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on Technology and Industrial Dynamics |
| By: | Boeing, Philipp; Brandt, Loren; Dai, Ruochen; Lim, Kevin; Peters, Bettina |
| Abstract: | We study the evolution of patenting in China from 1985-2019. We use a Large Language Model to measure patent importance based on patent abstracts and classify patent ownership using a comprehensive business registry. We highlight four insights. First, average patent importance declined from 2000-2010 but has increased more recently. Second, private Chinese firms account for most of patenting growth whereas overseas patentees have played a diminishing role. Third, patentees have greatly reduced their dependence on foreign knowledge. Finally, Chinese and foreign patenting have become more similar in technological composition, but differences persist within technology classes as revealed by abstract similarities. |
| Keywords: | China, innovation, patents, large language model |
| JEL: | O30 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:289451&r=tid |
| By: | Carioli, Paolo; Czarnitzki, Dirk; Fernández, Gastón P. |
| Abstract: | Artificial Intelligence (AI) is considered to be the next general-purpose technology, with the potential of performing tasks commonly requiring human capabilities. While it is commonly feared that AI replaces labor and disrupts jobs, we instead investigate the potential of AI for overcoming increasingly alarming skills shortages in firms. We exploit unique German survey data from the Mannheim Innovation Panel on both the adoption of AI and the extent to which firms experience scarcity of skills. We measure skills shortage by the number of job vacancies that could not be filled as planned by firms, distinguishing among different types of skills. To account for the potential endogeneity of skills shortage, we also implement instrumental variable estimators. Overall, we find a positive and significant effect of skills shortage on AI adoption, the breadth of AI methods, and the breadth of areas of application of AI. In addition, we find evidence that scarcity of labor with academic education relates to firms exploring and adopting AI. |
| Keywords: | Artificial Intelligence, skills shortage, CIS data |
| JEL: | J63 M15 O14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:289448&r=tid |
| By: | Laureen de Barsy; Axel Gautier |
| Abstract: | In the past 20 years, large digital platforms have made many acquisitions, mainly young and innovative startups. Few of them have been reviewed by competition authorities and little is known on their evolution after acquisition. This paper intends to fill in this gap by looking at the development of the technologies owned by the acquired firms. We focus on technologies protected by a patent and we investigate whether an acquisition by a big tech contributes to their development. For this analysis, we use patent citations as a proxy for the innovation effort by the acquirer. Our main result is to show that acquisition increases the innovation effort of the acquirer but only temporarily. After 1.5 year, there is no longer a significant impact of the acquisition on the acquirer’s innovation effort. This decline is relatively larger when the acquired patent belongs to a core technology field of the acquiring firm or to a large patent portfolio. On the contrary, citations by the rest of the industry are not negatively affected by acquisition, which does not corroborate the idea that the acquired technology has reached its maturity. |
| Keywords: | mergers, digital, big techs, innovation, patents, killer acquisitions |
| JEL: | D43 G34 K21 L40 L86 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11025&r=tid |
| By: | Huiwen Gong (Center for Innovation Research, Business School, University of Stavanger, Norway); Bernhard Truffer (Department of Environmental Social Science, Eawag, Switzerland) |
| Abstract: | This paper investigates how leading industrial regions may maintain their leadership positions when being confronted with deep and radical transformations of their core industries. Focusing on the evolution of the German automotive sector in Baden-Württemberg over the past two decades, we introduce a theoretical framework for a layered regional architecture that weaves together regional imaginaries, innovation culture, and system change processes. We argue that in response to disruptive threats, active engagement with regional imaginaries becomes essential. The paper critiques conventional approaches in regional innovation policy for overlooking the critical role of the region's intangible facets as vantage points for policy intervention. Hence, it champions a strategy centered on actively shaping regional imaginaries while concurrently fostering the necessary cultural and tangible system transformations. |
| Keywords: | regional transformation, leading industrial regions; regional imaginaries; regional innovation culture; regional innovation system |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:aoe:wpaper:2402&r=tid |
| By: | Flavio Calvino; Chiara Criscuolo; Antonio Ughi |
| Abstract: | The COVID-19 pandemic caused an unprecedented global economic downturn, affecting productivity, business dynamics, and digital technology adoption. Using a comprehensive commercial database from Spiceworks Ziff Davis, this study analyses the firm-level drivers of digitalisation during the pandemic across 20 European countries. The findings show that a considerable share of firms introduced new digital technologies during the COVID-19 crisis. Notably, firms that were larger, more digitalised, and more productive before the pandemic were more likely to introduce new digital technologies in 2020 and 2021. Additionally, firms with pre-existing complementary technologies had a higher likelihood of adopting digital applications that gained momentum during the pandemic (such as digital commerce, collaborative software, cloud, and analytics). These patterns may increase polarisation among the best-performing firms and the rest of the business population. Public policy can play a key role in fostering an inclusive digital transformation in the post-pandemic era. |
