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on Technology and Industrial Dynamics |
| By: | Diego A. Comin; Danial Lashkari; Martí Mestieri |
| Abstract: | We document the structural transformation of innovation using historical patent data since the 1850s, along with R&D expenditure and TFP growth for the post-war period. Over time, innovation has shifted from agricultural sectors to manufacturing, and, more recently, to services. We develop and quantify a multi-sector semi-endogenous growth model of structural change in innovation and production, incorporating the classical demand-pull and technology-push drivers of innovation. Sectors differ in their innovation technologies, and the extent to which they benefit from knowledge spillovers (technology-push). Nonhomothetic demand shifts the market shares toward income-elastic sectors along the growth process (demand-pull). A calibrated version of our model replicates the structural transformations of innovation and production observed in the US data. Using the model, we evaluate the future impact of Baumol’s disease on aggregate productivity and find it to be minimal. Our results suggest that aggregate productivity growth may recover in the coming decades as the service sector becomes increasingly innovation-driven. |
| JEL: | E02 O1 O4 O5 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33855 |
| By: | Raphael Auer; David Kopfer; Josef Sveda |
| Abstract: | How exposed is the labour market to ever-advancing AI capabilities, to what extent does this substitute human labour, and how will it affect inequality? We address these questions in a simulation of 711 US occupations classified by the importance and level of cognitive skills. We base our simulations on the notion that AI can only perform skills that are within its capabilities and involve computer interaction. At low AI capabilities, 7% of skills are exposed to AI uniformly across the wage spectrum. At moderate and high AI capabilities, 17% and 36% of skills are exposed on average, and up to 45% in the highest wage quartile. Examining complementary versus substitution, we model the impact on side versus core occupational skills. For example, AI capable of bookkeeping helps doctors with administrative work, freeing up time for medical examinations, but risks the jobs of bookkeepers. We find that low AI capabilities complement all workers, as side skills are simpler than core skills. However, as AI capabilities advance, core skills in lower-wage jobs become exposed, threatening substitution and increased inequality. In contrast to the intuitive notion that the rise of AI may harm white-collar workers, we find that those remain safe longer as their core skills are hard to automate. |
| Keywords: | Artificial intelligence, automation, chatGPT, employment, GPT, inequality, labour market, LLM, technology, wage |
| JEL: | E24 E51 G21 G28 J23 J24 M48 O30 O33 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2025/6 |
| By: | Sergio Palomeque |
| Abstract: | This paper examines the processes of generating new technical knowledge, aim- ing to contribute to an understanding of how less developed economies can diversify their knowledge base to support economic development. We study the structure of relatedness of required knowledge between technologies at a global level, conceived as a network where technologies are connected according to the intensity with which they co-occur in the inventors’ portfolios. Based on this, topological characteristics of the network are studied using node-level metrics to propose diversification strate- gies that alleviate the lock-in effects suffered by less developed economies. The paper contributes to the literature by proposing two indicators that can be used to analyse relevant dimensions of the innovation system of cities in less developed regions. One of the indicators enables us to compare the levels of stability of the technologies that comprise the knowledge base of the cities. The second provides a measure of the level of alternatives available to the city for each diversification decision. The results, based on the analysis of Latin American cities, show that the stability of the technologies present in a city, as well as the alternatives available to choose its diversification path, are relevant to designing diversification strategies that could contribute to overcoming the constraints generated by the characteristics of the knowledge base of those cities. |
| Keywords: | relatedness; innovation systems; patents; cities; Latin America; Evolu- tionary Economic Geography |
| JEL: | B52 D85 O31 O32 O34 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2515 |
| By: | Andrea Recine; Massimiliano Tancioni |
| Abstract: | We use narrative R&D appropriation shocks to investigate the transmission mechanism of government R&D. We document that a non-defense R&D shock boosts innovation, the stock market and labor productivity while prices decrease. We show that NASA's R&D contracting during the Space Race contributes to our results, with effects concentrated in transportation, electrical and computer equipment, and even more persistent in business services. In contrast, a defense R&D shock leads to mixed effects on innovation and labor productivity and, as a military news shock, generates a hump-shaped increase in defense equipment sector production. These results are robust in the post-Korea sample. Our findings on the macroeconomic transmission mechanism of non-defense R&D are consistent with theoretical models with endogenous productivity mechanisms and learning by doing. |
| Keywords: | government R&D, non-defense R&D, NASA, Space Race, local projections, narrative identification |
| JEL: | C32 E62 H25 O30 O38 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp262 |
| By: | Laura Bisio; Valeria Cirillo; Matteo Lucchese; Andrea Mina; Stefania Scrofani |
