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on Technology and Industrial Dynamics |
| By: | Benjamin Cornejo Costas; Nicola Cortinovis; Andrea Morrison; |
| Abstract: | This paper investigates the relationship between migrant inventors, informal institutions and the development of green technologies in European regions. We argue that migrant inventors act as an unlocking mechanism that transfers external knowledge to host regions, and that informal institutions (i.e. social capital, migrant acceptance) mediate this effect. The work is based on an original dataset of migrant inventors covering 271 NUTS2 regions in the 27 EU countries, the UK, Switzerland, and Norway. The analysis shows that migrant inventors help their host regions to diversify into green technologies. The regions with the highest levels of both measures of social capital show a higher propensity of migrant inventors to act knowledge brokers. Conversely, regions with lower levels of migrant acceptance and social capital do not seem to contribute to this effect. |
| Keywords: | lock-in, international migration, green innovation, social capital, acceptance, regional diversification, EU regions |
| JEL: | F22 J61 O30 R12 Q55 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2503 |
| By: | Stefania Albanesi; António Dias da Silva; Juan F. Jimeno; Ana Lamo; Alena Wabitsch |
| Abstract: | We examine the link between the diffusion of artificial intelligence (AI) enabled technologies and changes in the female employment share in 16 European countries over the period 2011-2019. Using data for occupations at the 3-digit level, we find that on average female employment shares increased in occupations more exposed to AI. Countries with high initial female labor force participation and higher initial female relative education show a stronger positive association. While there exists heterogeneity across countries, almost all show a positive relation between changes in female employment shares within occupations and exposure to AI-enabled automation. |
| JEL: | J23 O33 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33451 |
| By: | Salomé Baslandze; Leo Liu; Elvira Sojli; Wing Wah Tham |
| Abstract: | This paper studies the interaction between process and product innovations and their distinct role in firm growth dynamics. We differentiate empirically and theoretically two types of process innovations: foundational processes that advance production technology and cost-reducing processes that enhance existing production efficiency. We develop an innovation model of product varieties with quality heterogeneity to illustrate how these innovations affect firm growth differently and highlight how process innovation induces product innovation. By analyzing millions of patent texts from 1900 to 2020, we classify innovations into product, cost-reducing process, and foundational process innovations. We find that foundational processes lead to sustained firm growth, especially through their effect on subsequent product creation. R&D-intensive firms focused on “deep-tech” innovations have an advantage in creating foundational processes, resulting in superior product quality. Using patents linked to FDA-approved drugs, we show that firms with a comparative advantage in creating foundational processes, due to greater knowledge and technological stock, tend to produce higher-value products. |
| Keywords: | foundational process innovation; process innovation; product innovation; process-driven products; firm growth; technological possibility frontier |
| JEL: | O3 O4 |
| Date: | 2025–02–19 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedawp:99586 |
| By: | Paulo Bastos; Katherine Stapleton; Daria Taglioni; Wei, Hannah Yi |
| Abstract: | This study examines the role of multinational firms and global value chain linkages in the cross-country diffusion of emerging technologies. The analysis combines detailed information on the near-universe of online job postings in 17 countries with data on multinational networks and firm-to-firm linkages from 2014 to 2022. Online job postings are utilized to investigate how jobs related to emerging technologies spread through firm networks. The findings show that emerging technology jobs are highly concentrated within multinational firms and their supply chains. Approximately one third of all emerging technology job postings during this period come from Fortune 500 firms, their affiliates, buyers, suppliers, or innovation partners. Although the locations where these technologies originate exhibit a higher prevalence of technology job openings, this advantage diminishes over time as diffusion accelerates in wealthier and geographically closer countries and regions. The study highlights the significant role of firm-to-firm linkages in technology diffusion, with some linkages proving more influential than others. Firms that were previously buyers or innovation partners of establishments in technology-originating locations experienced faster growth in jobs related to these technologies. Moreover, relationships outside corporate boundaries play a particularly critical role, and these connections are influential beyond the factor of geographical distance. |
| Date: | 2024–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10905 |
| By: | Kneller, Richard; Jonathan David Timmis; DeStefano, Timothy; Johnstone, Nick |
