nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒05‒15
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The role of localised, recombinant and exogenous technological change in European regions By Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
  2. The impact of local and foreign automation on labor market outcomes in emerging countries By Luis R. Diaz Pavez; Inmaculada Martinez-Zarzoso
  3. Unconditional Convergence in Manufacturing Productivity across U.S. States : What the Long-Run Data Show By Klein, Alexander; Crafts, Nicholas
  4. Military Spending and Innovation: Learning from 19th Century World Fair Exhibition Data By Alexander M. Danzer; Natalia Danzer; Carsten Feuerbaum
  5. Technological Change, Firm Heterogeneity and Wage Inequality By Cortes, Guido Matias; Lerche, Adrian; Schönberg, Uta; Tschopp, Jeanne
  6. Technology assessment for emerging technology: Meeting new demands for strategic intelligence By Douglas K. R. Robinson; David Winickoff; Laura Kreiling
  7. Long Tails & the Impact of GPT on Labor By Kausik, B.N.
  8. Cultural Configurations for International Innovativeness: A review and theoretical proposal By Yingying Zhang Zhang; Sylvia Rohlfer
  9. Local and national concentration trends in jobs and sales: The role of structural transformation By David Autor; Christina Patterson; John Van Reenen
  10. Modern manufacturing capital, labor demand and product market dynamics: Evidence from France By Philippe Aghion; Celine Antonin; Simon Bunel; Xavier Jaravel

  1. By: Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
    Abstract: How do regions develop and evolve along their productive and technological path is a central question. Within an evolutionary perspective, a given region is likely to develop new technologies closer to its pre-existing specialization. We adopt the approach of Hidalgo et al. (2007) to map the regional European technology/knowledge space to investigate the pattern and the evolution of regional specialisation in the most innovative EU countries. These dynamics depend on the interaction of three factors: (i) localised technological change, (ii) endogenous processes of knowledge recombination, and (iii) exogenous technological paradigm shifts while accounting for spatial and technological spillovers. Our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors at the NUTS2 level for the 11 most innovative European countries, plus Switzerland and Norway. The results show that regional technological specialization is mainly shaped by localised technological change and exogenous technological paradigm shifts, whereas recombinant innovation contributes to a lower extent and that these effects largely depends on the increasing, decreasing or stable regional dynamics.
    JEL: C23 O14 O31 O33 O52 R11 R12
    Date: 2023
  2. By: Luis R. Diaz Pavez (Unversity of Goettingen); Inmaculada Martinez-Zarzoso (Unievrsity of Goettingen and Universidad Jaume 1)
    Abstract: In the XXI century, the labor market effects of automation have gained significant attention from scholars and policymakers alike. Concerns about potential negative effects are particularly relevant in emerging countries, where a rapid acceleration of robot adoption and an increasing involvement in global value chains have been observed in recent years, with the subsequent increase in exposure to foreign competition. This paper estimates the effect of local and foreign robots on labor market outcomes and labor shares using a panel dataset composed of 16 sectors and ten emerging countries from 2008 to 2014. The endogeneity of robots’ adoption is addressed with an instrumental variables approach and using a shift-share index of exposure to foreign robots. The main results for all sectors show that only foreign robot adoption, but not local, has affected employment, whereas no effects on the labor share are found. When exploring sectoral heterogeneity, we find that the foreign robots’ negative effect on employment has occurred in many sectors, being more prominent in those with higher exposure to foreign robots. Moreover, we found small and negative spillover effects of robots in other sectors on employment and wages in the newly industrialized countries examined. Finally, the results obtained when examining the sectoral heterogeneity of the effects show that the labor share is also affected in some sectors by both the use of robots in developed and emerging countries.
