nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒11‒21
eleven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. How do firms innovate in Latin America? By Vargas, Fernando
  2. The Ossified Economy: The Case of Germany, 1870-2020 By Naudé, Wim; Nagler, Paula
  3. The development of digital sustainability technologies by top R&D investors By JINDRA Björn; LEUSIN Matheus
  4. Endogenous Innovation Scale and Patent Policy in a Monetary Schumpeterian Growth Model By Yu, Po-yang; Lai, Ching-Chong
  5. Income per-capita across-countries By Perilla Jimenez, Juan
  6. Digging into the Technological Dimension of Environmental Productivity By Filippo Belloc; Edilio Valentini
  7. Who’s fit for the low-carbon transition? Emerging skills and wage gaps in job and data By Aurélien Saussay; Misato Sato; Francesco Vona; Layla O’Kane
  8. Labor Share Decline and Productivity Slowdown: A Micro-Macro Analysis By Francesca Crucitti; Lorenza Rossi
  9. Mission-oriented R&D and growth of Japan 1988-2016 By Ziesemer, Thomas
  10. The role of within-occupation task changes in wage development By Bachmann, Ronald; Demir, Gökay; Green, Colin; Uhlendorff, Arne
  11. Countries' research priorities in relation to the Sustainable Development Goals By Confraria, Hugo; Ciarli, Tommaso; Noyons, E.

  1. By: Vargas, Fernando
    Abstract: The study of innovation in Latin American firms has concentrated almost exclusively on the determinants and impacts of innovation investments and outputs. Less attention has been paid to how firms innovate. This study applies factor and cluster analysis to a unique dataset of harmonized innovation surveys from Argentina, Chile, Colombia, Ecuador, El Salvador, Paraguay, Peru, and Uruguay, to identify the main innovation practices and strategies performed by Latin American firms. Three of the four identified innovation strategies can be linked to results from similar studies using European firm-level data. However, none of these strategies resembles a strong science or research orientation. An approach to "open management" innovation emerges as idiosyncratic for Latin American firms. These innovation strategies are associated with differences in sales growth and labor productivity. The analysis also shows that firm resources and capabilities drive innovation strategy selection.
    JEL: L20 O12 O14 O30 O32 O33 O54
    Date: 2022–05–23
  2. By: Naudé, Wim (RWTH Aachen University); Nagler, Paula (Erasmus University Rotterdam)
    Abstract: We describe Germany's rise as an industrial power in the late 19th century through radical innovation and entrepreneurship, and contrast this with the post-World War II period. This latter period, although it contained the German economic miracle, was nevertheless a period during which innovation slowed down - a somewhat surprising conclusion, but consistent with the decline in business dynamism noted in a growing number of advanced economies. We document this decline using several innovation indicators, and offer four broad, interrelated explanations in a historical context: (i) the innovation system is locked into incremental innovation, (ii) the diffusion of technology is slowing down, (iii) the education system is subject to weaknesses, and (iv) entrepreneurship is stagnating. Implications for policy are noted. Our paper contributes to the literature on the decline in business dynamism and the "great stagnation", to the literature on the historical forces that determine innovation outcomes, and to the literature that seeks to identify what makes an entrepreneurial state.
    Keywords: innovation, Germany, entrepreneurship, technology
    JEL: N13 N14 O31 O33
    Date: 2022–09
  3. By: JINDRA Björn; LEUSIN Matheus
    Abstract: The report offers a novel approach to identify patents associated with digital sustainability technologies, which combine components of digital technologies with technologies that are relevant for climate change mitigation or adaption. We propose an identification strategy based upon six search modules, which combine specialists’ opinion, keywords and classification-based approaches. We generate two datasets. For the first, we use PATSTAT 2019a to identify 319,243 patents associated with digital sustainability technologies. We use this dataset to evaluate the accuracy of the proposed strategy in finding technologies that combine both a digital and a sustainable aspect. We find an accuracy above 95.5% for all search modules implemented in the proposed strategy. For the second dataset, we implement the proposed strategy to update the results using PATSTAT 2021b. To make the results more comparable to the EU climate neutrality report 2021 edition, we focus on the period from 2016 to 2018 and filter priority patents using the IP5 strategy. We link the retrieved patents to R&D Scoreboard companies using the JRC-OECD COR&DIP© v.3 dataset. We identify for all R&D Scoreboard companies 325,508 patents in total, from which 5,057 are digital sustainability patents.
