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on Technology and Industrial Dynamics |
| By: | Carolin Nast; Tom Broekel; Doris Entner |
| Abstract: | This study investigated two major trends shaping contemporary technological progress: the growing complexity of innovation and the increasing reliance on government support for private research and development (R&D). We analyzed United States patent data from 1981 to 2016 using structural vector autoregressions and uncovered an indirect interplay between these trends. Our findings showed that government incentives and support played a crucial role in spurring private-sector innovation. This government-fueled innovation, in turn, paved the way for advancements in more intricate and sophisticated technological areas. Our study sheds light on the dual role of the United States' innovation policy over the past four decades; the policy has not only accelerated technological advancement but also steered it toward increasingly complex domains. While this trend presents opportunities for economic growth and technological breakthroughs, it also poses challenges, including the potential for further escalating R&D costs. This research has significant implications for policymakers and industry leaders, suggesting a need for a balanced approach to fostering innovation while considering the long-term economic and technological landscape. |
| Keywords: | Innovation, patents, technological complexity, government R&D |
| JEL: | O31 O33 O38 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2407&r=tid |
| By: | Jose-Miguel Benavente; Claudio Bravo-Ortega; Pablo Egaña-delSol; Bronwyn H. Hall |
| Abstract: | We analyze how expropriation risk reduces incentives for innovation and reallocates resources from the innovative sector, building on Romer’s(1990) model. Our framework predicts the R&D expenditure, the share of human capital in R&D, the number of patents, technical progress, and economic growth are all lower due to lower expected profits and patent devaluation in the presence of expropriation risks. Empirical analyses, based on a LASSO Instrumental Variable approach and a novel comprehensive dataset spanning nearly two decades, confirm our theoretical predictions. We find robust evidence that expropriation risk, such as corruption, negatively impacts innovation by reducing R&D expenditure, human capital in R&D, number of patents, scientific publications, and the Economic Complexity Index, which is our proxy for technical progress. These findings highlight the detrimental effects of expropriation risk on innovation and economic development at the country level. |
| JEL: | O17 O30 O50 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32288&r=tid |
| By: | Panteleimon Kruglov; Charles Shaw |
| Abstract: | This study explores the relationship between R&D intensity, as a measure of innovation, and financial performance among S&P 500 companies over 100 quarters from 1998 to 2023, including multiple crisis periods. It challenges the conventional wisdom that larger companies are more prone to innovate, using a comprehensive dataset across various industries. The analysis reveals diverse associations between innovation and key financial indicators such as firm size, assets, EBITDA, and tangibility. Our findings underscore the importance of innovation in enhancing firm competitiveness and market positioning, highlighting the effectiveness of countercyclical innovation policies. This research contributes to the debate on the role of R&D investments in driving firm value, offering new insights for both academic and policy discussions. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.10982&r=tid |
| By: | Andrés Rodríguez-Pose; Zhuoying You; |
| Abstract: | Artificial intelligence (AI) and robotics are revolutionising production, yet their potential to stimulate innovation and change innovation patterns remains underexplored. This paper examines whether AI and robotics can spearhead technological innovation, with a particular focus on their capacity to deliver where other policies have mostly failed: less developed cities and regions. We resort to OLS and IV-2SLS methods to probe the direct and moderating influences of AI and robotics on technological innovation across 270 Chinese cities. We further employ quantile regression analysis to assess their impacts on innovation in more and less innovative cities. The findings reveal that AI and robotics significantly promote technological innovation, with a pronounced impact in cities at or below the technological frontier. Additionally, the use of AI and robotics improves the returns of investment in science and technology (S&T) on technological innovation. AI and robotics moderating effects are often more pronounced in less innovative cities, meaning that AI and robotics are not just powerful instruments for the promotion of innovation but also effective mechanisms to reduce the yawning gap in regional innovation between Chinese innovation hubs and the rest of the country. |
| Keywords: | AI, robotics, China, technological innovation, territorial inequality |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2406&r=tid |
| By: | Leogrande, Angelo |
| Abstract: | In this article I analyzed the propensity for patenting in Italian regions through the use of ISTAT-BES data. The static analysis shows the presence of a significant gap between the northern regions and the southern regions in the period between 2004 and 2019. The econometric analysis applied with panel models highlights the relationships that the propensity to patent has with respect to the determinants of innovation systems at regional level. The results are critically discussed with economic policy recommendations. |
