IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v26y2017i1p36-56.html
   My bibliography  Save this article

Innovation dynamics and labor force restructuring with asymmetrically developed national innovation systems

Author

Listed:
  • Santos-Arteaga, Francisco J.
  • Di Caprio, Debora
  • Tavana, Madjid
  • O’Connor, Aidan

Abstract

The concept of National Innovation System (NIS) has gained a great deal of intellectual and practical attention over the past three decades. We present an endogenous growth model where the NIS of a country determines its accumulation of technological knowledge and the arrival rate of innovations depends on the distance from the technological frontier to the current technological development level (TDL) of the country. We show how, even within an ideal common market environment and despite the compensatory mechanism provided by migration and the advantage of backwardness enjoyed by the laggard countries, differences in TDLs among countries foster the economic stagnation of technological laggards. That is, the structural consequences derived from technological underdevelopment are persistent and not simply due to the depreciation of human capital, but to the absence of innovation incentives that follows. Numerical simulations and an empirical analysis are performed to illustrate the main results and relate them to the current European common market setting and the innovation policies of its members.

Suggested Citation

  • Santos-Arteaga, Francisco J. & Di Caprio, Debora & Tavana, Madjid & O’Connor, Aidan, 2017. "Innovation dynamics and labor force restructuring with asymmetrically developed national innovation systems," International Business Review, Elsevier, vol. 26(1), pages 36-56.
  • Handle: RePEc:eee:iburev:v:26:y:2017:i:1:p:36-56
    DOI: 10.1016/j.ibusrev.2016.05.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096959311630066X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ibusrev.2016.05.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kincsö Izsak & Paresa Markianidou & Slavo Radošević, 2015. "Convergence of National Innovation Policy Mixes in Europe – Has It Gone Too Far? An Analysis of Research and Innovation Policy Measures in the Period 2004–12," Journal of Common Market Studies, Wiley Blackwell, vol. 53(4), pages 786-802, July.
    2. Marco Vivarelli, 2014. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of Economic Literature," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(1), pages 123-154.
    3. Jan Fagerberg & Bart Verspagen & Marjolein Caniëls, 1997. "Technology, Growth and Unemployment across European Regions," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 457-466.
    4. Van Roy, Vincent & Vertesy, Daniel & Vivarelli, Marco, 2015. "Innovation and Employment in Patenting Firms: Empirical Evidence from Europe," IZA Discussion Papers 9147, Institute of Labor Economics (IZA).
    5. Herrmann, Andrea M. & Peine, Alexander, 2011. "When 'national innovation system' meet 'varieties of capitalism' arguments on labour qualifications: On the skill types and scientific knowledge needed for radical and incremental product innovations," Research Policy, Elsevier, vol. 40(5), pages 687-701, June.
    6. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    7. Arcalean, Calin & Glomm, Gerhard & Schiopu, Ioana, 2012. "Growth effects of spatial redistribution policies," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 988-1008.
    8. Fagerberg, Jan & Srholec, Martin & Knell, Mark, 2007. "The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind," World Development, Elsevier, vol. 35(10), pages 1595-1620, October.
    9. Bosetti, Valentina & Cattaneo, Cristina & Verdolini, Elena, 2015. "Migration of skilled workers and innovation: A European Perspective," Journal of International Economics, Elsevier, vol. 96(2), pages 311-322.
    10. Marco Vivarelli, 2015. "Innovation and employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 154-154, May.
    11. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
    12. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-177, February.
    13. Sjoerd Hardeman & Koen Frenken & Önder Nomaler & Anne L. J. Ter Wal, 2015. "Characterizing and comparing innovation systems by different ‘modes’ of knowledge production: A proximity approach," Science and Public Policy, Oxford University Press, vol. 42(4), pages 530-548.
    14. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2014. "Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries," International Journal of Industrial Organization, Elsevier, vol. 35(C), pages 29-43.