| Keywords: | COVID-19, Digitalisation, Productivity, Technology adoption |
| JEL: | O33 D22 |
| Date: | 2024–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2024/03-en&r=tid |
| By: | Hongyong Zhang; Wenyin Cheng; Tao Liang; Bo Meng |
| Abstract: | Industrial subsidies are at the center of the recent political and economic debate. This paper examines the impacts of subsidies along domestic value chains on the export performance of Chinese firms. Using firm-level subsidy data and inter-provincial input-output tables, we measure direct subsidies and indirect subsidies in upstream industries. Our findings reveal several vital points: (1) Direct subsidies significantly enhance Chinese firms' export participation and volume. These subsidies are positively associated with firm investment and R&D expenditure. (2) Surprisingly, upstream indirect subsidies-particularly those from 1st tier upstream industries-have even larger effects on Chinese exports than direct subsidies. These upstream subsidies contribute significantly to export growth. (3) Both domestic firms and foreign-invested enterprises benefit from direct subsidies, but the effect of upstream subsidies varies by ownership. (4) Both direct and indirect subsidies are associated with higher export prices and product quality, leading to a lower quality-adjusted price. These export growth and quality upgrading are driven by direct subsidies through increased investment and R&D, and indirect subsidies through intermediate inputs. These results suggest that government support may promote quality upgrading and enhance the global competitiveness of Chinese exports. This paper contributes to the ongoing debate on government subsidy and industrial policy by shedding light on the intricate relationship between subsidies and exports. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:tcr:wpaper:e205&r=tid |
| By: | OECD |
| Abstract: | Multiple crises are triggering turbulence, instability and insecurity in contemporary societies, with impacts on economies, the environment, politics, and global affairs. An effective response will require governments to be more ambitious and act with greater urgency in their science, technology and innovation (STI) policies to meet global challenges. Sustained investments and greater directionality in research and innovation activities are needed, and these should coincide with a reappraisal of STI systems and STI policies to ensure they are “fit-for-purpose” to contribute to transformative change agendas. This policy paper provides a framework to support governments in making these assessments. It identifies six STI policy orientations for transformative change that should guide these assessments. It applies these orientations across multiple areas of STI policy, including R&D funding, the research and innovation workforce, and international R&D co-operation, and outlines a series of concrete policy actions STI policymakers can take to accelerate transformative change. |
| Date: | 2024–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:164-en&r=tid |
| By: | Yuichi Furukawa (Chuo University and RIETI); Tat-kei Lai (IESEG School of Management, Univ. Lille, CNRS UMR 9221 - LEM - Lille Economie Management); Kenji Sato Sato (Osaka Metropolitan University) |
| Abstract: | This study develops a new dynamic general equilibrium model to explore the role of people’s love of novelty as a cultural preference in innovation and innovation-based growth. The model considers (a) an infinitely lived representative consumer who has standard love-of-variety preferences for differentiated products and additional love-of-novelty preferences for new products, and (b) technological progress driven by two costly and time-consuming innovation activities, new product development and existing product development. We demonstrate that consumers’ love of novelty is a source of innovation-based growth, wherein economies with a moderate love of novelty can achieve innovation and long-run growth through endogenous cycles between periods in which new product development is active and those in which existing product development is active. However, if love of novelty preference is too weak or too strong, the economy is caught in an underdevelopment trap with less innovation and no long-run growth. We also provide some suggestive empirical evidence that supports our theoretical predictions. |
| Keywords: | Cultural preferences, macro-based behavioral economics; innovation and growth cycles; endogenous growth; underdevelopment traps |
| JEL: | E71 O40 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202406&r=tid |
| By: | Xiang Jiang; Hannah Rubinton; Xian Jiang |
| Abstract: | Custom software is distinct from other types of capital in that it is non-rival—once a firm makes an investment in custom software, it can be used simultaneously across its many establishments. Using confidential US Census data, we document that while firms with more establishments are more likely to invest in custom software, they spend less on it as a share of total capital expenditure. We explain these empirical patterns by developing a model that incorporates the non-rivalry of custom software. In the model, firms choose whether to adopt custom software, the intensity of their investment, and their scope, balancing the cost of managing multiple establishments with the increasing returns to scope from the non-rivalrous custom software investment. Using the calibrated model, we assess the extent to which the decline in the rental rate of custom software over the past 40 years can account for a number of macroeconomic trends, including increases in firm scope and concentration. |
| Keywords: | intangible capital, ICT, technology adoption, firm size distribution, non-rivalry |
| JEL: | E22 E25 D24 O14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11028&r=tid |
| By: | MASSINI Silvia; PISCITELLO Lucia; SHEVTSOVA Yevgeniya (European Commission - JRC) |