| Abstract: | The arrival of cloud computing provides firms a new way to access digital technologies as digital services. Yet, capital incentive policies present in every OECD country are still targeted towards investments in information technology (IT) capital. If cloud services are partial substitutes for IT investments, the presence of capital incentive policies may unintentionally discourage the adoption of cloud and technologies that rely on the cloud, such as artificial intelligence (AI) and big data analytics. This paper exploits a tax incentive in the UK for capital investment as a quasi-natural experiment to examine the impact on firm adoption of cloud computing, big data analytics and AI. The empirical results find that the policy increased investment in IT capital as would be expected; but it slowed firm adoption of cloud, big data and AI. Matched employer-employee data shows that the policy also led firms to reduce their demand for workers that perform data analytics, but not other types of workers. |
| Date: | 2024–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10911 |
| By: | Carolina Castaldi |
| Abstract: | Mapping innovation in space is part and parcel of research on the geography of innovation. The maps we produce reflect both how we conceptualize innovation and the data and indicators we choose to measure it. They can shape research directions and policy strategies. As research on the geography of innovation expands, this paper asks the question: How do innovation maps reflect these evolving perspectives? |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2505 |
| By: | Bruno Merlevede; Annelies Van Maele (-) |
| Abstract: | This paper documents how the composition of value added per worker in Europe is distributed over manufacturing, services, and other industries based on a large panel of firmlevel data. We show that a non-negligible part of value added is accounted for by services industries. We then explore how micro-data at the firm level can be used to analyse this important component of aggregate productivity growth. We further discuss and explore using our data whether semi-parametric estimators of total factor productivity that are commonly found in the literature and typically tailored towards manufacturing are fit for analysing firms services sectors. |
| Keywords: | Productivity slowdown, firm-level data, services industries |
| JEL: | E24 J24 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1109 |
| By: | Can Sever |
| Abstract: | Economic growth in the advanced economies (AEs) has been slowing down since the early 2000s, while government debt ratios have been rising. The recent surge in debt at the onset of the Covid-19 pandemic has further intensified concerns about these phenomena. This paper aims to offer insight into the high-debt low-growth environment in AEs by exploring a causal link from government debt to future growth, specifically through the impact of debt on R&D activities. Using data from manufacturing industries since the 1980s, it shows that (i) government debt leads to a decline in growth, particularly in R&D-intensive industries; (ii) the differential effect of government debt on these industries is persistent; and (iii) more developed or open financial systems tend to mitigate this negative impact. These findings contribute to our understanding of the relationship between government debt and growth in AEs, given the role of technological progress and innovation in economic growth. |
| Keywords: | Government debt; fiscal policy; economic growth; R&D; innovation; financial development |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/036 |
| By: | Daron Acemoglu |
| Abstract: | This paper reviews the main motivations and arguments of my work on comparative development, colonialism and institutional change, which was often carried out jointly with James Robinson and Simon Johnson. I then provide a simple framework to organize these ideas and connect them with my research on innovation and technology. The framework is centered around a utility-technology possibilities frontier, which delineates the possible distributions of resources in a society both for given technology and working via different technological choices. It highlights how various types of institutions, market structures, norms and ideologies influence moves along the frontier and shifts of the frontier, and it provides a simple formalization of the social forces that lead to institutional persistence and those that can trigger institutional change. The framework also enables us to conceptualize how, during periods of disruption, existing—and sometimes quite small—differences can have amplified effects on prosperity and institutional trajectories. In this way, it suggests some parallels between different disruptive periods, including the onset of European colonialism, the spread (or lack thereof) of industrial technologies in the 19th century, and decisions related to the use, adoption and development of AI today. |
| JEL: | N30 O33 P50 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33442 |
| By: | Klaus Desmet; Fernando Parro |