    15. Choi, Jeongho & Yeniyurt, Sengun, 2015. "Contingency distance factors and international research and development (R&D), marketing, and manufacturing alliance formations," International Business Review, Elsevier, vol. 24(6), pages 1061-1071.
    16. Aghion, Philippe & Howitt, Peter, 2005. "Growth with Quality-Improving Innovations: An Integrated Framework," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 2, pages 67-110, Elsevier.
    17. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 43-61.
    18. Naushad Forbes & David Wield, 2008. "Innovation Dynamics in Catch-Up Firms: Process, Product and Proprietary Capabilities for Development," Industry and Innovation, Taylor & Francis Journals, vol. 15(1), pages 69-92.
    19. Ozturk, Ayse, 2016. "Examining the economic growth and the middle-income trap from the perspective of the middle class," International Business Review, Elsevier, vol. 25(3), pages 726-738.
    20. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    21. Bengt-Åke Lundvall, 2007. "National Innovation Systems—Analytical Concept and Development Tool," Industry and Innovation, Taylor & Francis Journals, vol. 14(1), pages 95-119.
    22. Parisi, Maria Laura & Schiantarelli, Fabio & Sembenelli, Alessandro, 2006. "Productivity, innovation and R&D: Micro evidence for Italy," European Economic Review, Elsevier, vol. 50(8), pages 2037-2061, November.
    23. Zheng, Nan & Wei, Yingqi & Zhang, Yabin & Yang, Jingjing, 2016. "In search of strategic assets through cross-border merger and acquisitions: Evidence from Chinese multinational enterprises in developed economies," International Business Review, Elsevier, vol. 25(1), pages 177-186.
    24. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    25. Walde, Klaus, 1999. "Optimal Saving under Poisson Uncertainty," Journal of Economic Theory, Elsevier, vol. 87(1), pages 194-217, July.
    26. Sharif, Naubahar, 2006. "Emergence and development of the National Innovation Systems concept," Research Policy, Elsevier, vol. 35(5), pages 745-766, June.
    27. Erol Taymaz & G, rard Ballot, 1997. "The dynamics of firms in a micro-to-macro model: The role of training, learning and innovation," Journal of Evolutionary Economics, Springer, vol. 7(4), pages 435-457.
    28. Marco Vivarelli, 2013. "Technology, Employment and Skills: An Interpretative Framework," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 66-89, June.
    29. Mukoyama, Toshihiko, 2003. "Innovation, imitation, and growth with cumulative technology," Journal of Monetary Economics, Elsevier, vol. 50(2), pages 361-380, March.
    30. Fulvio Castellacci & Jose Miguel Natera, 2015. "The Convergence Paradox: The Global Evolution of National Innovation Systems," Working Papers on Innovation Studies 20150821, Centre for Technology, Innovation and Culture, University of Oslo.
    31. Filippetti, Andrea & Archibugi, Daniele, 2011. "Innovation in times of crisis: National Systems of Innovation, structure, and demand," Research Policy, Elsevier, vol. 40(2), pages 179-192, March.
    32. Tommaso Antonucci & Mario Pianta, 2002. "Employment Effects of Product and Process Innovation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 295-307.
    33. Engel, Christoph & Kleine, Marco, 2015. "Who is afraid of pirates? An experiment on the deterrence of innovation by imitation," Research Policy, Elsevier, vol. 44(1), pages 20-33.
    34. Borrás, Susana & Edquist, Charles, 2013. "The choice of innovation policy instruments," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1513-1522.
    35. Castellacci, Fulvio & Natera, Jose Miguel, 2013. "The dynamics of national innovation systems: A panel cointegration analysis of the coevolution between innovative capability and absorptive capacity," Research Policy, Elsevier, vol. 42(3), pages 579-594.
    36. Gianfranco De Simone & Miriam Manchin, 2012. "Outward Migration and Inward FDI: Factor Mobility between Eastern and Western Europe," Review of International Economics, Wiley Blackwell, vol. 20(3), pages 600-615, August.
    37. Livanis, Grigorios & Lamin, Anna, 2016. "Knowledge, Proximity and R&D Exodus," Research Policy, Elsevier, vol. 45(1), pages 8-26.
    38. Wilson, Daniel J., 2009. "IT and Beyond: The Contribution of Heterogeneous Capital to Productivity," Journal of Business & Economic Statistics, American Statistical Association, vol. 27, pages 52-70.
    39. Mihály Borsi & Norbert Metiu, 2015. "The evolution of economic convergence in the European Union," Empirical Economics, Springer, vol. 48(2), pages 657-681, March.