| Abstract: | This study investigates the impact of new digital technologies on the resilience of firms to external shocks. Using rare comprehensive data on both the adoption of single and multiple new digital technologies, we employ a Difference-in-Differences methodology with propensity score matching to evaluate how digitalization influenced firms' ability to withstand the COVID-19 crisis. We isolate the effects of adopting 1) a single technology, 2) multiple technologies (the breadth of adoption), and 3) technologies that are complementary to one another. The findings provide novel insights into how firms can shape their investments in new digital technologies to increase the benefits of digitalization, and enhance their ability to navigate future crises. |
| Keywords: | digital technologies; resilience; technological complementarities |
| Date: | 2025–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/21 |
| By: | Ron Boschma |
| Abstract: | The paper reviews how the concept of institutional complementarities has been approached in the Varieties of Capitalism and Policy Mix literatures. Based on a critical review, we propose instead an evolutionary framework to analyze institutional complementarities that is inspired by the principle of relatedness. We discuss promising future applications in economic geography, such as how complementarities across institutions may promote regional diversification in regions, how this institutional complementarity framework may shed light on the question what is feasible when implementing institutional change in specific territorial contexts, and how it may contribute to understand better how regional innovation policy may become effective in particular institutional contexts. |
| Keywords: | institutions, institutional complementarities, institutional relatedness, institutional change, institutional space, varieties of capitalism, policy mix, policy space, regional diversification, Evolutionary Economic Geography |
| JEL: | B15 B52 P51 R11 R58 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2514 |
| By: | Riku Watanabe |
| Abstract: | This study introduces two heterogeneous industries into an endogenous growth model in a circular economy. In our model, there are two types of industries, brown industries using exhaustible resources for production, and green industries using recycled goods which are reproduced from the used final good by a recycling firm. Each industry switches the state as a result of R&D activities for innovation and greening. Innovation improves the level of productivity and occurs in both industries. In contrast, only firms in brown industries invest in R&D activities for greening, which transfers the brown industries toward the green industries. This paper examines the effect of recycling and the share of green industries on the growth rate. We show that an increase in the recycling rate does not have a negative effect on the economy, and improves the welfare of households. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1286 |
| By: | Karol Madoń |
| Abstract: | This study examines the impact of automation on workers' wages across 20 European countries between 2010–2018. Overall, it identifies a net positive effect of robot adoption on average wages at the sectoral level, especially pronounced among routine manual and nonroutine manual occupations. Importantly, these effects differ between countries- workers in Eastern European countries benefit twice as much from automation as their Western European counterparts. In Western European countries, higher average wages are associated with a decreasing share of routine workers. Results are robust to the exclusion of different capital measures, a battery of fixed effects, a change of instrument and an alternative measure of wages. |
| Keywords: | automation, job tasks, wages, technological change, Europe |
| JEL: | E24 J30 O33 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:wpaper:wp062024 |
| By: | Coelli, Federica (Dept. of Economics, University of Zurich); Pelzl, Paul (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Using oil and gas shocks as an exogenous source of business cycles at the U.S. commuting zone level, we provide novel evidence that local booms increase local patenting, especially in non-metropolitan areas. This reflects agglomeration economies that make incumbent inventors more productive. In contrast to total patenting, innovation in oil and gas – the sector closest to the boom – is countercyclical, consistent with higher opportunity costs of innovation in a booming industry. Our findings shed new light on the spatial dimension of innovation, inform recent debates on place-based industrial policy, and help to reconcile mixed evidence on the cyclicality of innovation. |
| Keywords: | Innovation; patents; local economic booms; agglomeration; natural resources |
| JEL: | L71 O12 O31 |
| Date: | 2025–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2025_020 |
| By: | Kuusi, Tero; Lähdemäki, Sakari |
| Abstract: | Abstract We examine value chain productivity within the EU15 from 1995 to 2017; a period marked by growth and its subsequent slowdown following the 2008 Financial Crisis. Using data on global value chains from the new OECD Inter-Country Input-Output Tables and KLEMS data, we construct a measure of total factor productivity (TFP) of value chains, indexed by their final producer industry. Our findings indicate that the post-crisis slowdown in productivity growth within the EU15 is attributable to both weakened TFP growth in final producer industries and slightly negative TFP growth in the rest of the value chain. Using dynamic panel estimation, we demonstrate that the spillover effects of business-related intangibles on VC TFP growth were a significant contributor to growth before the crisis, whereas the returns to tangible investments have been weak. In addition, we perform an event study analysis of globalization shocks by examining the impact of bilateral investment agreements with China. Following the implementation of the agreement, we observe a positive impact on TFP. This improvement is accompanied by an increase in business-related intangibles within the final industry of the value chain, along with modest growth in tangibles. These findings suggest a positive productivity impact of globalization, and underscore the significant role of business-related intangibles over tangibles. |