    Keywords: sustainability, R&D
    Date: 2022–09
  4. By: Yu, Po-yang; Lai, Ching-Chong
    Abstract: This paper develops a monetary R&D-driven endogenous growth model featuring endogenous innovation scales and the price-marginal cost markup. To endogenize the step size of quality improvement, we propose a trade-off mechanism between the risk of innovation failure and the benefit of innovation success in R&D firms. Several findings emerge from the analysis. First, a rise in the nominal interest rate decreases economic growth; however, its relationship with social welfare is ambiguous. Second, either strengthening patent protection or raising the professional knowledge of R&D firms leads to an ambiguous effect on economic growth. Third, the Friedman rule of a zero nominal interest rate fails to be optimal in view of the social welfare maximum. Finally, our numerical analysis indicates that the extent of patent protection and the level of an R&D firm’s professional knowledge play a crucial role in determining the optimal interest rate.
    Keywords: Intellectual property rights; Economic growth; Endogenous innovation scales; Endogenous markups; Inflation
    JEL: E41 L11 O30 O40
    Date: 2022–10–17
  5. By: Perilla Jimenez, Juan
    Abstract: A sample of 131 countries is classified into those at the frontier (24 OECD countries), and those that over the 1950-2019 period managed to catching-up, remained stagnant, or kept lagging further behind. Time-distance to the frontier suggests that successful catching-up has been already completed by some countries. But it would take no less than 27 years and as much as 194 years in the most optimistic scenario for other countries. The comparative analysis reveals patterns of (unconditional) convergence, secular stagnation and divergence characterized by differences in the approach to local innovation and technology diffusion from abroad, jointly with the ability to take advantage of economies of scale.
    JEL: O11 O47 O57
    Date: 2022–10–10
  6. By: Filippo Belloc (Department of Economics and Statistics, University of Siena); Edilio Valentini (Department of Economic Studies, University of Chieti-Pescara)
    Abstract: We propose a mixture model approach to identify locally optimal technologies and to dissect environmental productivity (output produced per unit of emission) into a technological and a managerial component. For a large sample of plants covered by the EU ETS, we find that the share of plants adopting the frontier technology is about 21%. We also find that the average output gains that plants could reach by adopting optimal technologies and managerial practices are 75% and 80% respectively. These results remain qualitatively similar after addressing endogeneity of emissions. Finally, we match EU ETS data with balance-sheet data on parent companies and find that better environmental technologies tend to be adopted by larger, listed, multi-plant and international companies, while older firms and firms with higher intangibles assets intensity more commonly show improved environmental management. Our results suggest that existing technologies have large unexploited potentials and deliver important insights for policy.
    Keywords: Environmental productivity, Emission intensity, Environmental technology, Environmental management
    JEL: D24 L60 Q54 Q55
    Date: 2022–10
  7. By: Aurélien Saussay (Grantham Research Institute, London School of Economics and Political Science and OFCE, Sciences Po); Misato Sato (Grantham Research Institute, London School of Economics and Political Science); Francesco Vona (University of Milan, Fondazione Eni Enrico Mattei and OFCE, Sciences Po); Layla O’Kane (Lightcast)
    Abstract: As governments worldwide increase their commitments to tackling climate change, the number of low-carbon jobs are expected to grow rapidly. Here we provide evidence on the characteristics of low-carbon jobs in the US using comprehensive online job postings data between 2010-2019. By accurately identifying low-carbon jobs and comparing them to similar jobs in the same occupational group, we show that low-carbon jobs differ from high-carbon or generic jobs in a number of important ways. Low-carbon jobs have higher skill requirements across a broad range of skills, especially technical ones. However, the wage premium for low-carbon jobs has declined over time and the geographic overlap between low- and high-carbon jobs is limited. Overall, our findings suggest the low-carbon transition entails potentially high labour reallocation costs associated with re-skilling and earning losses, indicating public investments in skills is needed to deliver a smooth and rapid transition.