    40. Ester G. Silva & Aurora A. C. Teixeira, 2011. "Does structure influence growth? A panel data econometric assessment of "relatively less developed" countries, 1979--2003," Industrial and Corporate Change, Oxford University Press, vol. 20(2), pages 457-510, April.
    41. repec:iza:izawol:journl:y:2015:p:154 is not listed on IDEAS
    42. López, Santiago M. & Molero, José & Santos-Arteaga, Francisco J., 2011. "Poverty traps in a frictionless world: The effects of learning and technology assimilation," Structural Change and Economic Dynamics, Elsevier, vol. 22(2), pages 106-115, June.
    43. Bogliacino, Francesco & Lucchese, Matteo & Pianta, Mario, 2013. "Job creation in business services: Innovation, demand, and polarisation," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 95-109.
    44. Wu, Jie & Wu, Zefu, 2014. "Local and international knowledge search and product innovation: The moderating role of technology boundary spanning," International Business Review, Elsevier, vol. 23(3), pages 542-551.
    45. Frédéric Docquier & Çağlar Ozden & Giovanni Peri, 2016. "The Labour Market Effects Of Immigration And Emigration In Oecd Countries," World Scientific Book Chapters, in: The Economics of International Migration, chapter 6, pages 187-226, World Scientific Publishing Co. Pte. Ltd..
    46. Dina Williams, 2011. "Russia's innovation system: reflection on the past, present and future," International Journal of Transitions and Innovation Systems, Inderscience Enterprises Ltd, vol. 1(4), pages 394-412.
    47. Christos Pargianas, 2016. "Endogenous Economic Institutions and Persistent Income Differences among High Income Countries," Open Economies Review, Springer, vol. 27(1), pages 139-159, February.
    48. Herstatt, Cornelius & Tiwari, Rajnish & Buse, Stephan, 2008. "India's National Innovation System: Key elements and corporate perspectives," Working Papers 51, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    49. Valentina Bosetti & Cristina Cattaneo & Elena Verdolini, 2012. "Migration, Cultural Diversity and Innovation: A European Perspective," Working Papers 469, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    50. Bernard Fingleton & Harry Garretsen & Ron Martin, 2015. "Shocking aspects of monetary union: the vulnerability of regions in Euroland," Journal of Economic Geography, Oxford University Press, vol. 15(5), pages 907-934.
    51. Castellacci, Fulvio & Natera, Jose Miguel, 2016. "Innovation, absorptive capacity and growth heterogeneity: Development paths in Latin America 1970–2010," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 27-42.
    52. Heitor, Manuel & Horta, Hugo & Mendonça, Joana, 2014. "Developing human capital and research capacity: Science policies promoting brain gain," Technological Forecasting and Social Change, Elsevier, vol. 82(C), pages 6-22.
    53. Varsakelis, Nikos C., 2006. "Education, political institutions and innovative activity: A cross-country empirical investigation," Research Policy, Elsevier, vol. 35(7), pages 1083-1090, September.
    54. Gupta, Manash Ranjan & Chakraborty, Bidisha, 2006. "Human Capital Accumulation and Endogenous Growth in a Dual Economy," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 47(2), pages 169-195, December.
    55. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute of Labor Economics (IZA).
    56. Jasjit Singh, 2007. "Asymmetry of knowledge spillovers between MNCs and host country firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 764-786, September.
    57. Furman, Jeffrey L. & Porter, Michael E. & Stern, Scott, 2002. "The determinants of national innovative capacity," Research Policy, Elsevier, vol. 31(6), pages 899-933, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santos Arteaga, Francisco J. & Tavana, Madjid & Di Caprio, Debora & Toloo, Mehdi, 2019. "A dynamic multi-stage slacks-based measure data envelopment analysis model with knowledge accumulation and technological evolution," European Journal of Operational Research, Elsevier, vol. 278(2), pages 448-462.
    2. Charis Vlados & Dimos Chatzinikolaou, 2020. "Stra.Tech.Man innovation, HRM and Perception of Educational Needs in Underdeveloped Business Ecosystems: The Case of Retail Sector Firms in Eastern Macedonia and Thrace," International Journal of Human Resource Studies, Macrothink Institute, vol. 10(2), pages 330354-3303, December.