| Keywords: | Global value chains, Intangibles, Productivity, Globalization |
| JEL: | F60 O47 L16 O14 E22 |
| Date: | 2025–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:128 |
| By: | Hanson, Gordon H.; Moretti, Enrico |
| Abstract: | We examine changes in the spatial distribution of good jobs across U.S. commuting zones over 1980-2000 and 2000-2021. We define good jobs as those in industries in which full-time workers attain high wages, accounting for individual and regional characteristics. The share of good jobs in manufacturing has plummeted; for college graduates, good jobs have shifted to (mostly tradable) business, professional, and IT services, while for those without a BA they have shifted to (nontradable) construction. There is strong persistence in where good jobs are located. Over the last four decades, places with larger concentrations of good job industries have tended to hold onto them, consistent with a model of proportional growth. Turning to regional specialization in good job industries, we find evidence of mean reversion. Commuting zones with larger initial concentrations of good jobs have thus seen even faster growth in lower-wage (and mostly nontradable) services. Changing regional employment patterns are most pronounced among racial minorities and the foreign-born, who are relatively concentrated in fast growing cities of the South and West. Therefore, good job regions today look vastly different than in 1980: they are more centered around human-capital-intensive tradable services, are surrounded by larger concentrations of low-wage, non-tradable industries, and are more demographically diverse. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2025–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:z6qkn_v1 |
| By: | Bachmann, Federico; Kataishi, Rodrigo |
| Abstract: | This study conducts a comprehensive meta-regression analysis to examine the relationship between firm size and innovative performance, utilizing 95 empirical studies published between 1993 and 2017. By incorporating 655 econometric estimations from these studies, we aim to identify key factors contributing to the heterogeneity observed in the empirical literature. Our findings confirm a positive average effect of firm size on innovative performance, reinforcing the theoretical expectation that larger firms tend to be more innovative due to economies of scale and greater resource availability. However, this relationship is moderated by various contextual and methodological factors that affect results, such as the measures used for firm size and innovation, the type of innovation considered (product or process), and the geographic context (developed or developing countries). This study contributes to the literature by presenting one of the most comprehensive meta-analyses on this topic to date, introducing new moderator variables, and offering deeper insights into the sources of heterogeneity. The results not only reinforce the most common hypotheses on the size-innovation relationship but also provide a nuanced understanding of the variations in empirical results. By highlighting the importance of measurement choices and firm characteristics in understanding the firm size-innovation nexus, this study offers valuable guidance for future research, enabling a more refined approach to investigating this complex relationship. |
| Keywords: | Tamaño de la Empresa; Innovación; Análisis de Regresión; Investigación y Desarrollo; 1993-2017; |
| Date: | 2025–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:nmp:nuland:4327 |
| By: | Katrin Hussinger (DEM, Université du Luxembourg); Issah Wunnam (University of Leicester, UK) |
| Abstract: | We investigate whether family ownership is associated with a preference for patents or trade secrets. Using a sample of S&P 500 firms, we show that family ownership is negatively associated with patenting and positively associated with the usage of trade secrets. We further show that both relationships are moderated by firm performance below the aspiration level, i.e. the performance benchmark level that an organization sets. These results can be explained with a mixed gambles behavioral agency framework. When family firms perform below their aspiration level, prospective financial gains become relatively more important as compared to current socio emotional wealth so that patents become more and trade secrets less attractive. |
| Keywords: | Family firms, patents, trade secrets, mixed gambles, aspiration gap. |
| JEL: | O34 O32 G32 M14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:luc:wpaper:25-11 |
| By: | Meier, Andre Klaus; Kock, Alexander |
| Abstract: | Firms increasingly apply agile approaches in their development processes, and therefore researchers started investigating how agility affects innovation performance. However, previous research on agility often only considers software development or approaches the concept only from an outcome perspective (i.e. increased adaptability to changes) instead of from a capability perspective (i.e. how to organise for adaptability to be successful). Consequently, research failed to investigate how the organisation of agile research and development (R&D) units in physical new product development (NPD) affects innovation performance. We apply structural equation modelling on 162 R&D units in a large industrial firm and analyse the interplay of agile R&D units' organisation, the resulting agility, front‐end success and NPD success. Moreover, we consider contingency factors of environmental turbulence. The study extends research on agility's neglected capability perspective in innovation management, thus providing a better understanding of agility's relationship with innovation performance and showing managers how to increase their unit's NPD success. |
| Date: | 2025–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:154762 |