nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒04‒17
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Relatedness, Cross-relatedness and Regional Innovation Specializations: An Analysis of Technology, Design and Market Activities in Europe and the US By Carolina Castaldi; Kyriakos Drivas;
  2. Productive robots and industrial employment: The role of national innovation systems By Chrystalla Kapetaniou; Christopher A. Pissarides
  3. Technology gaps, trade and income By Sampson, Thomas
  4. Boosting, Sorting, and Complexity – Urban Scaling of Innovation Around the World By Tom Broekel; Louis Knupling; Lars Mewes
  5. The Characteristics and Geographic Distribution of Robot Hubs in U.S. Manufacturing Establishments By Erik Brynjolfsson; Cathy Buffington; Nathan Goldschlag; J. Frank Li; Javier Miranda; Robert Seamans
  6. The impact of Robots in Latin America: Evidence from Local Labor Markets By Irene Brambilla; Andrés César; Guillermo Falcone; Leonardo Gasparini
  7. Information Technology, Firm Size, and Industrial Concentration By Erik Brynjolfsson; Wang Jin; Xiupeng Wang
  8. The Impact of AI on the Workplace: Evidence from OECD Case Studies of AI Implementation By Anna Milanez
  9. Bridging the short-term and long-term dynamics of economic structural change By James McNerney; Yang Li; Andres Gomez-Lievano; Frank Neffke
  10. Technological Capability Strength/Asymmetry and Supply Chain Process Innovation: The Contingent Roles of Institutional Environments in China By Liwen Wang; Jin Jason Lu; Kevin Zhou

  1. By: Carolina Castaldi; Kyriakos Drivas;
    Abstract: This paper examines how regions develop new innovation specializations, covering different activities in the whole process from technological invention to commercialization. We develop a conceptual framework anchored in two building blocks: first, the conceptualization of innovation as a process spanning technology, design and market activities; second, the application and extension of the principle of relatedness to understand developments within and between the different innovation activities. We offer an empirical investigation where we operationalize the different innovation activities using three intellectual property rights (IPRs): patents, industrial designs and trademarks. We provide two separate analyses of how relatedness and cross-relatedness matter for the emergence of new specializations: for 259 NUTS-2 European regions and for 363 MSAs of the US. While relatedness is significantly associated with new regional specializations for all three innovation activities, cross-relatedness between activities also plays a significant role. Our study has important policy implications for developing and monitoring Smart Specialization regional strategies.
    Keywords: innovation, relatedness, regional specialization, patents, trademarks, designs, NUTS-2 regions, Metropolitan Statistical Areas.
    JEL: O34 O38 R11
    Date: 2023–03
  2. By: Chrystalla Kapetaniou; Christopher A. Pissarides
    Abstract: In a model with robots, and automatable and non-automatable human tasks, we examine robot-labour substitutions and show how they are influenced by a country's 'innovation system'. Substitution depends on demand and production elasticities, and other factors influenced by the innovation system. Making use of World Economic Forum data we estimate the relationship for thirteen countries and find that countries with poor innovation capabilities substitute robots for workers much more than countries with richer innovation capabilities, which generally complement them. In transport equipment and non-manufacturing robots and workers are stronger substitutes than in other manufacturing.
    Keywords: robots-employment substitution, automatable tasks, complementary task creation, innovation environment, industrial allocations
    Date: 2023–03–15
  3. By: Sampson, Thomas
    Abstract: This paper quantifies the contribution of technology gaps to international income inequality. I develop an endogenous growth model where cross-country differences in R&D efficiency and cross-industry differences in innovation and adoption opportunities together determine equilibrium technology gaps, trade patterns and income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries. I calibrate R&D efficiency by country and innovation-dependence by industry using R&D, patent and bilateral trade data. Counterfactual analysis implies technology gaps account for one-quarter to one-third of nominal wage variation within the OECD.
    Keywords: technology gaps; development accounting; comparative advantage; innovation; technology diffusion; endogenous growth
    JEL: D21 D24 D31 F14 O31 O33 O47
    Date: 2023–02–01
  4. By: Tom Broekel; Louis Knupling; Lars Mewes
    Abstract: It is widely understood that innovations tend to be concentrated in cities, which is evidenced by innovative output increasing disproportionately with city size. Yet, given the heterogeneity of countries and technologies, few studies explore the relationship between population and innovation numbers. For instance, in the USA, innovative output scaling is substantial and is particularly pronounced for complex technologies. Whether this is a universal pattern of complex technologies and a potential facilitator of scaling, is unknown. Our analysis compared urban scaling in urban areas across 33 countries and 569 technologies. Considerable variation was identified between countries, which is rooted in two fundamental mechanisms (sorting and boosting). The sorting of innovation-intensive technologies is found to drive larger innovation counts among cities. Among most countries, this mechanism contributes to scaling more than city size boosting innovation within specific technologies. While complex technologies are concentrated in large cities and benefit from the advantages of urbanization, their contribution to the urban scaling of innovations is limited.
