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on Technology and Industrial Dynamics |
| By: | Vivarelli, Marco (Università Cattolica del Sacro Cuore); Arenas Díaz, Guillermo (Catholic University Milan) |
| Abstract: | The relationship between technology and employment has long been a topic of debate. This issue is even more pertinent today as the global economy undergoes a technological revolution driven by automation and the widespread adoption of Artificial Intelligence. The primary objective of this paper is to provide insights into the relationship between innovation and employment by proposing a conceptual framework and by discussing the state of the art of the debates and analyses surrounding this topic. |
| Keywords: | technology, employment, compensation theory, AI, robot |
| JEL: | O33 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17686 |
| By: | Malah-Kuete, Flora Yselle; Avom, Desire |
| Abstract: | This study aims to contribute to the empirical literature on the drivers of Cameroonian firms participation in Global Value Chains (GVCs) by examining the role of innovation. We use logistic regressions and matching techniques to analyse pooled cross-sectional data from the 2008 and 2016 Cameroonian Enterprise Censuses. Our findings indicate that investments in innovation, particularly in machinery and equipment, as well as software and technology, significantly enhance the probability of Cameroonian firms participating in GVCs through subsidiary ties with foreign firms. Building upon these results, we discuss the implications of promoting innovation and making strategic investments in critical sectors of the economy to facilitate greater engagement of local firms in GVCs. |
| Date: | 2024–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:8a4f6e2e-f44f-4393-bace-150d332276cb |
| By: | Kweka, Josaphat; Sooi, Fadhili |
| Abstract: | Using firm-level data from the recently available Tanzania Enterprise Survey (TES) 2022, this paper provides empirical analysis of drivers of firm participation in global value chains (GVCs), and implication of such participation on firm performance in Tanzania. The findings show that, firm size, awareness of external markets, investment in Research and Development (RandD), and engagement in innovation and technology upgrading are significant drivers of firm participation in GVCs for Tanzania. The paper confirms the widely acclaimed conclusions in the literature that firm participation in GVCs is positively and significantly associated with higher firm performance. However, despite the positive role of GVC, the extent of firm participation appears low for Tanzania, mainly on account of low level of capacity of often small and informal firms. The findings underscore the need to increase government's efforts to improve environment and incentive for small firms to formalize and grow. The results are also supportive of the need for policy to promote regional integration, investment in RandD, innovation, and technology upgrading. |
| Date: | 2024–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:014dd339-fb25-4c3f-a81b-d4c2e1f7edb2 |
| By: | Osabuohien, Evans S.; Karakara, Alhassan Abdul-Wakeel; Edafe, Oluwatosin D. |
| Abstract: | Global value chains (GVC) have become an important developmental issue. However, empirical studies on the peculiar nature of the GVC participation of firms are sparse, especially in West Africa. Thus, this study empirically examines the factors that constitute the major drivers of firm GVC participation and the institutional obstacles to firm GVC participation. The study discusses how such factors could be surmounted. We use the logit model as the empirical strategy and the World Bank's Enterprise Survey (ES) database for two biggest West African countries: Ghana and Nigeria. The findings show that firms in West Africa face constraints that militate against their participation in GVC. Also, we find crucial factors that can influence firms participation in GVC, which differ relatively between Ghana and Nigeria. In essence, medium and large-scale firms have higher likelihood to participate in GVC than small-scale firms. Similarly, the legal status of the firm helps in enhancing the firms participation in GVC, as firms that are shareholding or partnership firms are more likely to participate in GVC than sole proprietorship firms. Also, firm location serves as an advantage to the firm GVC participation, as firms in cities with a human population of over one million are more likely to be engaged in GVC. The finding of the study is relevant to industry players and firms, particularly on the mode of participation in GVC and in helping policy makers in creating a favourable policy ambience for GVC participation of firms, which could enhance corporate relations among domestic firms and international players to spur firms productivity and participation in GVC. |
