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on Technology and Industrial Dynamics |
| By: | Tommaso Ciarli (SPRU, University of Sussex, UK); Maria Savona (SPRU, University of Sussex, UK); Jodie Thorpe (Institute of Development Studies, UK); Seife Ayele (Institute of Development Studies, UK) |
| Abstract: | The paper proposes the foundations of an analytical framework to map different innovation pathways and explain how innovation leads to inclusive structural change in low-income countries. Innovation pathways depend on how actors, interactions, and variables affect the origin of innovation; the uptake of the innovations (adoption and diffusion); the impact of this diffusion on upgrading, structural change and inclusion; the complementarity between these processes; the potential trade-offs between structural change and inclusion. The paper offers a set of novel applications to test the proposed framework, through different examples of innovation pathways: (a) international technology transfer, based on an extensive systematic literature review; (b) product and process innovation in the dairy sector in Kenya, based on a secondary case study; (c) an organisational innovation in the provision of antiretroviral treatment in Mozambique, also a case study; (d) a systematisation of metrics and indicators of innovation, structural change and inclusion and an empirical exploration of their relationship. The learning generated will support a multidisciplinary, multi-methods research agenda to map the dynamics around innovation, structural change, and inequality and generate an integrated platform of evidence on these processes. In doing so, we respond to the recently increasing demand coming from international institutions, inter-departmental research funds, NGOs and national ministries, for better knowledge to shape a more effective innovation policy for sustainable and inclusive development in low income countries. |
| Keywords: | Innovation; Technological Upgrading; Structural Change, Inclusion, Low Income Countries (LICs) |
| JEL: | O1 O13 O14 O33 Q13 I15 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2018-04&r=tid |
| By: | Giovanni Dosi (Scuola Superiore Sant'Anna Pisa Italy); Andrea Roventini (Scuola Superiore Sant'Anna Pisa Italy also OFCE Sciences Po Paris); Emanuele Russo (Superiore Sant'Anna,Pisa Italy & OFCE Sciences Po Paris France) |
| Abstract: | In this paper we present a multi-country, multi-industry agent-based model investigating the different growth patterns of interdependent economies. Each country features a Schumpeterian engine of endogenous technical change which interacts with Keyneasian/Kaldorian demand generation mechanisms. National growth trajectories are driven by firms’ accumulation of technological knowledge, which in turn also leads to emergent specialization patterns in different industries. Interactions among economies occur via trade flows, stemming from the competition of firms in international markets. Simulation results show the emergence of persistent income divergence among countries leading to polarization and club formation. Moreover, each country experiences a structural transformation of its productive structure during the development process. Such dynamics results from firm-level virtuous (or vicious) cycles between knowledge accumulation, trade performances, and growth dynamics. The model accounts for a rich ensemble of empirical regularities at macro, meso and micro levels of aggregation. |
| Keywords: | Endogenous growth, structural change, technology-gaps, global divergence, absolute advantages, agent based models |
| JEL: | F41 F43 O4 O3 |
| Date: | 2018–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1802&r=tid |
| By: | Trushin, Eshref; Ugur, Mehmet |
| Abstract: | Firm age or size diversity in an industry is taken for granted but its implications for industry evolution and firm survival have remained below the radars of empirical research. We address this knowledge gap by drawing on an interdisciplinary theoretical framework informed by theoretical biology, organizational ecology and industrial organisation. We hypothesize that firms in more diverse industries are more likely to exit as a result of rugged fitness distributions where a global fitness optimum is less likely to emerge. We also hypothesize that investment in research and development (R&D) may counterbalance the adverse effect of diversity on survival by enabling the firm to engage in active learning about its market and technology niches. Evidence from discrete-time hazard estimators and an unbalanced panel dataset of 35,136 R&D-active UK firms lend support to these hypotheses. The findings remain robust to: (i) a battery of sensitivity checks, including step-wise estimations, different diversity measures and various firm cohorts; (ii) control for frailty and for a wide range of firm, industry, and macroeconomic factors considered in the survival literature; and (iii) taking account of direct effects of age, size and R&D intensity. |
| Keywords: | Diversity; complexity; firm survival; R&D; ecosystem |
| JEL: | C4 L2 O32 O33 |
| Date: | 2018–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:19095&r=tid |
