nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒07‒24
nine papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. New Technologies and Jobs in Europe By Stefania Albanesi; António Dias da Silva; Juan F. Jimeno; Ana Lamo; Alena Wabitsch
  2. The Illusive Slump of Disruptive Patents By Macher, Jeffrey; Rutzer, Christian; Weder, Rolf
  3. Regional diversification and labour market upgrading: Local access to skill-related high-income jobs helps workers escaping low-wage employment By Zoltán Elekes; Rikard Eriksson; Anna Baranowska-Rataj
  4. Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework By Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
  5. Skills Shortage and Innovation Openness By Paolo Carioli; Dirk Czarnitzki
  6. Technology, Skills, and Performance: The Case of Robots in Surgery By Tafti, Elena Ashtari
  7. Optimal Patent Policy and Wealth Inequality in a Schumpeterian Economy By Chu, Angus; Liao, Chih-Hsing
  8. Do regional innovation strategies meet societal challenges? A comparative analysis across regions in Belgium, Germany, Netherlands and Finland By Suarsana, Laura; Schneider, Tina; Warsewa, Günter
  9. Structural transformation and sources of growth in Turkey By Ahmet Ihsan Kaya; Cumhur Çiçekçi

  1. By: Stefania Albanesi; António Dias da Silva; Juan F. Jimeno; Ana Lamo; Alena Wabitsch
    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.
    JEL: E24 J2 J21 J31 O30 O33
    Date: 2023–06
  2. By: Macher, Jeffrey (University of Basel); Rutzer, Christian (University of Basel); Weder, Rolf (University of Basel)
    Abstract: Despite tremendous growth in the volume of new scientific and technological knowledge, the popular press has recently raised concerns that disruptive innovative activity is slowing. These dire prognoses were mainly driven by Park et al. (2023), a Nature publication that uses decades of data and millions of observations coupled with a novel quantitative metric (the CD index) that characterizes innovation in science and technology as either consolidating or disruptive. We challenge the Park et al. (2023) methodology and findings, principally around concerns of truncation bias and exclusion bias. We show that 88 percent of the decrease in disruptive patents over 1980-2010 reported by the authors can be explained by their truncation of all backward citations before 1976. We also show that this truncation bias varies by technology class. We update the analysis to 2016 and account for a change in U.S. patent law that allows for citations to patent applications in addition to patent grants, which is ignored by the authors in their analysis. We show that the number of highly disruptive patents has increased since 1980---particularly in IT technologies. Our results suggest caution in using the Park et al. (2023) methodology as a basis for research and decision making in public policy, industry restructuring or firm reorganization aimed at altering the current innovation landscape.
    Keywords: Disruptive Innovation, Truncation Bias, Exclusion Bias, U.S. Patent Law Change
    JEL: O30 O32 O33
    Date: 2023–06–19
  3. By: Zoltán Elekes (Centre for Economic and Regional Studies, Umeå University); Rikard Eriksson (Umeå University); Anna Baranowska-Rataj (Umeå University)
    Abstract: This paper investigates how the evolution of local labour market structure enables or constrains workers as regards escaping low-wage jobs. Drawing on the network-based approach of evolutionary economic geography, we employ a detailed individual-level panel dataset to construct skill-relatedness networks for 72 functional labour market regions in Sweden. Subsequent fixed-effect panel regressions indicate that increasing density of skill-related high-income jobs within a region is conducive to low-wage workers moving to better-paid jobs, hence facilitating labour market upgrading through diversification. While metropolitan regions offer a premium for this relationship, it also holds for smaller regions, and across various worker characteristics.
    Keywords: skill-relatedness network; local labour market; low-wage workers; diversification and structural change; relatedness density
    JEL: J21 J31 R11 R23
    Date: 2023–06
  4. By: Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
    Abstract: This paper adopts a relatedness-complexity framework to assess the likelihood of functional upgrading and downgrading in global value chains in EU regions in the period 2000-2010. We use relatedness and economic complexity measures based on value added content of gross exports and labour structures at the regional level. We show how economic complexity metrics can be used as an alternative for value added data, to measure both functional upgrading and downgrading in GVCs. We find that relatedness between functions (industry-occupations) is a factor impacting both functional upgrading and downgrading. Regions tend to functionally upgrade their global value chains towards more complex functions that are related to functions in which they are specialised. And regions are more likely to functionally exit and downgrade in global value chains when they are not specialised in related functions.