| Keywords: | Innovation, Innovation and Invention, Management of Technological Innovation and R&D, Technological Change, Intellectual Property and Intellectual Capital |
| JEL: | O30 O31 O32 O33 O34 |
| Date: | 2024–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120553&r=tid |
| By: | Harrigan, James; Reshef, Ariell; Toubal, Farid |
| 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 leveraging 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. |
| Keywords: | productivity, R&D, ICT, techies, STEM skills |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2401&r=tid |
| By: | Xavier Cirera; Diego A. Comin; Marcio Cruz |
| Abstract: | We construct a grid that covers the key business functions of an establishment and the main technologies used in each of them. We populate this grid with data from over 20, 000 establishments in 15 countries. We use this dataset to document novel “facts” about how establishments use technology, the sourcing of business functions, the specialization of establishments from a task perspective, the measurement of technology, and the relationship between technology sophistication and productivity across establishments. We find that differences in technology sophistication account for 31% of cross-establishment dispersion in productivity and for more than half of the agricultural productivity gap. |
| JEL: | O33 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32281&r=tid |
| By: | Blind, Knut; Münch, Florian |
| Abstract: | To examine the different roles of regulation and standards in the age of globalisation, we hypothesize and investigate the relation of regulation and national and international standards on the one hand with innovation input (R&D expenditure) and innovation output (patents) on the other hand. The analysis is based on data of 26 high-income countries between 1998 and 2018. There are two main results. Firstly, international standards outperform both de-regulation and national standardisation as they are positively associated with R&D expenditure and patenting. On the other hand, national standards – once believed a source of competitiveness – are negatively related to patents and hence seem to localize economies and slow-down innovation. Secondly, de-regulation does not correlate positively with R&D expenditure, but with increased patenting. We argue the former suggest businesses did not – as assumed – spend freed up resources on R&D, but instead strategically used patenting to replace lost regulation-based protection with patent fences. This casts doubts on the added social value of de-regulation induced innovation. |
| Keywords: | globalization; innovation; patents; R&D; regulation; standardization |
| JEL: | R14 J01 N0 |
| Date: | 2024–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122260&r=tid |
| By: | Bastian Krieger; Malte Prüfer; Linus Strecke |
| Abstract: | Public procurement accounts for 15 to 20 percent of global GDP and is considered an effective innovation policy. However, the detrimental effects of non-innovative public procurement - public procurement tenders awarded solely based on their price - on firm innovations have been largely neglected, even though it represents the majority of all tenders. We contribute by i) developing a comprehensive theory on the effects of winning non-innovative public procurement tenders as a firm and ii) empirically testing our theory by combining representative German data with two-way fixed effect difference-in-differences estimations. In total, the estimations demonstrate winning non-innovative public procurement reduces firms’ product and process innovations on the one hand, and increases firms’ focus on their established products and services on the other hand. These results confirm our theory and empirically hold at the level of the individual firm and the German enterprise sector. |
| Keywords: | Public procurement, Firm innovation, Demand side |
| Date: | 2024–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:739379&r=tid |
| By: | Kathryn Bonney; Cory Breaux; Catherine Buffington; Emin Dinlersoz; Lucia Foster; Nathan Goldschlag; John Haltiwanger; Zachary Kroff; Keith Savage |
| Abstract: | Timely and accurate measurement of AI use by firms is both challenging and crucial for understanding the impacts of AI on the U.S. economy. We provide new, real-time estimates of current and expected future use of AI for business purposes based on the Business Trends and Outlook Survey for September 2023 to February 2024. During this period, bi-weekly estimates of AI use rate rose from 3.7% to 5.4%, with an expected rate of about 6.6% by early Fall 2024. The fraction of workers at businesses that use AI is higher, especially for large businesses and in the Information sector. AI use is higher in large firms but the relationship between AI use and firm size is non-monotonic. In contrast, AI use is higher in young firms although, on an employment-weighted basis, is U-shaped in firm age. Common uses of AI include marketing automation, virtual agents, and data/text analytics. AI users often utilize AI to substitute for worker tasks and equipment/software, but few report reductions in employment due to AI use. Many firms undergo organizational changes to accommodate AI, particularly by training staff, developing new workflows, and purchasing cloud services/storage. AI users also exhibit better overall performance and higher incidence of employment expansion compared to other businesses. The most common reason for non-adoption is the inapplicability of AI to the business. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-16&r=tid |