    Keywords: Low-carbon jobs, fossil-fuel jobs, skill gaps, job vacancy data, green wage premium, distributional effects, low-carbon transition
    JEL: J23 J24 J31 Q52 Q54
    Date: 2022–10
  8. By: Francesca Crucitti; Lorenza Rossi
    Abstract: This paper uses firm-level data to empirically investigate the relative contribution of the declining relative price of investments, the increasing automation, and the rising price markups on the labor share decline and productivity slowdown witnessed in the last 20 years in the Spain manufacturing sector. The results point to automation and markups as important drivers of both phenomena, while the relative price of investments has the opposite sign, coherent with the evidence of capital-labor complementarity. A theoretical model characterized by rm heterogeneity, endogenous markups distribution, and financial market frictions, parsimoniously accounts for the empirical findings, and it is used to draw aggregate implications. Last, the model accounts for the observed changes in the distribution of rm markup and size and for the decline in business dynamism that occurred in the last decades.
    Keywords: Labor share, TFP Losses, Firm dynamics, Capital Misallocation
    JEL: E22 E25 O16 O33 O40
    Date: 2022
  9. By: Ziesemer, Thomas (RS: GSBE MORSE, Macro, International & Labour Economics)
    Abstract: We analyze the dynamic interaction of Japan's total factor productivity (TFP), GDP, stocks of domestic and foreign private and public as well as mission-oriented R&D, called GBARD in OECD statistics, in a vector-error-correction model (VECM) for Japan with stock data for the period 1987-2016. Permanent policy changes show the following main results: (i) GBARD as well as private and public R&D each encourage growth rates of the other R&D stocks and of TFP and GDP, and all have high internal rates of return; (ii) Japan's R&D policies affect and are affected by foreign R&D; in particular, Japan's public R&D has a positive impact on European private R&D, whereas other OECD countries' R&D has a negative one; (iii) permanent foreign public R&D changes are detrimental to Japan's growth of TFP and GDP. Japan's R&D policies should be supported by education policies enhancing especially the number of PhDs and IT personnel.
    JEL: F43 O19 O47 O53
    Date: 2022–10–20
  10. By: Bachmann, Ronald; Demir, Gökay; Green, Colin; Uhlendorff, Arne
    Abstract: We examine how changes in task content over time condition occupational wage development. Using survey data from Germany, we document substantial heterogeneity in within-occupational changes in task content. Combining this evidence with administrative data on individual employment outcomes over a 25-year period, we find important heterogeneity in wage penalties amongst initially routine intensive jobs. While occupations that remain (relatively) routine intensive generate substantial wage penalties, occupations with a decreasing routine intensity experience stable or even increasing wages. These findings cannot be explained by composition or cohort effects.
    Keywords: Technological progress,polarization,tasks,routine workers,training
    JEL: J31 J24 E24
    Date: 2022
  11. By: Confraria, Hugo; Ciarli, Tommaso (RS: GSBE MGSoG, Maastricht Graduate School of Governance, RS: UNU-MERIT); Noyons, E.
    Abstract: We analyse the extent to which countries' research priorities align with their greatest SDG challenges and whether misalignments are worse in certain SDGs. We develop a new method to identify research that is related to an SDG by examining research areas in WoS with a higher share of publications that contain text that is related to SDG policy outlets. Then, we use the SDG indicators to create a new score to assess the performance of countries in SDGs in relation to the top performers. We found that most research in the world focuses on issues unrelated to the SDGs and that, within SDG-related research, more than 90% is carried out in high and upper-middle income countries, where SDG challenges tend to be smaller. At the SDG level, our findings indicate a positive relation (alignment) between countries’ research priorities and SDG challenges only for SDG1 (No poverty), SDG2 (Zero hunger), SDG6 (Clean water and sanitation) and SDG9 (Industry, innovation and infrastructure); meaning that countries with higher SDG challenges are relatively (or becoming) more involved in research related to those SDGs. For all other SDGs, we found a misalignment or inconclusive relationship between SDG challenges and research prioritisation. A particularly severe misalignment happens in SDG12 (Responsible consumption and production), where the countries that have the most unsustainable consumption/production patterns are high income countries that are not specialized in research related to SDG12.
    JEL: O10 O33
    Date: 2022–10–03

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