| By: | Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Thuc Uyen Nguyen-Thi (CEPS/INSTEAD - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development) |
| Abstract: | The antecedents of environmental innovation and the impact of openness on technological innovation have been well studied, yet the role of external knowledge search remains largely unknown. This study explores whether six dimensions of open search (external R&D, acquisition, R&D cooperation, and three types of external information sourcing) enhance firms' radical and incremental innovation with environmental effects (EI) when used either sporadically or persistently. It shows that the temporal dimension of openness matters. Persistent open knowledge search efforts are associated with a firm's propensity to introduce EI, more so than sporadic search. Furthermore, the different types of knowledge search have heterogeneous effects on different types of EI. It also shows that persistent innovation is more relevant in the case of radical EI. |
| Keywords: | Search,Environmental innovation, Incremental/radical, Openness,Persistence |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01609129&r=tid |
| By: | Ugur, Mehmet |
| Abstract: | Direct and indirect public support (subsidies and tax relief) for business R&D in the UK is higher than most other OECD countries. Nevertheless, total business R&D expenditure as percentage of GDP in the UK (1.7%) is relatively low compared to OECD countries (2.43%). This policy brief summarizes the findings from an ESRC-funded research project on productivity and employment effects of R&D investment; and on whether direct public support has had additionality effects in terms of increasing the funded firms’ R&D investment. The findings suggest that the bot the effects of R&D on productivity and employment and the effect of subsidies on private R&D effort are heterogeneous and non-linear. Therefore, we call for well-targeted R&D subsidies, new conditionality clauses taking account of past performance, and industry-specific targets for R&D investment. |
| Keywords: | Innovation; R&D; Employment; Productivity; Public Policy |
| JEL: | D24 J23 O30 O32 O38 |
| Date: | 2018–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:19096&r=tid |
| By: | Nicholas Oulton |
| Abstract: | I analyse TFP growth at the sectoral and aggregate level, using data for 10 industry groups covering the market sector for 18 countries over the period 1970-2007 drawn from the EU KLEMS dataset. TFP growth displays persistence at the aggregate level but not at the industry level, suggesting industry outputs are measured with error. In all countries resources have been shifting away from industries with high TFP growth towards industries with low TFP growth. Nevertheless I find that structural change (as measured by changes in value added shares) has favoured growth in most countries. Errors in measuring capital or in measuring the elasticity of output with respect to capital are unlikely to substantially reduce the role of TFP in explaining growth. The pattern of growth in these 18 countries is more consistent with an underlying two-sector model than with the one-sector (Solow) model. Standard theory suggests that TFP growth induces capital accumulation, at least in the long run. This is not the case with the raw EU KLEMS data used here. But standard theory finds some support when the data are smoothed to remove cyclical effects. |
| Keywords: | Total factor productivity, TFP, structural change, measurement error |
| JEL: | E01 O47 O11 E24 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2017-02&r=tid |
| By: | Antr�s, Pol; Chor, Davin |
| Abstract: | This paper offers four contributions to the empirical literature on global value chains (GVCs). First, we provide a succinct overview of several measures developed to capture the upstreamness or downstreamness of industries and countries in GVCs. Second, we employ data from the World Input-Output Database (WIOD) to document the empirical evolution of these measures over the period 1995-2011; in doing so, we highlight salient patterns related to countries' GVC positioning - as well as some puzzling correlations - that emerge from the data. Third, we develop a theoretical framework - which builds on Caliendo and Parro's (2015) variant of the Eaton and Kortum (2002) model - that provides a structural interpretation of all the entries of the WIOD in a given year. Fourth, we resort to a calibrated version of the model to perform counterfactual exercises that: (i) sharpen our understanding of the independent effect of several factors in explaining the observed empirical patterns in the period 1995-2011; and (ii) provide guidance for how future changes in the world economy are likely to shape the positioning of countries in GVCs. |
| Keywords: | Downstreamness; global value chains; Input-Output Tables; Upstreamness |
| JEL: | D5 F1 F2 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12549&r=tid |
| By: | Lee, Sang Yoon (Tim); Shin, Yongseok |