| Abstract: | Recent empirical studies show that firms that simultaneously engage in export/import and internal R&D activities experience stronger productivity benefits with respect to their domestically oriented counterparts. This analysis extends the scope of these studies to explore complementary effects on productivity of engaging in all three activities (i.e. import, export and internal R&D) simultaneously in the context of emerging market firms. The results indicate that emerging markets firms benefit from complementarities stemming from the assimilation and integration of knowledge from external sources (import and export) with internal knowledge (own R&D investment). The effect is more pronounced for private enterprises, especially when they trade with partners from advanced markets. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136621&r=tid |
| By: | Jason P Davis; Jian Bai Li |
| Abstract: | How are new technologies like generative AI quickly adopted and used by executive and managerial leaders to create value in organizations? A survey of INSEAD's global alumni base revealed several intriguing insights into perceptions and engagements with generative AI across a broad spectrum of demographics, industries, and geographies. Notably, there's a prevailing optimism about the role of generative AI in enhancing productivity and innovation, as evidenced by the 90% of respondents being excited about its time-saving and efficiency benefits. Analysis revealed different attitudes about adoption and use across demographic variables. Younger respondents are significantly more excited about generative AI and more likely to be using it at work and in personal life than older participants. Those in Europe have a somewhat more distant view of generative AI than those in North America in Asia, in that they see the gains more likely to be captured by organizations than individuals, and are less likely to be using it in professional and personal contexts than those in North America and Asia. This may also be related to the fact that those in Europe are more likely to be working in Financial Services and less likely to be working in Information Technology industries than those in North America and Asia. Despite this, those in Europe are more likely to see AGI happening faster than those in North America, although this may reflect less interaction with generative AI in personal and professional contexts. These findings collectively underscore the complex and multifaceted perceptions of generative AI's role in society, pointing to both its promising potential and the challenges it presents. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.04543&r=tid |
| By: | Gschnaidtner, Christoph; Dehghan, Robert; Hottenrott, Hanna; Schwierzy, Julian |
| Abstract: | A widespread approach to measuring the innovative capacity of companies, sectors, and regions is the analysis of patents and trademarks or the use of surveys. In emerging digital technologies this approach may, however, not be sufficient for mapping technology diffusion. This applies to blockchain technology which is in essence, a decentralized and distributed database (management system) that is increasingly used well beyond its originally intended purpose as the underlying infrastructure for a peer-to-peer payment system. In this article, we use an alternative method based on web-analysis and deep learning techniques that allow us to identify companies that use blockchain technology to determine its diffusion. Our analysis shows that blockchain is still a niche technology with only 0.88% of the analyzed firms using it. At the same time, certain sectors, namely ICT, banking & finance, and (management) consulting, show higher adoption rates ranging from 3.50% to 4.50%. Most blockchain companies are located at or close to one of the financial centers. Young firms whose business model is (partly) based on blockchain technology also locate themselves close to these centers. Thus, despite blockchain technology often being explicitly characterized as decentralized and distributed in nature, these adoption and strategic location decisions lead to "blockchain clusters". |
| Keywords: | technology adoption, blockchain technology, geographical distribution of firms, natural language programming |
| JEL: | C45 O33 R30 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:289452&r=tid |
| By: | Maria A. Cattaneo; Christian Gschwendt; Stefan C. Wolter |
| Abstract: | Advances in technology have always reshaped labor markets, increasing demand for highly skilled workers and automating human labor in many areas, leading to job creation but also losses. However, emerging AI innovations like ChatGPT may reduce labor demand in occupations previously considered "safe" from automation. While initial studies suggest that individuals adjust their educational and career choices to mitigate automation risk, the subjective monetary value of reduced automation risk is unknown. This study quantifies this value by assessing individuals' preferences for occupations for a hypothetical child in a discrete-choice experiment with almost 6'000 participants. The results show that survey respondents' willingness to accept lower wages for an occupation with a lower exposure to automation of 10 percentage points is substantial and amounts to almost 20 percent of an annual gross wage. Although the preferences are quite homogeneous, there are still some significant differences in willingness to pay between groups, with men, younger people, those with higher levels of education, and those with a higher risk tolerance showing a lower willingness to pay. |
| Keywords: | Artificial intelligence, automation, willingness to pay, survey experiment |
| JEL: | J24 O33 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0213&r=tid |
| By: | Kawaguchi, Daiji (University of Tokyo); Okazaki, Tetsuji (CEPR); Zhu, Xuanli (Keio University) |
| Abstract: | This study examines the impact of a technological change on employment and wages, focusing on the adoption of power looms in the silk-weaving industry. Exploiting plant-level panel data from 20th century Japan, we demonstrate that at the plant level, the power loom adaption increased the employment and wages of adult male workers, who likely conducted engineering tasks, and moderately increased wages of female adults, who were simultaneously displaced and reinstated to more non-routine tasks. The wage hike of adult workers induced the exit of less efficient plants and decreased female adult employment by 28 percent at the area level. |