    Keywords: Automation, Robots, Labor markets, Inequality, Emerging countries
    JEL: F
    Date: 2023
  3. By: Klein, Alexander (University of Kent); Crafts, Nicholas (University of Sussex)
    Abstract: This paper examines long-run unconditional convergence of labour productivity in manufacturing across 48 contiguous U.S. states. For that purpose, we construct a detailed panel data set of stateindustry pairs with over 120 industries covering the period 1880-2007. We find that unconditional convergence in manufacturing productivity was pervasive and rapid – 7.6% per year in 1880-2007 – and that manufacturing accounts for most of the unconditional convergence contribution to overall productivity growth over the long run: 61% in 1880-1940 and 91% in 1958-2007. We also examined broad U.S. regions and found that in the South the contribution of unconditional 𝛽-convergence in manufacturing to aggregate productivity growth before World War II was weak not because of a slower convergence rate but a much smaller manufacturing sector.
    Keywords: convergence ; economic growth ; U.S. economic history ; manufacturing belt JEL codes: O47 ; N11 ; N12 ; R11
    Date: 2023
  4. By: Alexander M. Danzer; Natalia Danzer; Carsten Feuerbaum
    Abstract: We provide quantitative evidence on the relationship between military spending and innovation in the 19th century. Combining innovation data from world fairs and historical military data across Europe, we show that national military spending is associated with national innovation towards war logistics such as food processing, but less towards war technology such as guns. This pattern reflects differences in the historical markets for war supplies. European patent data of 1990-2015 suggest a long-term correlation between historical and contemporaneous innovation patterns.
    Keywords: military spending, innovation, war logistics, food processing, military supply, 19th century
    JEL: H56 O31 O14 N43
    Date: 2023
  5. By: Cortes, Guido Matias (York University, Canada); Lerche, Adrian (LMU Munich); Schönberg, Uta (University College London); Tschopp, Jeanne (University of Bern)
    Abstract: We argue that skill-biased technological change not only affects wage gaps between skill groups, but also increases wage inequality within skill groups, across workers in different workplaces. Building on a heterogeneous firm framework with labor market frictions, we show that an industry-wide skill-biased technological change shock will increase between-firm wage inequality within the industry through four main channels: changes in the skill wage premium (as in traditional models of technological change); increased employment concentration in more productive firms; increased wage dispersion between firms for workers of the same skill type; and increased dispersion in the skill mix that firms employ, due to more sorting of skilled workers to more productive firms. Using rich administrative matched employer-employee data from Germany, we provide empirical evidence of establishment-level patterns that are in line with the predictions of the model. We further document that industries with more technological adoption exhibit particularly pronounced patterns along the dimensions highlighted by the model.
    Keywords: skill-biased technological change, heterogeneous firms, between-firm inequality
    JEL: J31
    Date: 2023–04
  6. By: Douglas K. R. Robinson; David Winickoff; Laura Kreiling
    Abstract: The rapid pace of technological change, coupled with a pressing need for solutions to address grand societal challenges and global crises, heightens the challenge for policy makers to develop science, technology and innovation policies at speed, in situations of high uncertainty and, in some cases, around potentially controversial technology fields. Technology assessment (TA) has a long history of providing decision-makers with timely strategic intelligence on emerging technologies. Current demands are pushing TA to evolve in order to fulfil diverse functions: to illuminate the societal, economic, environmental and other consequences of new technologies; to inform public opinion; and to guide research and development. Drawing on nine case studies, this report analyses the response of TA practices to these changing drivers and demands to support policies for new and emerging technologies. It also identifies a set of principles to guide good contemporary TA practice.
    Keywords: anticipatory governance, emerging technologies, responsive research and innovation, strategic intelligence, technology assessment, technology futures
    Date: 2023–04–26
  7. By: Kausik, B.N.
    Abstract: Recent advances in AI technologies renew urgency to the question whether automation will cause mass unemployment and reduction in standards of living. While prior work analyzes historical economic data for the impact of automation on labor, we seek a test to predict the impact of emerging automation technologies such as Generative Pre-trained Transformers (GPT). Towards that goal, we observe that human needs favor long tail distributions, i.e., a long list of niche items that are substantial in aggregate popularity. In turn, the long tails are reflected in the products and services that fulfill those needs. Technologies that address a small portion of the distribution, typically the head, free up human labor to focus on more complex tasks in the long tail, thereby improving productivity and potentially lifting wages. In contrast, technologies that cover substantial portions of the long tail can squeeze wages or displace humans entirely. With this in mind, we propose a long tail test for automation technologies to predict their impact on labor. We find that popular GPTs perform poorly on such tests in that they are erratic on straightforward long tail tasks, hence absent breakthroughs, will augment human productivity rather than cause mass displacement of human labor. Going forward, we believe that to have a broad impact on displacing or devaluing human labor, AI must at least be capable of long-tail tasks that humans perform with ease.
