nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒07‒17
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Techies and Firm Level Productivity By James Harrigan; Ariell Reshef; Farid Toubal
  2. Technological capabilities and the twin transition in Europe: Opportunities for regional collaboration and economic cohesion By Bachtrögler-Unger, Julia; Balland, Pierre-Alexandre; Boschma, Ron; Schwab, Thomas
  3. New Technologies and Jobs in Europe By Albanesi, Stefania; Dias da Silva, António; Jimeno, Juan F.; Lamo, Ana; Wabitsch, Alena
  4. Skills Shortage and Innovation Openness By Paolo Carioli; Dirk Czarnitzki
  5. Centrality in Production Networks and International Technology Diffusion By Rinki Ito
  6. Firm Investments in Artificial Intelligence Technologies and Changes in Workforce Composition By Tania Babina; Anastassia Fedyk; Alex X. He; James Hodson
  7. Who creates jobs with broad skillsets? the crucial role of firms By De Marzo, Giordano,; Mathew, Nanditha,; Sbardella, Angelica,
  8. Open Science vs. Mission-oriented Policies and the Long-run Dynamics of Integrated Economies: An Agent-based Model with a Kaldorian Flavour. By Andrea Borsato; Andre Lorentz
  9. COVID-19, Innovative Firms and Resilience By Michele Battisti; Filippo Belloc; Massimo Del Gatto
  10. Doing green things: skills, reallocation, and the green transition By Stefanos Tyros; Dan Andrews; Alain de Serres
  11. Pandemic effects: do innovation activities of German firms suffer from Long-COVID? By Markus Trunschke; Bettina Peters; Dirk Czarnitzki; Christian Rammer
  12. The role of Global Value Chains for worker tasks and wage inequality By Piotr Lewandowski; Karol Madoń; Deborah Winkler

  1. By: James Harrigan; Ariell Reshef; Farid Toubal
    Abstract: We study the impact of techies—engineers and other technically trained workers—on firm-level productivity. We first report new facts on the role of techies in the firm by using French administrative data and unique surveys. Techies are STEM-skill intensive and are associated with innovation, as well as with technology adoption, management, and diffusion within firms. Using structural econometric methods, we estimate the causal effect of techies on firm-level Hicks-neutral productivity in both manufacturing and non-manufacturing industries. We find that techies raise firm-level productivity, and this effect goes beyond the employment of R&D workers, extending to ICT and other techies. In non-manufacturing firms, the impact of techies on productivity operates mostly through ICT and other techies, not R&D workers. Engineers have a greater effect on productivity than technicians.
    JEL: D2 D24 O3 O33
    Date: 2023–06
  2. By: Bachtrögler-Unger, Julia; Balland, Pierre-Alexandre; Boschma, Ron; Schwab, Thomas
    Abstract: Technological capabilities vary substantially across European regions. Combining these diverse sets of capabilities is crucial to develop the technologies necessary to master the green and digital transition. However, collaboration between regions is sparse today. To increase inter-regional cooperation, linkages that spur the development of green and digital technologies must be identified. In this study, we provide an overview of inter-regional collaborations already in place and map new opportunities for these between regions. A special emphasis is placed on potential collaborations between economically leading and lagging regions. Our results provide new impetus for policy designs that strengthen regional innovation capabilities and cohesion across Europe’s regions.
    Keywords: Regional diversification; Relatedness; Technological capabilities; European Union; Europe; Cohesion
    JEL: B52 H54 O33 R11
    Date: 2023–04–04
  3. By: Albanesi, Stefania (University of Pittsburgh); Dias da Silva, António (European Central Bank); Jimeno, Juan F. (Bank of Spain); Lamo, Ana (European Central Bank); Wabitsch, Alena (University of Oxford)
    Abstract: We examine the link between labour market developments and new technologies such as artificial intelligence (AI) and software in 16 European countries over the period 2011- 2019. Using data for occupations at the 3-digit level in Europe, we find that on average employment shares have increased in occupations more exposed to AI. This is particularly the case for occupations with a relatively higher proportion of younger and skilled workers. This evidence is in line with the Skill Biased Technological Change theory. While there exists heterogeneity across countries, only very few countries show a decline in employment shares of occupations more exposed to AI-enabled automation. Country heterogeneity for this result seems to be linked to the pace of technology diffusion and education, but also to the level of product market regulation (competition) and employment protection laws. In contrast to the findings for employment, we find little evidence for a relationship between wages and potential exposures to new technologies.
