nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒08‒22
fourteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Measuring the Technological Bias of Robot Adoption and its Implications for the Aggregate Labor Share By Michael Koch; Ilya Manuylov
  2. The interplay between product innovation, publishing, patenting and developing standards By Blind, Knut; Krieger, Bastian; Pellens, Maikel
  3. The Kaldor-Verdoorn Law’s at the Age of Robots and AI. By Andrea Borsato; Andre Lorentz
  4. ICT Expansion, Innovation Dynamics in the EU and Climate Neutrality-related Policy Options By Paul J. J. Welfens; Tian Xiong; David Hanrahan
  5. Stagnation despite ongoing innovation: Is R&D expenditure composition a missing link? An empirical analysis for the US (1948-2019) By Giovanna Ciaffi; Matteo Deleidi; Stefano Di Bucchianico
  6. Regional structural change and the effects of job loss By Arntz, Melanie; Ivanov, Boris; Pohlan, Laura
  7. The performance of Italian Industrial Districts in and out of the 2008-2012 crisis By Valter Di Giacinto; Andrea Sechi; Alessandro Tosoni
  8. PATENTS, FAMILY, AND SIZE. EVIDENCE FROM ITALIAN MANUFACTURING FIRMS By Francesco Aiello; Paola Cardamone; Lidia mannarino; Valeria Pupo
  9. Transformative policies for sustainable innovation systems By Lundvall, Bengt-Åke
  10. Technology, resources and geography in a paradigm shift: the case of critical and conflict materials in ICTs By Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
  11. The value of data in digital-based business models: Measurement and economic policy implications By Carol Corrado; Jonathan Haskel; Massimiliano Iommi; Cecilia Jona-Lasinio
  12. Analysis of the Effects of Changes in the Japanese R&D Tax Credit System in 2015: Impact of expansion of tax credits for open innovation and abolition of the tax credit carryover system (Japanese) By IKEUCHI Kenta
  13. The Digital Transition for a Sustainable Mobility Regime? A Long-Run Perspective. By Ralph Hippe; Damien Demailly; Claude Diebolt
  14. Natural Selection and Innovation-Driven Growth By Chu, Angus; Cozzi, Guido; Fan, Haichao

  1. By: Michael Koch (Department of Economics and Business Economics, FIND - Research Centre for Firms and Industry Dynamics, Aarhus University); Ilya Manuylov (Department of Economics and Business Economics, FIND - Research Centre for Firms and Industry Dynamics, Aarhus University)
    Abstract: This paper investigates the technological bias of robot adoption using a rich panel data set of Spanish manufacturing firms over a 25-year period. We apply the production function estimation when productivity is multidimensional to the case of an automating technology, to reveal the Hicks-neutral and labor-augmenting technological change brought about by robot adoption within firms. Our results indicate a causal effect of robots on Hicks-neutral and labor-augmenting components of productivity. The biased technological change turns out to be an important determinant of the decline in the aggregate share of labor in the Spanish manufacturing sector.
    Keywords: Robots, Automation, Technological change, Productivity, Labor share
    JEL: O33 J24 D24
    Date: 2022–07–18
  2. By: Blind, Knut; Krieger, Bastian; Pellens, Maikel
    Abstract: Firms use a variety of practices to disclose the knowledge generated by their R&D activities, including, but not limited to, publishing findings in scientific journals, patenting new technologies, and contributing to developing standards. While the individual effects of engaging in the listed practices on firm innovation are well-understood, the existing literature has not considered their interrelation. Therefore, our study examines if the three practices are complements, substitutes, or unrelated in terms of firms' performance with product innovations new to the market. Our analysis builds on a sample of innovation-active firms from the German Community Innovation Survey, which includes information on the development of standards, enhanced with information on firms' engagement in patenting and publishing. We find that 26% of innovation-active firms engage in at least one of the three practices, and 22% of engaging firms combine them. Using supermodularity tests, we show that publishing and patenting as well as patenting and developing standards are substitutes. Publishing and developing standards are not significantly linked. Based on our findings, we derive implications for innovation management and policy.