| By: | Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre and Kiel Centre for Globalization) |
| Abstract: | The use of digital technologies like artificial intelligence, robotics, or smart devices can be expected to go hand in hand with higher productivity and lower trade costs, and, therefore, to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union to shed further light on this issue by investigating the link between the digitalization intensity of a firm and extensive margins of exports. Applying a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), which does not impose any restrictive assumptions for the functional form of the relation between margins of exports, digitalization intensity, and any control variables, we find that firms which use more digital technologies do more often export, do more often export to various destinations all over the world, and do export to more different destinations |
| Keywords: | Digital technologies, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:428&r=tid |
| By: | Doorley, Karina; Gromadzki, Jan; Lewandowski, Piotr; Tuda, Dora; Van Kerm, Philippe |
| Abstract: | We study the effects of robot penetration on household income inequality in 14 European countries between 2006-2018, a period of rapid adoption of industrial robots. Automation reduced relative hourly wages and employment of more exposed demographic groups, similarly to the results for the US. Using robot-driven wage and employment shocks as input to the EUROMOD microsimulation model, we find that automation had minor effects on income inequality. Household labour income diversification and tax and welfare policies largely absorbed labour market shocks caused by automation. Transfers played a key role in cushioning the transmission of these shocks to household incomes. |
| Abstract: | Wir untersuchen die Auswirkungen der Roboterdurchdringung auf die Ungleichheit der Haushaltseinkommen in 14 europäischen Ländern zwischen 2006 und 2018, einer Zeit der schnellen Einführung von Industrierobotern. Ähnlich wie in den USA hat die Automatisierung die relativen Stundenlöhne und die Beschäftigung von stärker belasteten demografischen Gruppen reduziert. Unter Verwendung von roboterbedingten Lohn- und Beschäftigungsschocks als Input für das Mikrosimulationsmodell EUROMOD finden wir, dass die Automatisierung nur geringe Auswirkungen auf die Einkommensungleichheit hatte. Die Diversifizierung des Arbeitseinkommens der Haushalte und Steuer- und Sozialpolitik fingen die durch die Automatisierung verursachten Arbeitsmarktschocks weitgehend ab. Transfers spielten eine Schlüsselrolle bei der Abfederung der Übertragung dieser Schocks auf die Haushaltseinkommen. |
| Keywords: | Robots, automation, tasks, income inequality, wage inequality, microsimulation |
| JEL: | J24 O33 J23 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:287766&r=tid |
| By: | Brambilla, Irene; César, Andrés; Falcone, Guillermo; Gasparini, Leonardo |
| Abstract: | This paper studies the effects of automation of production on labor market outcomes, and whether there is an effect of automation on functional and personal inequality in Latin America. The paper combines several data sources and empirical strategies in order to approach the issues from different perspectives and to cover different dimensions of labor markets. The main issues that we focus on are: i) the hypothesis that industries with a higher share of workers performing routine tasks are more likely to be affected by automation, using indexes of task routinization by occupation; and ii) the effects of automation on industry and local labor share, employment, wages, personal inequality and poverty. We focus on seven Latin American countries: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru, during the period 1992-2015. |
| Keywords: | Automation;labor share;Labor markets;functional inequality;personal inequality;Latin America |
| JEL: | J21 J24 O33 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13120&r=tid |
| By: | Weder, Rolf; Bentele, Riccardo |
| Abstract: | Real-world data (RWD) are an increasingly important input into the pharmaceutical R&D process as shown by countries like the USA or Finland. As the availability of and access to Swiss RWD is rather limited, the question arises whether this creates a burden for pharmaceutical R&D in Switzerland. We build on the economics of data and ideas as well as the home-market effect to analyze the importance of local RWD in the three stages of pharmaceutical R&D (pre-clinical, clinical, and post-approval re-search) as well as in the field of personalized medicine. We find qualitative support for a home-market effect and conclude that there is an urgent need to improve the current RWD situation in Switzerland, from the perspective of both Swiss patients and pharmaceutical R&D in Switzerland. |
| Keywords: | Patient Data, Real-World Data, Pharmaceutical R&D, Data and Innovation, Home-Market Effects, International Trade, Location of R&D |
| JEL: | F1 O3 L65 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2024/02&r=tid |