| Date: | 2024–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:f3859c4f-97c5-4116-b6c8-12fcdac38779 |
| By: | Saint-Paul, Gilles (Paris School of Economics) |
| Abstract: | This paper examines the potential for automation and artificial intelligence (AI) to induce a broader economic decline, impacting not only labor but also the owners of capital and advanced technology. While automation has traditionally favored skilled over unskilled workers, recent advancements in AI suggest that it could replace skilled labor as well, raising concerns over a diminishing middle class and the viability of mass consumption society. This study proposes a model with non-homothetic preferences and increasing returns technology, positing that in a world where AI eliminates skilled labor, demand for mass-produced goods may fall, destabilizing the very capitalist class reliant on consumer society. Within this framework, political power lies with the "oligarchs, " or owners of proprietary technology, who may adopt policies such as Universal Basic Income (UBI) or Post-Fordism to sustain consumer demand and profitability. The analysis explores how oligarchs might use different policy mechanisms, including decisive control or lobbying-based menu auctions, to influence economic outcomes. Findings suggest that policy preferences vary among oligarchs based on their market focus, with luxury producers favoring policies that sustain a middle class and necessity producers inclined to support AI-driven automation under minimal redistribution. The paper provides insights into the complex interactions between technology, income distribution, and political economy under advanced automation. |
| Keywords: | automation, Artificial Intelligence, income inequality, capitalism, middle class, Universal Basic Income (UBI), Post-Fordism, political economy, consumer society, oligarchs |
| JEL: | O33 D63 J24 E25 D72 L16 P16 H23 D31 D42 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17682 |
| By: | Bertheau, Antoine (Norwegian School of Economics); Kudlyak, Marianna (Federal Reserve Bank of San Francisco); Larsen, Birthe (Copenhagen Business School); Bennedsen, Morten (University of Copenhagen) |
| Abstract: | We use a novel large-scale survey of firms, implemented in Denmark in 2021 and linked to administrative data, to study why firms lay off workers instead of cutting wages. Our questions on layoffs, wage cuts, and the link between them provide new insights into firms' strategies for adjusting labor in response to adverse shocks. We find that layoffs are more prevalent than wage cuts, but wage cuts are not rare in firms experiencing revenue reduction and were used by 15% of such firms. Employers are hesitant to cut wages in many instances because they see wage cuts as a poor substitute for layoffs. First, firms report that lowering wages triggers costs through the impact on morale and quits. Comparing these costs with potential savings from wage cuts, most employers in the survey agree that a wage reduction would not have saved jobs. Second, firms report that a crisis is an opportune time for layoffs because of lower opportunity costs of restructuring and because layoffs during a crisis are perceived by workers as more fair. We find that firms that report such opportunistic layoffs are less likely to implement wage cuts. |
| Keywords: | wage rigidity, layoffs |
| JEL: | D22 J30 J63 J23 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17704 |
| By: | Carleton, Tamara; Cockayne, William |
| Abstract: | A rise of government funding agencies dedicated to radical innovation has occurred in recent years. When launching bold and ambitious programs marked by radical uncertainty and unknowable outcomes, how do innovation-funding organizations deliberately provoke risk-taking behavior in potential applicants? This study focuses on the interplay between risk perception and decision making for deliberate high-risk decisions. We compare the language used in 81 public funding calls and new program solicitations from four US government funding entities, which comprise DARPA (Defense Advanced Research Projects Agency), the Defense Innovation Unit, the NASA Innovative Advanced Concepts program, and ARPA-H. A list of potential signal phrases was derived, indicating a spectrum of corresponding risk levels for an innovation opportunity. A survey with 92 evaluators validated that certain keywords served as provocations to trigger risk taking in the pursuit of transformative breakthroughs and frontier science. Our work contributes to a lexicon of signal phrases for provoking and communicating innovation, especially for far-reaching programs. More broadly, understanding the impact of language on decision making under high-risk conditions can inform national innovation policy and strategy for other funding organizations seeking to induce scientific and technological advancement in the United States and globally. |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:aqgf8_v1 |