| Abstract: | We analyze the effect of technological change in a novel framework that integrates an economy's skill distribution with its occupational and industrial structure. Individuals become managers or workers based on their managerial vs. worker skills, and workers further sort into a continuum of tasks (occupations) ranked by skill content. Our theory dictates that faster technological progress for middle-skill tasks not only raises the employment shares and relative wages of lower- and higher-skill occupations among workers (horizontal polarization), but also raises those of managers over workers as a whole (vertical polarization). Both dimensions of polarization are faster within sectors that depend more on middle-skill tasks and less on managers. This endogenously leads to faster TFP growth of such sectors, whose employment and value-added shares shrink if sectoral goods are complementary (structural change). We present several novel facts that support our model, followed by a quantitative analysis showing that task-specific technological progress-which was fastest for occupations embodying routine-manual tasks but not interpersonal skills-is important for understanding changes in the sectoral, occupational, and organizational structure of the U.S. economy since 1980. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12524&r=tid |
| By: | Lionel Nesta (Université Côte d'Azur; GREDEG CNRS; OFCE Sciences Po. Paris; SKEMA Business School); Elena Verdolini (Fondazione ENI Enrico Mattei (FEEM)); Francesco Vona (OFCE Sciences Po. Paris; SKEMA Business School) |
| Abstract: | This paper analyzes the effect of environmental policies on the direction of energy innovation across countries over the period 1990-2012. Our novelty is to use threshold regression models to allow for discontinuities in policy effectiveness depending on a country's relative competencies in renewable and fossil fuel technologies. We show that the dynamic incentives of environmental policies become effective just above the median level of relative competencies. In this critical second regime, market-based policies are moderately effective in promoting renewable innovation, while command-and-control policies depress fossil based innovation. Finally, market-based policies are more effective to consolidate a green comparative advantage in the last regime. We illustrate how our approach can be used for policy design in laggard countries. |
| Keywords: | Directed technical change, threshold models, environmental policies, policy mix |
| JEL: | Q58 Q55 Q42 Q48 O34 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2018-01&r=tid |
| By: | Katarina Bacic (Knowledge Network Ltd.); Ivana Rasic Bakaric (The Institute of Economics, Zagreb); Suncana Slijepcevic (The Institute of Economics, Zagreb) |
| Abstract: | The paper analyses the effects of urbanization and localisation economies on manufacturing firms’ productivity across urban landscapes in post-transition South-East European (SEE) countries. Fixed-effects panel data estimations on a large sample of firms show that the factors accounting for productivity advantages of manufacturing firms in urban post-transition SEE are related to the firms and to the environment in which these firms operate. Firms located in diversified cities benefit from a productivity premium generated in this type of agglomeration, while no evidence was found that the relative specialization across industries has any effect on firm productivity levels. |
| Keywords: | city, manufacturing, total factor productivity, post-transition South-East Europe |
| JEL: | D24 R00 R12 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:1706&r=tid |
| By: | Bell, Alex; Chetty, Raj; Jaravel, Xavier; Petkova, Neviana; Van Reenen, John |
| Abstract: | We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high-impact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by reducing tax rates. In particular, there are many "lost Einsteins" - individuals who would have had highly impactful inventions had they been exposed to innovation. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12544&r=tid |
| By: | Dachs, Bernhard; Kinkel, Steffen; Jäger, Angela |
| Abstract: | We investigate the relationship between backshoring of production activities and investments in digital manufacturing technologies, also known as Industry 4.0. We argue that Industry 4.0 supports backshoring of manufacturing activities: First, because productivity increases by I4.0 technologies can neutralize cost advantages of offshoring locations and make labour arbitrage less appealing. Second, because increased flexibility provided by I4.0 technologies offers an incentive for firms to locate production close to their European customers. The empirical test is based on a large dataset of more than 2,000 manufacturing firms. Backshoring is still a rare event with a share of no more than 4% of all firms. Descriptive statistics as well as regression results indicate a positive correlation between the adoption of I4.0 technologies and companies’ backshoring propensity. |
| Keywords: | Backshoring, offshoring; Industry 4.0; technology |
| JEL: | F23 M11 O3 O33 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83167&r=tid |
| By: | Daron Acemoglu; Pascual Restrepo |