    Keywords: Standardization,patents,scientific publications,product innovation
    JEL: O31 O32 O34
    Date: 2022
  3. By: Andrea Borsato; Andre Lorentz
    Abstract: This paper contributes to the literature around the Kaldor-Verdoorn’s law and analyses the impact of robotisation on the channel through which the law shapes labour-productivity growth. We start with a simple evolutionary interpretation of the law that combines Kaldorian and Post-Keynesian arguments with the neo-Schumpeterian theory of innovation and technological change. Then we apply a GMM estimator to a panel of 17 industries in 25 OECD capitalist economies for the period 1990-2018. After elaborating on the general evidence of the Kaldor-Verdoorn’s law in the sample, we investigate the effect of increasing robotisation. The estimates suggest that for industries with a higher-than-average robot density, the increasing adoption of robots weakens, at least, the meso-economic channel that relates productivity growth to mechanisation. Yet, the higher degree of robotisation strengthens the mechanism that links labour productivity growth at the industrial level to the macro-level dynamic increasing returns to scale that emerge from a general expansion of economic activities through the many interactions between sectors. Such results are in agreement with the empirical literature that suggests different impacts from robotisation on the basis of the level of economic activity considered.
    Keywords: Labour productivity, Kaldor-Verdoorn’s law, Robotisation, GMM.
    JEL: J23 O33 O47
    Date: 2022
  4. By: Paul J. J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tian Xiong (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); David Hanrahan (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Climate change continues to challenge the global economy; particularly in industrialized countries, governments are increasingly coming under pressure to develop and implement adequate climate protection and innovation policies, as well as to co-operate in aligning them. At the same time, firms are also becoming more active in “greening†, by innovating in terms of greener products and processes in order to contribute to climate protection, stay at the technological frontier, and benefit from the increased environmental and sustainability awareness on the part of households, competitors and suppliers. Key areas of mutual concern to both policymakers and firms, therefore, include the determinants of green innovations – product or process – and how government can promote such innovation dynamics. Part of green innovations are covered by the European Union’s Community Innovation Survey (CIS), while the Organisation for Economic Co-operation and Development (OECD) also has data on green patenting dynamics. Using panel data on 35 European countries and covering the period of 2007-2018, including multiple waves of the CIS in a novel approach, we present an analysis on green innovation. The empirical analysis presented shows how key determinants of green innovation from the literature affect selected measures of green innovation. We find that the inward FDI stock intensity positively affects green process innovations (including manufacturing), while the ICT R&D Investment-GDP ratio has a negative impact on green innovativeness. As regards firms with both green process and green product innovations, GDP per capita is found to be a positive driver of innovativeness (excluding manufacturing) and is also a positive driver of green process innovations in firms with only green process innovations – but, paradoxically, is a negative driver of green product innovations in firms with only green product innovations. Regarding the rule of law, there is a positive impact on green innovations. The median age of the labor force has a negative impact on process innovations (excluding manufacturing), while the sign is positive for green process and product innovating firms (both including and excluding manufacturing). A green RCA variable is positively significant for green product innovating firms and green process and product innovators (including and excluding manufacturing). Our findings allow to suggest areas in which national and supranational policymakers should become more active to promote and foster green innovation in Europe.
    Keywords: Green innovation, product innovation, process innovation, ICT, Community Innovation Survey
    JEL: L86 Q55 O30 O31
    Date: 2022–07
  5. By: Giovanna Ciaffi; Matteo Deleidi; Stefano Di Bucchianico
    Abstract: Among the explanations for prolonged economic stagnation in advanced economies we find those that highlight the role of technical progress and its weakening impact on potential growth. Several contributions stress the apparent paradox of technological development and innovation going hand in hand with slowing labour productivity growth. This discourse is in turn linked to numerous factors, among which the pattern of research productivity, that appears to be falling in the last decades. The contribution of this article is to analyse the role of innovation expenditures composition, and its effects on productivity. We study whether productivity stagnation can be (partially) explained by the continuously falling ratio between public and private expenditures in innovation in the USA. We carry out an SVAR analysis of the US case during the period 1948Q1-2019Q4. In the empirical exercise we estimate the effect of public expenditure in innovation on productivity, private R&D, and GDP, comparing the outcomes with those relative to private expenditure in innovation. According to our results, the public type of innovation spending exhibits a positive effect on productivity and GDP, and it has a greater effect than private expenditure in innovation. In addition to this, public expenditure in innovation exerts a strong crowding-in effect on private investment in R&D. Therefore, according to the evidence we find, we maintain that the focus on the prolonged and sustained fall of public expenditure in innovation in relation to private expenditure of the same type helps in explaining lasting stagnation
    Keywords: Secular Stagnation, public and private R&D, innovation policy, research productivity, productivity growth
    JEL: O47 O32 O40
    Date: 2022–04
  6. By: Arntz, Melanie; Ivanov, Boris; Pohlan, Laura
    Abstract: Routine-intensive occupations have been declining in many countries, but how does this affect individual workers' careers if this decline is particularly severe in their local labor market? This paper uses administrative data from Germany and a matched difference-in-differences approach to show that the individual costs of job loss strongly depend on the task-bias of regional structural change. Workers displaced from routine manual occupations have substantially higher and more persistent employment and wage losses in regions where such occupations decline the most. Regional and occupational mobility partly serve as an adjustment mechanism, but come at high cost as these switches also involve losses in firm wage premia. Non-displaced workers, by contrast, remain largely unaffected by structural change.