    Keywords: Global value chains, upgrading, downgrading, economic complexity, relatedness, EU regions
    JEL: F14 F63 O19 R11 R12
    Date: 2023–07
  5. 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
  6. By: Tafti, Elena Ashtari
    Abstract: This paper investigates the potential of new technologies to reduce disparities in the provision of healthcare services. Differences in providers’ skills may cause variation in patient outcomes. The adoption of innovations, like robots, can attenuate this problem if technological gains are decreasing in users’ skills or may exacerbate existing variation in performance otherwise. I show that, in England, the diffusion of surgical robots coincided with an improvement in average surgical performance and a convergence in outcomes between high and lower-skilled surgeons for prostate cancer patients. I study whether this pattern can be attributed to the adoption of robots using the universe of inpatient admissions to the National Health Service (NHS). To identify the effects of robotic surgery on patient outcomes, I exploit quasi-random variation in the geographic allocation of robots, allowing for selection and heterogeneity in treatment effects. I find that robots shorten patients’ length of stay in hospital and decrease the incidence of adverse events from surgery, but their effects significantly depend on surgeons’ skills. The robot has little impact on the performance of highly skilled surgeons, while lower skilled surgeons gain the most from it. I also uncover a strong pattern of negative selection on both observable and unobservable characteristics. Although the attainable gains are higher for lower-skilled surgeons, they use the robot the least. My results suggest that the potential benefit of a new technology largely depends on how it combines with the skills of the individual users.
    Keywords: Health innovation, Surgical robots, Surgical performance, Skill heterogeneity
    Date: 2023–07–11
  7. By: Chu, Angus; Liao, Chih-Hsing
    Abstract: Does wealth inequality affect optimal patent policy? This study develops a Schumpeterian growth model with heterogeneous households to explore this question. The model features a general innovation specification that captures two common specifications as special cases: (a) the knowledge-driven specification that uses R&D labor, and (b) the lab-equipment specification that uses final output for R&D. Under the knowledge-driven specification, all households prefer the same level of patent protection. However, under the lab-equipment specification, wealthier households prefer stronger patent protection, and higher wealth inequality reduces the optimal level of patent protection and economic growth. Under the general innovation specification, strengthening patent protection has an inverted-U effect on innovation, in contrast to the positive effect under the two special cases. Furthermore, wealthier households continue to prefer stronger patent protection, and wealth inequality also reduces optimal patent protection. Therefore, all households preferring the same level of patent protection under the knowledge-driven specification is due to a knife-edge parameter condition. Calibrating the model to US data, we find that eliminating wealth inequality raises the optimal level of patent protection and economic growth.
    Keywords: patent policy; innovation; wealth inequality; economic growth
    JEL: O3 O4
    Date: 2023–06
  8. By: Suarsana, Laura; Schneider, Tina; Warsewa, Günter
    Abstract: In addition to traditional, cluster-oriented approaches, both cross-sectional technologies ("key enabling technologies") and societal challenges ("grand challenges") are becoming increasingly important for regional innovation strategies. A more complex, multi-dimensional approach of regional innovation strategies requires but a number of adaptations, which need to adjust to various, different regional preconditions. The article raises the research question how societal demands are considered and implemented by regional innovation strategies in four case study regions: Pirkanmaa/Tampere region in Finland, Groningen region in the Netherlands, West Flanders in Belgium, and the Federal State of Bremen in Germany. The four regional case studies are comparable European regions in terms of their innovation capacity and their level of innovation (all are classified "highly innovative" or "strong innovator" by the European Union). In order to address global societal goals and challenges - in particular climate change and its consequences as well as demographic change - a multidimensional innovation policy spanning sectors and technologies and a close interlinking of technological and societal innovation objectives and strategies, seems inevitable. The analyses revealed that governance structures and the innovation infrastructures in the regions indeed start to adapt to societal needs and to the increasing complexity of regional innovation strategies, though the speed as well as the intensity of transition and adjustment varies greatly across the regions. Interregional learning as is intended by the European Interreg programme could offer meaningful support for the progress of regional measures towards multi-dimensional innovation policies.
    Date: 2023
  9. By: Ahmet Ihsan Kaya; Cumhur Çiçekçi
    Abstract: This paper provides a comprehensive analysis of the supply and demand side of structural transformation in Turkey. Using the GGDC/UNU-WIDER Economic Transformation Database, we find that labour productivity improvements explain more than half of economic growth in the period 1980-2021. This is mainly thanks to within-sector productivity improvements, while the contribution of structural change declines over time. Time-series regression analysis shows that structural change is driven by per capita income growth and financial openness but is halted by trade integration.
    Keywords: Labour productivity, Structural transformation, Economic growth, Input–output, Economic linkages
    Date: 2023

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