nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒09‒26
eight papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Of Academics and Creative Destruction: Startup Advantage in the Process of Innovation By Julian Kolev; Alexis Haughey; Fiona Murray; Scott Stern
  2. Does robotization affect job quality? Evidence from European regional labour markets By Jos\'e-Ignacio Ant\'on; Rudolf Winter-Ebmer; Enrique Fern\'andez-Mac\'ias
  3. Is it all the same? Types of innovation and their relationship with direct control, technical control and algorithmic management across European firms By Marta Fana; Davide Villani
  4. Credit constraints and open innovation strategies By Pierluigi Murro; Valentina Peruzzi
  5. New Frontiers: The Origins and Content of New Work, 1940–2018 By David Autor; Caroline Chin; Anna M. Salomons; Bryan Seegmiller
  6. Dynamics of First-Time Patenting Firms By Nilsen, Øivind A.; Raknerud, Arvid
  7. Automation After the Assembly Line: Computerized Machine Tools, Employment and Productivity in the United States By Leah Platt Boustan; Jiwon Choi; David Clingingsmith
  8. Innovation union:Costs and benefits of innovation policy coordination By Teodora Borota Milicevic; Fabrice Defever; Giammario Impullitti; Adam Hal Spencer

  1. By: Julian Kolev; Alexis Haughey; Fiona Murray; Scott Stern
    Abstract: What is the role of startups within the innovation ecosystem? Since 2000, startups have grown in their share of commercializing research from top U.S. universities; however, prior work has little to say on the particular advantages of startup ventures in the innovation process relative to more traditional alternatives such as academia and established private-sector incumbents. We develop a simple model of startup advantage based on private information held by the initial inventor, and generate predictions related to the value and impact of startup innovation. We then explore these predictions using patents granted within the regional ecosystems of top-25 research universities from 2000 to 2015. Our results show a significant startup advantage in terms of forward citations and outlier-patent rates. Further, startup innovation is both more original and more general than innovation by incumbent firms. Moreover, startups that survive to become “scale-ups” quickly grow to dominate their regional innovation ecosystems. Our findings have important implications for innovation policy.
    JEL: L24 L26 M13 O31 O32 O34
    Date: 2022–08
  2. By: Jos\'e-Ignacio Ant\'on (University of Salamanca); Rudolf Winter-Ebmer (Johannes Kepler University Linz); Enrique Fern\'andez-Mac\'ias (Joint Research Centre)
    Abstract: Whereas there are recent papers on the effect of robot adoption on employment and wages, there is no evidence on how robots affect non-monetary working conditions. We explore the impact of robot adoption on several domains of non-monetary working conditions in Europe over the period 1995-2005 combining information from the World Robotics Survey and the European Working Conditions Survey. In order to deal with the possible endogeneity of robot deployment, we employ an instrumental variables strategy, using the robot exposure by sector in other developed countries as an instrument. Our results indicate that robotization has a negative impact on the quality of work in the dimension of work intensity and no relevant impact on the domains of physical environment or skills and discretion.
    Date: 2022–08
  3. By: Marta Fana (European Commission - JRC); Davide Villani (European Commission - JRC)
    Abstract: Using firm-level data from 28 European countries, this paper explores the relationship between two types of innovation (process and digital) and different forms of control (direct and indirect) at the workplace. We find that (1) digital innovation is more common than process innovation; (2) more innovative firms record higher levels of indirect control (especially related to algorithmic management) and lower level of direct control (3) the relationship between innovation and control is not uniform across European countries. These findings nurture the debate on the future of work as the process of digitalisation may promote a shift towards indirect forms of control and contribute to reduce the degree of direct control. Moreover, these changes may also affect the bargaining process and lead to a redefinition of managerial roles, though it should be acknowledged that social and institutional factors play an important role in shaping this process.
    Keywords: Process innovation; Digital innovation; Algorithmic management; Control, European firms.
    Date: 2022–09
  4. By: Pierluigi Murro (LUISS University); Valentina Peruzzi (Sapienza University of Rome)
    Abstract: We investigate whether credit constraints affect firms' reliance on open innovation strategies. Using data on 7,000 Italian small and medium-sized enterprises, we find that credit restricted firms are 26\% more likely to collaborate for innovation than firms not suffering from credit constraints. This result is confirmed both for product and process innovators. However, when accounting for the intensity of the product innovation, we find a negative impact of credit rationing on open innovation for firms introducing completely new products in the market. This confirms the relevance of opportunity costs in the choice between internal and open innovation in presence of credit restrictions. We also look at the role played by innovation partners. In particular, we show that the existence of credit constraints positively affects the probability of firms innovating with their suppliers. Finally, we provide evidence that the impact of credit frictions on innovation collaborations varies with the innovation environment and with the socio-economic conditions of the province where firms are located.