    Keywords: AI, labor
    JEL: J21 J30 O33
    Date: 2023–03–29
  8. By: Yingying Zhang Zhang (IUJ Research Institute, International University of Japan); Sylvia Rohlfer (CUNEF University)
    Abstract: The accelerated international business context with the multiple sourced dynamic factors such as technology, emerging market rules and COVID-19 alike crisis demands innovativeness to survive and sustain competitive advantages. Culture as a complex construct adds complications to the international business, but may also provide a response as a soft organizational element. In this paper we explore the relationship between two the culture and innovation with systematic literature review to identify cultural configurations in affecting innovation. We deployed quality social science citation indexed journal publications identified in the Web of Science (WoS) database with a set of keywords. The identified search results were reduced to 697 articles from an initial 7, 097 items with inclusion and exclusion criteria. Utilizing Python machine learning tools and PHP language scripting, we clustered 697 items into 7 topic groups with 94 keywords spotted. We further analyze the seven clusters, with a comprehensive theoretical framework to unfold the underlying influences of culture on innovation in an international business context. Research gaps are also recognized for future research directions.
    Keywords: Cultural distance, corporate culture, national culture, innovation, knowledge, R&D, globalization, creativity, new product development, multinationals
    Date: 2023–04
  9. By: David Autor; Christina Patterson; John Van Reenen
    Abstract: National industrial concentration in the U.S. has risen sharply since the early 1980s, but there remains dispute over whether local geographic concentration has followed a similar trend. Using near population data from the Economic Censuses, we confirm and extend existing evidence on national U.S. industrial concentration while providing novel evidence on local concentration. We document that the Herfindhahl index of local employment concentration, measured at the county-by-NAICS six-digit-industry cell level, fell between 1992 and 2017 even as local sales concentration rose. The divergence between national and local employment concentration trends is attributable to the structural transformation of U.S. economic activity: both sales and employment concentration rose within industry-by-county cells; but reallocation of sales and employment from relatively concentrated Manufacturing industries (e.g., steel mills) towards relatively un-concentrated Service industries (e.g. hair salons) reduced local concentration. A stronger between-sector shift in employment relative to sales drove the net fall in local employment concentration. Holding industry employment shares at their 1992 level, average local employment concentration would have risen by about 9% by 2017. Instead, it fell by 5%. Falling local employment concentration may intensify competition for recent market entrants. Simultaneously, rising within industry-by-geography concentration may weaken competition for incumbent workers who have limited sectoral mobility. To facilitate analysis, we have made data on these trends available at concentration trends.
    Keywords: national and local employment concentration, local geographic concentration, sales, U.S.
    Date: 2023–04–19
  10. By: Philippe Aghion; Celine Antonin; Simon Bunel; Xavier Jaravel
    Abstract: We use comprehensive micro data in the French manufacturing sector between 1995 and 2017 to document the effects of a fall in the cost of investments in modern manufacturing capital, including modern automation technologies, on employment, wages, sales, prices, and business stealing. Causal effects are estimated with event studies and a shift-share IV design leveraging pre-determined supply linkages and productivity shocks across foreign suppliers of manufacturing capital. At all levels of analysis - plant, firm, and industry - the estimated impact of capital investments on employment is positive, even for unskilled industrial workers. Further-more, we find that capital investments lead to higher sales and exports, higher profits, and lower consumer prices, while wages and wage inequality remain unchanged. We estimate a positive industry-level employment response to manufacturing capital investments only in industries that are exposed to import competition, due to business-stealing across countries. Thus, typical investments in modern manufacturing capital lead to an increase in domestic labor demand and promote competitiveness in international markets.
    Keywords: modern manufacturing capital, investments, productivity, France
    Date: 2023–03–29

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