustrate how an occupational perspective on regional industries can add to the understanding of evolutionary economic development.
    Keywords: relatedness, diversity, complexity, occupation, region, Norway
    JEL: R11 O31 O33 J24
    Date: 2021–11
  6. By: Boddin, Dominik; Kroeger, Thilo
    Abstract: This paper reconsiders the labor market consequences of structural change over the past 43 years. Taking two different ways of defining manufacturing and service employment as point of departure - according to the industry classification of firms or establishments and according to the occupation and hence the tasks of the workers - we show that structural change is far less pronounced than generally perceived. Manufacturing and service employment numbers based on the occupations of workers deviate markedly from the employment numbers based on the industry classification of employers. The decline in manufacturing jobs in Germany is far lower if the measurement of employment is based on the occupation of the worker. About 52% of manufacturing jobs that were lost in manufacturing industries between 1975 and 2017 are offset by new manufacturing jobs in service industries. This also has important implications for empirical applications. By way of example, we reestimate the effect of international trade on manufacturing employment based on the occupation of the worker. Contrary to previously identified negative effects, we cannot identify significant effects of import exposure on employment in manufacturing occupations. Using detailed, comprehensive German social security data, we show at the worker level that the service sector increasingly acts as a valuable alternative employment option for workers with manufacturing occupations. We estimate the causal effects of a switch to the service sector on employment outcomes by following workers over time after mass layoffs. The results reinforce our claim that structural change is less pronounced than perceived, as workers who retain their initial occupation and switch to employment in the service sector experience no significant differences in future employment trajectories compared to workers who manage to stay in the manufacturing sector.
    Keywords: Employment Structure,Structural Change,Organization of Production,Occupations,Within-Firm Adjustments,Germany
    JEL: J21 J24 L23 E24 D22 F61
    Date: 2021
  7. By: Mohd Shadab Danish (BASE University, Bengaluru); Pritam Ranjan (IIM Indore); Ruchi Sharma (IIM Indore)
    Abstract: This study assesses the degree to which the patent attributes can capture the value of patents across discrete and complex innovations. We use the patents applied between 1995 to 2002 and granted on or before December 2018 from the Indian Patent Office. Here the patent renewal information is utilized as a proxy for the patent value. We have used generalized logistic regression model for the impact assessment analysis. The results reveal that the technology classification (i.e., discrete versus complex innovations) play an important role in patent value assessment, and some technologies are significantly different than the others even within the two broader classifications. Moreover, the non-resident patents in India are more likely to have a higher value than the resident patents. The significance pattern among the technological fields suggests that the patenting laws need to be revisited to enhance the efficiency.
    Keywords: Patent value, Discrete innovation, Complex innovation, Patent reform, Renewal information Classification-O31,O32,O34
    Date: 2021
  8. By: Lorena D'Agostino (University of Milano-Bicocca)
    Abstract: Innovation is a crucial dimension for the transition to a greener Europe, a process that has accelerated notably in the latest years. An open mode has been applied to those innovation that mitigate the impact of economic activities on the natural environment, which is green open innovation (GOI). This is approach is mainly driven by the importance of stakeholders and the specificity of environmental fields, which call for a greater role of the external collaboration in green innovation. Although the interest of management scholars and practitioners in GOI has increased enormously, the empirical GOI literature has overlooked a project-level approach. Firms may have heterogenous openness across different projects depending on the characteristics of the projects or the strategic objective of the firm. This paper contributes to GOI literature by investigating whether green projects are more open than non-green projects in terms of breadth and depth of knowledge sources. Based on a dataset of projects funded by Seventh European research framework, the results confirm the greater openness of environmental-related research projects. These results corroborate the necessity for managers to apply an open mode to green innovation, especially in highly competitive calls such as the European Union framework program.
    Keywords: green open innovation; eco-innovation; sustainability; EU framework programs; FP7; projects; breadth; depth; openness.
    JEL: M20 O32 Q56
    Date: 2021–10
  9. By: Michael Peters; Conor Walsh
    Abstract: Population growth has declined markedly in almost all major economies since the 1970s. We argue this trend has important consequences for the process of firm dynamics and aggregate growth. We study a rich semi-endogenous growth model of firm dynamics, and show analytically that a decline in population growth reduces creative destruction, increases average firm size and concentration, raises market power and misallocation, and lowers aggregate growth in the long-run. We also show lower population growth has positive effects on the level of productivity, making the short-run welfare impacts ambiguous. In a quantitative application to the U.S, we find that the slowdown in population growth since the 1980s and the projected continuation of this trend accounts for a substantial share of the fall in the entry and exit rates and the increase in firm size. By contrast, the impact on markups is modest. The effect on aggregate growth is positive for around two decades, before turning negative thereafter.
    JEL: J11 L11 O3 O4 O44
    Date: 2021–10
  10. By: David Dranove; Craig Garthwaite; Christopher Heard; Bingxiao Wu
    Abstract: This paper explores the economic incentives for medical procedure innovation. Using a proprietary dataset on billing code applications for emerging medical procedures, we highlight two mechanisms that could hinder innovation. First, the administrative hurdle of securing permanent, reimbursable billing codes substantially delays innovation diffusion. We find that Medicare utilization of innovative procedures increases nearly nine-fold after the billing codes are promoted to permanent (reimbursable) from provisional (non-reimbursable). However, only 29 percent of the provisional codes are promoted within the five-year probation period. Second, medical procedures lack intellectual property rights, especially those without patented devices. When appropriability is limited, specialty medical societies lead the applications for billing codes. We indicate that the ad hoc process for securing billing codes for procedure innovations creates uncertainty about both the development process and the allocation and enforceability of property rights. This stands in stark contrast to the more deliberate regulatory oversight for pharmaceutical innovations.
    JEL: I0 I1 O3
    Date: 2021–10
  11. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: The topics addressed in this paper concern the (much-needed) transition to sustainability and what role (innovation) policy can play in speeding up such changes. In their Discussion Paper Schot and Steinmueller (this issue) argue that the existing theorizing and knowledge bases within the field of innovation studies are “unfit” for this task and that a totally new approach is required. This paper takes issue with this claim. Policy advice, it is argued, needs to be anchored in the accumulated research on the issue at hand, in this case, innovation. The paper therefore starts by distilling some important insights on innovation from the accumulated research on this topic and, with this in mind, considers various policy approaches that have been suggested for influencing innovation and sustainability transitions. Finally, the lessons for the development and implementation of transformative innovation policy are considered. It is concluded that the existing theorizing and knowledge base in innovation studies may be of great relevance when designing policies for dealing with climate change and sustainability transitions.
    Date: 2021–11
  12. By: Chaudhary, Amit (University of Warwick)
    Abstract: Misallocation of resources in an economy makes firms less productive. I document the roles of heterogeneity, sorting, and complementarity in a framework where workers, managers, and firms interact to shape productivity. The approach I follow uses the movement of workers and managers across firms to identify the distribution of productivity. I webscraped novel microdata of crime reports from the Indian police department and combined them with the worker-level measurement of productivity. Using this data I show that the third source of heterogeneity in the form of manager ability is an important driver of differences in firm productivity. I empirically identify complementarities between workers, managers, and firms using my estimation methodology. Counterfactual results show that reallocating workers by applying a positive assortative sorting rule can increase police department productivity by 10%.
    Date: 2021

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