    Keywords: artificial intelligence, employment, skills, occupations
    JEL: J23 O33
    Date: 2023–06
  4. By: Paolo Carioli; Dirk Czarnitzki
    Abstract: Skills shortage has become a key policy issue in highly developed and innovationoriented economies, with non-negligible consequences on firms’ innovation activities. We investigate the effect of skills shortage on firms’ innovation openness, which is considered to be one of the key drivers of innovation performance. We hypothesize that scarcity of personnel causes firms to cooperate more broadly with external partners. Using cross-sectional data from the German contribution to the Community Innovation Survey (CIS), and exploiting detailed information on the extent to which firms could fill their job vacancies, we find that, on average, a one standard deviation increase in skills shortage more than doubles a firm’s cooperation breadth. We contribute to the literature on human capital in relation to open innovation by characterizing the necessity of openness as a way to mitigate the scarcity of skills.
    Keywords: open innovation, R&D collaboration, skills shortage
    Date: 2023–05–29
  5. By: Rinki Ito
    Abstract: This study examines whether the structure of global value chains (GVCs) affects international spillovers of research and development (R&D). Although the presence of ``hub'' countries in GVCs has been confirmed by previous studies, the role of these hub countries in the diffusion of the technology has not been analyzed. Using a sample of 21 countries and 14 manufacturing industries during the period 1995-2007, I explore the role of hubs as the mediator of knowledge by classifying countries and industries based on a ``centrality'' measure. I find that R&D spillovers from exporters with High centrality are the largest, suggesting that hub countries play an important role in both gathering and diffusing knowledge. I also find that countries with Middle centrality are getting important in the diffusion of knowledge. Finally, positive spillover effects from own are observed only in the G5 countries.
    Date: 2023–06
  6. By: Tania Babina; Anastassia Fedyk; Alex X. He; James Hodson
    Abstract: We study the shifts in U.S. firms' workforce composition and organization associated with the use of AI technologies. To do so, we leverage a unique combination of worker resume and job postings datasets to measure firm-level AI investments and workforce composition variables, such as educational attainment, specialization, and hierarchy. We document that firms with higher initial shares of highly-educated workers and STEM workers invest more in AI. As firms invest in AI, they tend to transition to more educated workforces, with higher shares of workers with undergraduate and graduate degrees, and more specialization in STEM fields and IT skills. Furthermore, AI investments are associated with a flattening of the firms' hierarchical structure, with significant increases in the share of workers at the junior level and decreases in shares of workers in middle-management and senior roles. Overall, our results highlight that adoption of AI technologies is associated with significant reorganization of firms' workforces.
    JEL: D22 E22 J01 J23 J24
    Date: 2023–06
  7. By: De Marzo, Giordano,; Mathew, Nanditha,; Sbardella, Angelica,
    Abstract: Our study investigates the heterogeneity of skill demands within occupations, the firm activities that are associated with demand for broader skill sets, and the firm characteristics that are related to particular skills and different combinations of skills. We use a unique matched database of firm- level data and online job vacancy data for a developing economy, namely, India. Employing a multi-level machine learning technique and an innovative skill taxonomy, we identify and categorize skill requirements of firms. Our empirical analysis provides robust evidence of significant heterogeneity in skill requirements across firms within the same occupations. Additionally, we show that firms demanding diverse skills differ from their counterparts. Firms that are competitive in international markets, as well as those that are more innovative, require digital skills and specific combinations of digital and other skills. Our findings highlight the crucial role played by firms in defining the changing nature of work.
    Keywords: employment creation, skill, platform workers
    Date: 2023
  8. By: Andrea Borsato; Andre Lorentz
    Abstract: This paper offers a contribution to the literature on science policies and on the possible trade-off that might arise between broad spectrum science-technology policies and missionoriented programs. We develop a multi-country, multi-sectoral agent-based model of economic dynamics with endogenous structural change that represents a small-scale monetary union. Findings are threefold. Firstly, science policies from national governments, even when symmetric, act as a source of growth divergence across countries. Secondly, even if economic growth is largely driven by the sectors with absolute advantages, having at least a little flow of open science investments is sufficient for the other industries to survive and innovate, hence preserving the bio-diversity of the economic structure. Thirdly, science policy alone is a sufficient means to break monopolistic tendencies, trigger competition and reduce income inequality. Still, such results are conditioned to the flow of open science. Yet, the working of the model suggests that supply-side science policies should be paired with demand-side policies for the wide re-organisation of consumption habits, if grand societal challenges are to be met.