    Keywords: routine-biased structural change,local labor markets,displacement,mass-layoffs,plant closures,matching,difference-in-differences,event study
    JEL: J24 J63 J64 J65 O33 R11
    Date: 2022
  7. By: Valter Di Giacinto (Bank of Italy); Andrea Sechi (Bank of Italy); Alessandro Tosoni (Bank of Italy)
    Abstract: By exploiting firm level balance sheet data from the Cerved database and employment data from the INPS database, we provide a detailed description of the productivity performance of Italian industrial districts firms over the 2003-2017 period. The main structural features of industrial districts are first compared with those of the other types of local labour market areas. The performance of district firms is subsequently analysed both overall and separately for the firms belonging to the core district industry and the remaining companies. We find evidence of a positive and sizeable district productivity premium, increasing over the period of analysis. However, in order to consolidate their performance, industrial districts had to undergo significant structural changes. Medium-sized and large firms have grown in importance, also through a process of capital deepening that involved both tangible and intangible fixed assets. At the same time, structural adaptation involved the acquisition of a more significant role by firms not operating in the main district industry.
    Keywords: industrial districts, agglomeration economies, structural adaptation
    JEL: L25 L60 R11
    Date: 2022–06
  8. By: Francesco Aiello (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Paola Cardamone (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Lidia mannarino (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Valeria Pupo (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy))
    Abstract: This study explores whether the probability to patent differ between family and non-family firms, and whether any potential difference between firm-type is moderated by size. The analysis is based on a large archive of patenting activities (Orbis–PATSTAT dataset) carried out by around 3700 Italian manufacturing firms over the 2010–2017 period. The results from a probability model show that, on average, family firms patent less than non-family firms (the estimated average marginal effect is -0.0325). Firm size matters, as its average marginal effect is 0.0212, suggesting that the probability of patenting increases with size, no matter the firm ownership. The size effect differs, however, between family and non-family firms. It is demonstrated not only that family firms remain less likely to patent than non-family firms, but also that their disadvantages increase as they grow in size: in large firms, the probability of patenting is 0.22 for family firms and 0.39 for non-family firms. Importantly, the results hold when considering patent counts, citations and a number of additional sensitivity tests.
    Keywords: Family firms, Patenting activities, Firm size
    JEL: D22 L25 L60 O30
    Date: 2022–07
  9. By: Lundvall, Bengt-Åke (Department of Economic History, Lund University)
    Abstract: In this paper, we criticize attempts to present narrow perspectives on innovation policy as reflecting the use of the concept innovation system as policy framing. While it is correct that innovation policy, at least until recently, has given priority to economic growth and low priority to global challenges such as climate change and income inequality this is in no way immanent in the innovation system concept. To illustrate, we introduce concepts and perspectives related to the innovation system approach which are particularly useful, when it comes to develop innovation policies aiming at system transformation. They include the uneven rhythm of respectively incremental innovation, radical innovation, and technological revolutions, shifts in technological paradigms, system transformation at the organisational level and the distinction between policies aiming at path dependent innovation promotion and policies aiming at system change. We also point to the usefulness of the learning economy perspective that has been developed in close connection with the innovation system literature. We conclude that there is a need to combine different theoretical framings as inspiration for transformative innovation policy. In addition, we argue, first, that all these framings need to have a double focus on climate change and global income inequality and, second, that they all need to go beyond national perspectives and consider policies aiming at system transformation at the global level.
    Keywords: Innovation system; Transformative innovation policy; Learning economy; Global governance; Climate change; Income inequality
    JEL: N70 O30
    Date: 2022–07–01
  10. By: Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
    Abstract: Critical and conflict materials (CCMs) are providing an important material infrastructure for recent technological shifts. Relying on text analysis of US Patent and Trademark Office (USPTO) data, this exploratory study examines the technological and geographical linkages between technological paradigms and selected CCMs. Our descriptive analysis finds evidence of a clear association between information and communication technologies (ICTs) and CCM intensity over time, and of a striking resource–technology divide between value-creating and -extracting activities across the Global North and the Global South and their regions. The paper emphasizes the need for a more critical, spatially sensitive approach to studying resource-based technological change to expose its uneven development consequences.