| Abstract: | We summarize a framework for the study of the implications of automation and AI on the demand for labor, wages, and employment. Our task-based framework emphasizes the displacement effect that automation creates as machines and AI replace labor in tasks that it used to perform. This displacement effect tends to reduce the demand for labor and wages. But it is counteracted by a productivity effect, resulting from the cost savings generated by automation, which increase the demand for labor in non-automated tasks. The productivity effect is complemented by additional capital accumulation and the deepening of automation (improvements of existing machinery), both of which further increase the demand for labor. These countervailing effects are incomplete. Even when they are strong, automation in- creases output per worker more than wages and reduce the share of labor in national income. The more powerful countervailing force against automation is the creation of new labor-intensive tasks, which reinstates labor in new activities and tends to increase the labor share to counterbalance the impact of automation. Our framework also highlights the constraints and imperfections that slow down the adjustment of the economy and the labor market to automation and weaken the resulting productivity gains from this transformation: a mismatch between the skill requirements of new technologies, and the possibility that automation is being introduced at an excessive rate, possibly at the expense of other productivity-enhancing technologies. |
| JEL: | J23 J24 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24196&r=tid |
| By: | Wim Naudé (Maastricht University, Maastricht School of Management and UNU-MERIT/MGSoG, Maastricht, The Netherlands and IZA-Institute of Labor Economics, Bonn, Germany); Paula Nagler (Erasmus Research & Business Support, Erasmus University Rotterdam and UNU-MERIT/MGSoG, Maastricht, The Netherlands.) |
| Abstract: | Entrepreneurship in Germany has been stagnating. As a result, the effectiveness of technological innovation to improve labor productivity weakened, which has been implicated in rising income inequality and poverty. In this paper we provide an overview of technological innovation and labor productivity growth from 1871. From this we show that over the past three decades the economy has found it increasingly difficult to transform technological innovation into labor productivity growth: in glaring contrast to earlier periods. Despite higher spending on R&D and more personnel than ever working in research labs, labor productivity growth continues to decline. Two interrelated reasons are offered for this phenomenon. The first is that the national innovation system itself has certain weaknesses. The second is entrepreneurial stagnation. We discuss the weaknesses of the innovation system and the nature and causes of entrepreneurial stagnation. We call for policies that will improve the innovation system, educational and managerial capabilities, venture capital investments, and the contestability of markets. Strengthening social protection and raising real wages are important supportive measures. |
| Keywords: | Entrepreneurship, Germany, Innovation, Social Protection, Industrial Policy |
| JEL: | D31 L26 O33 O38 O52 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2018-02&r=tid |
| By: | Valeria Costantini (Roma Tre University, Rome, Italy); Francesco Crespi (Roma Tre University, Rome, Italy); Elena Paglialunga (Roma Tre University, Rome, Italy); Giorgia Sforna (Roma Tre University, Rome, Italy) |
| Abstract: | This paper aims to analyse the evolution of energy efficiency systems for the residential sector of EU countries over the past twenty years and the associated process of structural change occurred in EU economies. To this purpose, we develop a set of indicators to measure some significant characteristics of the energy efficiency systems and map European countries in terms of four dimensions: energy system, innovation system, policy mix design and export competitiveness. Building on these indicators we develop a cluster analysis identifying non-arbitrary homogeneous country groups according to several characteristics in order to investigate the co-evolution of technological trajectories, energy use performance and structural change in this specific domain. Results suggest the distinction of EU countries into four groups, that are individually and comparatively scrutinized shedding light on how the four dimensions here considered dynamically evolved and interacted within and across countries. Empirical findings reveal that the design of the domestic policy mix may play a key role in shaping technological trajectories and structural change processes that in turns allow an increase in external competitiveness performance. Such positive impact appears to be closely related to the quality and quantity of international relationships with main economic partners. |
| Keywords: | eco-innovation; policy mix; international competitiveness; structural change; energy efficiency; residential sector |
| JEL: | O31 O38 Q48 Q55 Q58 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2018-03&r=tid |