    Keywords: innovation, urban scaling, complexity, patents, sorting, geography of innovation
    JEL: R12 O33 O18 O57
    Date: 2023–03
  5. By: Erik Brynjolfsson; Cathy Buffington; Nathan Goldschlag; J. Frank Li; Javier Miranda; Robert Seamans
    Abstract: We use data from the Annual Survey of Manufactures to study the characteristics and geography of investments in robots across U.S. manufacturing establishments. We find that robotics adoption and robot intensity (the number of robots per employee) is much more strongly related to establishment size than age. We find that establishments that report having robotics have higher capital expenditures, including higher information technology (IT) capital expenditures. Also, establishments are more likely to have robotics if other establishments in the same Core-Based Statistical Area (CBSA) and industry also report having robotics. The distribution of robots is highly skewed across establishments’ locations. Some locations, which we call Robot Hubs, have far more robots than one would expect even after accounting for industry and manufacturing employment. We characterize these Robot Hubs along several industry, demographic, and institutional dimensions. The presence of robot integrators and higher levels of union membership are positively correlated with being a Robot Hub.
    JEL: L64 O34 O36 O4
    Date: 2023–03
  6. By: Irene Brambilla (CEDLAS-IIE-FCE-UNLP); Andrés César (CEDLAS-IIE-FCE-UNLP); Guillermo Falcone (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET)
    Abstract: We study the effect of robots on labor markets in Argentina, Brazil, and Mexico, the major robot users in Latin America, during the period 2004{2016. We exploit spatial and time variations in exposure to robots arising from initial differences in industry specialization across geographic locations and the evolution of robot adoption across industries, to estimate a causal effect of robots on local labor market outcomes. We find that district's exposure to robots causes a relative deterioration in labor market indicators such us unemployment and labor informality. We document that robots mainly replace formal salaried jobs, affecting young and semi-skilled workers to a greater extent, and that informal employment acts as a buffer that prevents a larger increase in unemployment.
    JEL: J23 J24 J31 J46 O14 O17 R10
    Date: 2023–04
  7. By: Erik Brynjolfsson; Wang Jin; Xiupeng Wang
    Abstract: Information flows, and thus information technology (IT) are central to the structure of firms and markets. Using data from the U.S. Census Bureau, we provide firm-level evidence that increases in IT intensity are associated with increases in firm size and concentration in both employment and sales. Results from instrumental variables and long-difference models suggest that the effect is likely causal. The effect of IT on size is more pronounced for sales than employment, which leads to a decline in the labor share, consistent with the “scale without mass” theory of digitization. Furthermore, we find that IT provides greater benefits to larger firms by increasing their capability to replicate their operations across establishments, markets, and industries. Our findings provide empirical evidence suggesting that the substantial rise in IT investment is one of the main driving forces for the increase in firm size, decline of labor share, the growth of superstar firms, and increased market concentration in recent years.
    JEL: L10 O3 O30
    Date: 2023–03
  8. By: Anna Milanez
    Abstract: How artificial intelligence (AI) will impact workplaces is a central question for the future of work, with potentially significant implications for jobs, productivity, and worker well-being. Yet, knowledge gaps remain in terms of how firms, workers, and worker representatives are adapting. This study addresses these gaps through a qualitative approach. It is based on nearly 100 case studies of the impacts of AI technologies on workplaces in the manufacturing and finance sectors of eight OECD countries. The study shows that, to date, job reorganisation appears more prevalent than job displacement, with automation prompting the reorientation of jobs towards tasks in which humans have a comparative advantage. Job quality improvements associated with AI – reductions in tedium, greater worker engagement, and improved physical safety – may be its strongest endorsement from a worker perspective. The study also highlights challenges – skill requirements and reports of increased work intensity – underscoring the need for policies to ensure that AI technologies benefit everyone.
    JEL: J2 J3 J5 J6
    Date: 2023–03–27
  9. By: James McNerney; Yang Li; Andres Gomez-Lievano; Frank Neffke
    Abstract: Economic transformation – change in what an economy produces – is foundational to development and rising standards of living. Our understanding of this process has been propelled recently by two branches of work in the field of economic complexity, one studying how economies diversify, the other how the complexity of an economy is expressed in the makeup of its output. However, the connection between these branches is not well understood, nor how they relate to a classic understanding of structural transformation. Here, we present a simple dynamical modeling framework that unifies these areas of work, based on the widespread observation that economies diversify preferentially into activities that are related to ones they do already. We show how stylized facts of long-run structural change, as well as complexity metrics, can both emerge naturally from this one observation. However, complexity metrics take on new meanings, as descriptions of the long-term changes an economy experiences rather than measures of complexity per se. This suggests relatedness and complexity metrics are connected, in a hitherto overlooked way: Both describe structural change, on different time scales. Whereas relatedness probes transformation on short time scales, complexity metrics capture long-term change.
    Date: 2023–03
  10. By: Liwen Wang (SAFTI - Shenzhen Audencia Financial Technology Institute); Jin Jason Lu; Kevin Zhou
    Abstract: Despite the importance of process innovation in fostering supply chain competitiveness, existing studies primarily emphasize product innovation and overlook institutional environments. This study builds on the dyadic capability-based view and institutional theory to investigate how buyer's and supplier's technological capabilities jointly affect supply chain process innovation in China. We differentiate between two distinct dimensions, technological capability strength and technological capability asymmetry, and propose that technological capability strength negatively influences supply chain process innovation whereas technological capability asymmetry promotes such innovation. We also examine how formal (i.e., government intervention) and informal (i.e., guanxi importance) institutional factors moderate the effects of technological capability strength and asymmetry on supply chain process innovation. Empirical analyses based on 157 buyer-supplier dyads in China offer strong support for our hypotheses, which provide important implications for the supply chain innovation collaboration literature and managerial practice.
    Keywords: Supply chain process innovation, technological capability strength, technological capability asymmetry, government intervention, guanxi importance, buyer-supplier exchanges
    Date: 2023–01–05

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