| Keywords: | electrification, automation, employment, wage, second industrial revolution |
| JEL: | J23 J24 J31 N35 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16885&r=tid |
| By: | Criscuolo, Chiara; Lalanne, Guy |
| Abstract: | Industrial policy is back. After having been considered a taboo since the 1970s, “new industrial policies” are at the core of governments’ strategies to support countries during crises and enable the green and digital transitions. Virtually, every government has used and uses industrial policy, despite continued concerns related to anticompetitive effects, within and across countries, captured by vested interests and the opportunity cost of public funds, which economists have pointed out, based on previous unsuccessful experiences. In this paper, we contribute to the debate on industrial policy by presenting both a sound and simple framework to help design industrial policies and also data that allow the comparison of industrial strategies and their priorities across countries. First, this paper summarises our recent framework for industrial strategies, which is designed to offer practical policy advice and shed light on the complementarities between different policy instruments. Such a framework is particularly useful when designing complex mission-oriented industrial strategies promoting the green transition of the business sector. Second, this paper presents some salient results from the new “Quantifying Industrial Strategies” (QuIS) project, which gathers harmonised data on industrial policy expenditures, policy priorities, and policy instruments, thereby allowing the benchmarking of industrial strategies across countries. Based on the aforementioned conceptual framework, QuIS measures industrial policy expenditures across 9 OECD members, for the period 2019–2021. The data, now publicly available on the OECD website, show the importance of industrial policy expenditures, and the growing role of green industrial policies in countries industrial strategies. |
| Keywords: | new industrial policy; quantifying industrial strategies; industrial policy framework; industrial policy taxonomy; green industrial policy; Springer deal |
| JEL: | J1 R14 J01 |
| Date: | 2024–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122361&r=tid |
| By: | Francesco Lissoni (BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ernest Miguelez (BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Research on international migration and innovation relies heavily on inventor and patent data, with "migrant inventors" attracting a great deal of attention, especially for what concerns their role in easing the international transfer of knowledge. This hides the fact that many of them move to their host country before starting their inventive career or even before completing their education. We discuss the conceptual and practical difficulties that stand in the way of investigating other likely channels of influence of inventor's migration on innovation, namely the easing of skill shortages and the increase of variety in inventive teams, firms, and location. |
| Date: | 2024–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04513336&r=tid |
| By: | TORREJON PEREZ Sergio (European Commission - JRC); FERNANDEZ MACIAS Enrique (European Commission - JRC); HURLEY John |
| Abstract: | We investigate shifts in employment structures during the first decades of the twenty-first century at a global scale, focusing on a diverse set of countries, including nine EU countries, Canada, the U.S., Mexico, Brazil, Chile, Argentina, Russia, India, and S.Korea. Using the jobs-based approach as the common underlying methodology enhances the comparability of results. The findings highlight a lack of a singular prevailing pattern in employment changes, revealing a variety of shift patterns across countries and time periods. Nonetheless, occupational upgrading emerges as the most frequently observed pattern. A sectoral analysis underscores the pivotal role of private services as the primary driver of employment growth across most countries. A distinct contrast is evident between the dynamics of private and public services. Private services tend to foster job polarization, while public services lean towards job upgrading, with some notable exceptions. Examining the gender dimension over the past two and a half decades reveals a marked improvement in the status of female workers. In many instances, there has been a feminization of employment, and women have experienced more occupational upgrading than their male counterparts. While this represents a general trend, significant exceptions exist. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136358&r=tid |
| By: | Bratti, Massimiliano; Brunetti, Irene; Corvasce, Alessandro; Maida, Agata; Ricci, Andrea |
| Abstract: | This study leverages detailed administrative data on firms' job flows and variation across Local Labor Markets (LLMs) in the spread of COVID-19 to investigate shifts in labor demand prompted by the pandemic. To this end, we exploit the large spatial variation in the intensity of the pandemic observed in Italy. Namely, we investigate the effect of COVID-19 intensity on the composition of new hires in terms of jobs suitable for "working from home" (WFH), which emerged as a new standard during the pandemic. Our results reveal a significant increase in teleworkable-job hires in LLMs that were more severely hit by the pandemic, primarily driven by permanent contracts. An event study analysis uncovers substantial heterogeneity over time. Indeed, the effect was short-term and lasted only for two semesters after the pandemic's outbreak. Although this shift was transitory, by involving permanent hires, it had persistent effects on the structure of the workforce. An effect-heterogeneity analysis shows that effects were greater on the demand for female and younger workers and hires of larger firms, of service firms, and of those located in Northern Italy. |
| Keywords: | working from home, telework, labor demand, COVID-19, Italy |
| JEL: | D22 J23 J24 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1415&r=tid |