| Abstract: | We examine the recent literature that studies the spatial distribution of economic activity across both space and time. We discuss the methodological advances enabling the incorporation of dynamic forces of economic activity—such as endogenous innovation, forward-looking location choices, capital and asset accumulation, idea diffusion, and stochastic fundamentals—into frameworks with many heterogeneous locations and a rich economic geography. These frameworks remain tractable for quantitative evaluations. We also discuss the wide range of empirical questions explored in recent work through the lens of these frameworks, including the global and local economic impacts of climate change, the dynamic effects of trade and migration policy, labor market adjustments to import competition, the spatial consequences of structural change, the dynamic effects of place-based policies, and the long-run spatial effects of large-scale infrastructure projects. |
| JEL: | F10 F16 F22 O11 O18 O33 R11 R12 R23 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33443 |
| By: | Rajesh P. Narayanan; R. Kelley Pace |
| Abstract: | Emergent technologies such as solar power, electric vehicles, and artificial intelligence (AI) often exhibit exponential or power function price declines and various ``S-curves'' of adoption. We show that under CES and VES utility, such price and adoption curves are functionally linked. When price declines follow Moore's, Wright's and AI scaling "Laws, '' the S-curve of adoption is Logistic or Log-Logistic whose slope depends on the interaction between an experience parameter and the elasticity of substitution between the incumbent and emergent good. These functional relations can serve as a building block for more complex models and guide empirical specifications of technology adoption. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.00909 |
| By: | Daniel P. Gross; Bhaven N. Sampat |
| Abstract: | During World War II, the U.S. Committee on Medical Research (CMR) undertook an integrated, cross-sectoral effort to develop medical science and technology for war, representing the U.S. government's first substantial investment in medical research. Using data on all CMR research contracts, we show that although it had mixed results during the war, it left a large imprint on the postwar U.S. biomedical innovation system. Research areas it supported experienced rapid growth in postwar science, especially in new subjects. It also stimulated the U.S. pharmaceutical industry's adoption of modern science-based drug discovery, fueled new postwar drug development, influenced medical practice, and shaped extramural research funding at the National Institutes of Health. Contemporary accounts of individual CMR programs point to specific ways these investments enabled old and new subjects to grow. The evidence documents the long-run effects coordinated, application-oriented biomedical research can have on science and technology and challenges the influential 'linear model' paradigm in research policy. |
| JEL: | H51 H56 N42 N72 O31 O32 O33 O38 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33457 |
| By: | Fisher, Carolyn; Ranaldi, Marco |
| Abstract: | This paper explores the concept, measurement, principal stylized facts, and theoretical aspects of compositional inequality. Compositional inequality refers to how the shares of capital and labor income vary along the income distribution. This analysis is valuable for several reasons. From a macroeconomic perspective, it elucidates the link between functional and personal distributions of income, which is crucial for addressing the drivers of income inequality in a context rising capital share. From a comparative economic perspective, it locates economic systems on the continuum between two extremes: classical capitalism, where the rich earn predominantly from capital and the poor from labor, and new capitalism, where the composition of capital and labor is uniform across the distribution. We refer to the entire range of systems along this continuum as the distributional varieties of capitalism. Recent empirical studies indicate that, in most countries, we are far from classical capitalism, though with notable exceptions, such as Latin American countries. This underscores the need to evaluate the benefits of compositional equality. The paper concludes that compositional equality is desirable for at least two reasons: it promotes fairness and supports an inclusive, profit-driven regime of accumulation and growth. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2025–02–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:75ghp_v2 |
| By: | Silva, Jose I.; Okabe, Tomohito; Urzay, Sergi |
| Abstract: | This study examines the relationship between firms’ market power, captured by product markups and labor markdowns, and the labor share within European firms. Using firm-level data from the CompNet database, we develop a microeconomic framework linking the labor share to firms’ market power. Empirical results show that labor markdowns reduce the labor share, while product markups have a hump-shaped effect on it. Specifically, moderate increases in product markups initially lead to a rise in the labor share. However, as markups reach higher levels, firms with significant pricing power increasingly exercise monopsony power over their workers, amplifying markdowns and suppressing labor costs. Additionally, the analysis uncovers substantial cross-country heterogeneity in the relationship between markups, markdowns, and the labor share. |
| Keywords: | product markup, labor markdown, firms’ labor share. |
| JEL: | D21 D22 J31 L12 |
| Date: | 2025–01–24 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123442 |