    Keywords: Science policies, Structural and technical change, Economic growth.
    JEL: E11 E32 O33 O41
    Date: 2023
  9. By: Michele Battisti; Filippo Belloc; Massimo Del Gatto
    Abstract: This paper explores the empirical association between patents and various indicators of firm resilience during the COVID-19 pandemic with worldwide firm-level data from manufacturing industries. The study shows that patent-intensive firms have a reduced probability of exit, in particular if they are larger and if engaging with complementary investments in R&D and other intangibles. Additional estimates show that firm productivity has been an important transmission channel. Taken together, the results presented in the paper offer evidence-based findings pointing to patents as an important potential factor contributing to firm resilience during the COVID-19 pandemic. Policy insights are discussed.
    Keywords: Firm resilience, patents, productivity, COVID-19
    JEL: D20 L60 O30
    Date: 2023–02
  10. By: Stefanos Tyros; Dan Andrews; Alain de Serres
    Abstract: The need to rapidly decarbonise economies raises questions about whether countries’ workforces possess the requisite skills to achieve the net zero transition as well as the capacity to redeploy workers from “brown” to “green” jobs. This paper applies a task-based framework to granular data from the Occupational Information Network (O*NET) and country-specific employment sources to generate new indicators of the green skills structure of labour markets for a large number of OECD countries and non-OECD EU countries. Significant cross-country differences emerge in the underlying supply of green skill and the potential of economies to reallocate brown job workers to green jobs within their broad occupation categories. In a majority of detailed brown occupations, workers have in principle the necessary skills to transition to green jobs, with the exception of those in production occupations, who may require more extensive re-skilling. In contrast, workers from most highly automatable occupations are generally not found to have the sufficient skills to transition to green jobs, suggesting more limited scope for the net-zero transition to reinstate labour displaced by automation.
    Keywords: green skills, green transition, reallocation
    JEL: J24 J62 J68 J82
    Date: 2023–07–04
  11. By: Markus Trunschke; Bettina Peters; Dirk Czarnitzki; Christian Rammer
    Abstract: The COVID-19 pandemic has affected firms in many economies. Exploiting treatment heterogeneity, we use a difference-in-differences design to causally identify the shortrun impact of COVID-19 on innovation spending in 2020 and expected innovation spending in subsequent years. Based on a representative sample of German firms, we find that negatively affected firms substantially reduced innovation expenditure not only in the first year of the pandemic (2020) but also in the two subsequent years, indicating ’Long–Covid’ effects on innovation. In 2020, innovation expenditure fell by 4.7% due to the pandemic. In 2022, innovation spending was even 5.4% lower compared to the counterfactual scenario without the pandemic. Firms with higher pre-treatment digital capabilities show higher innovation resilience during the pandemic. Moreover, COVID-19 leads to a decrease in innovation spending not only in firms that were strongly negatively affected by the pandemic, but also in those firms that experienced a positive demand shock from the pandemic, presumably to increase production capacity.
    Keywords: COVID-19, innovation, difference-in-differences, economic crisis, resilience
    Date: 2023–05–29
  12. By: Piotr Lewandowski; Karol Madoń; Deborah Winkler
    Abstract: This paper studies the relationship between global value chain (GVC) participation, worker-level routine task intensity, and wage inequality within countries. Using unique survey data from 38 countries, we find that higher GVC participation is associated with more routine-intensive work, especially among workers in offshorable occupations. This effect is particularly strong in industry and in countries at lower development levels. As higher routine task intensity links with to wages, this indirectly widens within-country wage inequality. However, GVC participation directly contributes to reduced wage inequality, except in the richest countries. Overall, GVC participation is negatively associated with wage inequality in most low- and middle-income countries that receive offshored jobs, and positively in high-income countries that offshore jobs.
    Keywords: routine task intensity, global value chains, globalisation, cross-country division of work, wage inequality
    JEL: J21 J24 J31 F66
    Date: 2023–06

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