    Keywords: credit constraints; open innovation; product innovation; process innovation
    JEL: O36 G32 D22
    Date: 2022–09
  5. By: David Autor; Caroline Chin; Anna M. Salomons; Bryan Seegmiller
    Abstract: We address three core questions about the hypothesized role of newly emerging job categories ('new work') in counterbalancing the erosive effect of task-displacing automation on labor demand: what is the substantive content of new work; where does it come from; and what effect does it have on labor demand? To address these questions, we construct a novel database spanning eight decades of new job titles linked both to US Census microdata and to patent-based measures of occupations’ exposure to labor-augmenting and labor-automating innovations. We find, first, that the majority of current employment is in new job specialties introduced after 1940, but the locus of new work creation has shifted—from middle-paid production and clerical occupations over 1940–1980, to high-paid professional and, secondarily, low-paid services since 1980. Second, new work emerges in response to technological innovations that complement the outputs of occupations and demand shocks that raise occupational demand; conversely, innovations that automate tasks or reduce occupational demand slow new work emergence. Third, although flows of augmentation and automation innovations are positively correlated across occupations, the former boosts occupational labor demand while the latter depresses it. Harnessing shocks to the flow of augmentation and automation innovations spurred by breakthrough innovations two decades earlier, we establish that the effects of augmentation and automation innovations on new work emergence and occupational labor demand are causal. Finally, our results suggest that the demand-eroding effects of automation innovations have intensified in the last four decades while the demand-increasing effects of augmentation innovations have not.
    JEL: E24 J11 J23 J24
    Date: 2022–08
  6. By: Nilsen, Øivind A. (Dept. of Economics, Norwegian School of Economics and Business Administration); Raknerud, Arvid (SSB)
    Abstract: This paper investigates firm dynamics in the period before, during, and after an event consisting of a first published patent application. The analysis is based on patent data from the Norwegian Industrial Property Office merged with data from several business registers covering a period of almost 20 years. We apply an event study design and use matching to control for confounding factors. The first patent application by a young firm is associated with significant growth in employment, output, assets and public research funding. Moreover, our results indicate that economic activity starts to increase at least three years ahead of the first patent application. However, we find no evidence of additional firm growth after patent approval for successful applicants. Our findings indicate that the existence of a properly functioning patenting system supports innovation activities, especially early in the life cycle of firms.
    Keywords: Patenting; Firm performance; Panel data; Event study design
    JEL: C33 D22 O34
    Date: 2022–08–30
  7. By: Leah Platt Boustan; Jiwon Choi; David Clingingsmith
    Abstract: Since the 1970s, computerized machine tools have been replacing semi-skilled manufacturing workers, contributing to factory automation. We build a novel measure of exposure to computer numerical control (CNC) based on initial variation in tool types across industries and differential shifts toward CNC technology by tool type over time. Industries more exposed to CNC increased capital investment and experienced higher labor productivity. Total employment rose, with gains for college-educated workers and abstract tasks compensating for losses of less-educated workers and routine tasks. Employment gains were strongest for unionized jobs. Workers in exposed industries returned to school and relevant degree programs expanded.
    JEL: J24 N32
    Date: 2022–08
  8. By: Teodora Borota Milicevic; Fabrice Defever; Giammario Impullitti; Adam Hal Spencer
    Abstract: We build a two-region endogenous growth model to analyse the gains from innovation policy cooperation in an economic union. The model is calibrated to two blocks of the EU: the old and new members. R&D subsidy coordination is motivated by the distortion from subsidy competition, the strategic motive, and by intertemporal knowledge spillovers, which drive growth. The ideas production function features decreasing returns, making growth semi-endogenous, where policy affects growth temporarily. We compute gains from harmonised subsidies, chosen in each region to maximise EU welfare, with respect to competitive and observed subsidies. First, we find substantial gains to coordination, which derive exclusively from the strategic motive. Second, extending to include endogenous idea flows via FDI gives knowledge spillovers as the main driver of coordination gains. Third, extending to fully endogenous growth gives similar results. Fourth, conclusions based on steady state analysis have misleading optimal subsidies and overstate the estimated gains.
    Keywords: Optimal innovation policy, growth theory, international policy coordination, EU integration, FDI spillovers.
    Date: 2022

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