    3. Alonso José Antonio & Arteaga Francisco Javier Santos, 2020. "International migratory agreements: the paradox of adverse interest," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-29, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Santos Arteaga, Francisco J. & Tavana, Madjid & Di Caprio, Debora & Toloo, Mehdi, 2019. "A dynamic multi-stage slacks-based measure data envelopment analysis model with knowledge accumulation and technological evolution," European Journal of Operational Research, Elsevier, vol. 278(2), pages 448-462.
    2. López, Santiago M. & Molero, José & Santos-Arteaga, Francisco J., 2011. "Poverty traps in a frictionless world: The effects of learning and technology assimilation," Structural Change and Economic Dynamics, Elsevier, vol. 22(2), pages 106-115, June.
    3. L. Aldieri & C. P. Vinci, 2018. "Innovation effects on employment in high-tech and low-tech industries: evidence from large international firms within the triad," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 229-243, June.
    4. Flavio Calvino & Maria Enrica Virgillito, 2018. "The Innovation†Employment Nexus: A Critical Survey Of Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 83-117, February.
    5. Laura Barbieri & Mariacristina Piva & Marco Vivarelli, 2019. "R&D, embodied technological change, and employment: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press, vol. 28(1), pages 203-218.
    6. Proksch, Dorian & Haberstroh, Marcus Max & Pinkwart, Andreas, 2017. "Increasing the national innovative capacity: Identifying the pathways to success using a comparative method," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 256-270.
    7. Mariacristina Piva & Marco Vivarelli, 2018. "Innovation, jobs, skills and tasks: a multifaceted relationship," DISCE - Quaderni del Dipartimento di Politica Economica dipe0001, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    8. Laura Barbieri & Mariacristina Piva & Marco Vivarelli, 2016. "The Employment Impact of Different Forms of Innovation: Evidence from Italian Community Innovation Survey," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1620, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    9. Castellacci, Fulvio & Natera, Jose Miguel, 2013. "The dynamics of national innovation systems: A panel cointegration analysis of the coevolution between innovative capability and absorptive capacity," Research Policy, Elsevier, vol. 42(3), pages 579-594.
    10. Gabriele Pellegrino & Mariacristina Piva & Marco Vivarelli, 2019. "Beyond R&D: the role of embodied technological change in affecting employment," Journal of Evolutionary Economics, Springer, vol. 29(4), pages 1151-1171, September.
    11. Mariacristina Piva & Marco Vivarelli, 2018. "Is Innovation Destroying Jobs? Firm-Level Evidence from the EU," Sustainability, MDPI, vol. 10(4), pages 1-16, April.
    12. Callaghan, Christian William, 2021. "Growth contributions of technological change: Is there a burden of knowledge effect?," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    13. Piva, Mariacristina & Vivarelli, Marco, 2017. "R&D Expenditures and Employment: Evidence from Europe," GLO Discussion Paper Series 18, Global Labor Organization (GLO).
    14. Piva, Mariacristina & Vivarelli, Marco, 2017. "Is R&D Good for Employment? Microeconometric Evidence from the EU," IZA Discussion Papers 10581, Institute of Labor Economics (IZA).
    15. Horst Feldmann, 2013. "Technological unemployment in industrial countries," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1099-1126, November.
    16. Dr Max Nathan, 2013. "The wider economic impacts of high-skilled migrants: a survey of the literature," National Institute of Economic and Social Research (NIESR) Discussion Papers 413, National Institute of Economic and Social Research.
    17. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
    18. Vivarelli, Marco, 2012. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IZA Discussion Papers 6291, Institute of Labor Economics (IZA).
    19. Vincent Van Roy & Daniel Vertesy & Marco Vivarelli, 2015. "The Employment Impact of Innovation: Evidence from European Patenting Companies," DISCE - Quaderni del Dipartimento di Politica Economica ispe0075, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    20. Giovanni Dosi & Xiaodan Yu, 2017. "Technological catching-up, sales dynamics and employment growth: evidence from China's manufacturing firms," LEM Papers Series 2017/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    Keywords

    Economic stagnation; Technology assimilation; Technological development; Migration patterns; National innovation system; European single market;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:26:y:2017:i:1:p:36-56. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.