    Keywords: critical and conflict materials; paradigm shift; technological demand; geography of technology; geography of resource supply; STICERD; LSE; 2019-2020; Undergraduate Research Fellowship from the Department of Geography & Environment; LSE; FORTE; 2016-07099; T&F deal
    JEL: O30 Q34 Q55 R11
    Date: 2022–04–15
  11. By: Carol Corrado; Jonathan Haskel; Massimiliano Iommi; Cecilia Jona-Lasinio
    Abstract: A defining aspect of the digital age is data and its business use. Data have become an important input for firms (e.g., to train artificial intelligence algorithms) but data use is neither accounted for in macroeconomic statistics nor part of business contracts for goods and services provided to customers.This paper puts data and data investments in a framework amenable to measurement and policy analysis aimed at sharpening our understanding of the modern economies. Data is conceptualized as an intangible asset: a storable, nonrival (yet excludable) factor input that is only partially captured in existing macroeconomic and financial statistics. We provide experimental estimates of data investment designed to encompass data and data intelligence for six major European countries (France, Germany, Italy, Spain, and the United Kingdom) and we found an average value of 5 to 6.5 percent of market sector gross value added in 2010-2018 (Corrado et al, 2022). We also develop a simulation exercise to test the potential growth contribution of data capital, and we find that even limited diffusion of data capital could raise labor productivity growth as much as ½ percentage point per year, but outcomes are highly dependent on factors influenced by policy settings.
    Keywords: data, innovation, intangible capital, productivity growth
    JEL: E22 O47 E01
    Date: 2022–08–08
  12. By: IKEUCHI Kenta
    Abstract: The purpose of this study is to empirically analyze the effect of changes in the Japanese R&D tax system implemented in 2015 on the quantity and quality of R&D investment. As a result of analysis using counter-factual simulation, it was found that the abolition of the tax credit carryover system and the expansion of tax credits for open innovation (OI) in 2015 contributed to the decrease in total R&D investment and the increase in external expenditure R&D investment, respectively. Regarding the tax revenue, the increase in tax revenue due to the abolition of the tax credit carryover system was almost equal to the decrease in R&D investment, and the decrease in tax revenue due to the expansion of tax credits for OI was smaller than the increase in external R&D investment. In addition, the negative effect of the abolition of the tax credit carryover system and the positive effect of the expansion of tax credits for OI almost offset each other, and it seems that there was no significant effect on the labor productivity as a whole. The expansion of tax credits for OI in 2015 had the effect of increasing the number of industry-academia joint application patents. As a conclusion, the system changes in the R&D tax system in 2015 had the effect of promoting open innovation such as joint research between industry and academia and boosting productivity, but at the same time, R&D investment was reduced by abolishing the tax credit carryover system.
    Date: 2022–07
  13. By: Ralph Hippe; Damien Demailly; Claude Diebolt
    Abstract: New Information and Communication Technologies (ICTs) have been praised to massively transform our economies, and to be the foundation of a new and more sustainable mobility regime. But will they? And if so, how could ICTs help building it? While the newest ICTs such as the internet are in some ways unique, in other respects they have historical predecessors (such as the telegraph and the telephone) that are worth considering. This paper reviews the literature and shows that ‘older’ ICTs have transformed our mobility regime in significant and unpredictable ways. In particular, they have supported and made more efficient new transport modes, contributed to the geographical concentration and dispersion trends of economic activities and changed how and how much we connect to our families and friends. ICTs can help building more sustainable mobility e.g., by making transport more efficient or reducing mobility demand in some cases, but overall the interactions between mobility and ICTs turn out to be important, diverse and complex.
    Keywords: Green deal, ICT, Digital transition, Mobility, Technological transformation, Innovation.
    JEL: N10 N90 O14 O18 O33 R41 R42
    Date: 2022
  14. By: Chu, Angus; Cozzi, Guido; Fan, Haichao
    Abstract: This study develops an innovation-driven growth model with natural selection of heterogeneous households and endogenous takeoff. Families differ in their ability to accumulate human capital. In an early stage of development, households with lower education ability accumulate less human capital but choose to have more children and enjoy an evolutionary advantage. In a later stage of development, families with high education ability increase their number of children as their human capital rises over time. In the long run, high-ability households accumulate more human capital, and all families choose the same steady-state fertility rate. Therefore, households' population share and human capital converge to stationary distributions. Initially, the heterogeneity of households makes it more likely for an endogenous takeoff to occur; however, the temporary evolutionary disadvantage of high-ability families has a lasting negative impact on long-run growth. Finally, we provide evidence that heterogeneity in education indeed has adverse effects on education, innovation and economic growth in the long run.
    Keywords: natural selection; innovation; economic development
    JEL: O3 O4
    Date: 2022–06

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