IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v52y2020icp1-12.html
   My bibliography  Save this article

The new direction of technological change in the global economy

Author

Listed:
  • Antonelli, Cristiano
  • Feder, Christophe

Abstract

The direction and rate of technological change in the global economy exhibit contrasting trends. Since the end of the XX century, the rate of technical change measured by productivity growth has been stronger if its direction is more labor-intensive. This puzzling finding can be explained using an interpretative framework that integrates the induced technological change and localized knowledge approaches with the Schumpeterian creative response. It is hypothesized that the globalization of both product and financial markets induces a creative response based on localized knowledge which accounts for the new knowledge- and labor-intensive direction of technological change that is more effective and productivity-enhancing than capital-intensive innovations. Structural equation modeling confirms the hypotheses in 55 countries during the years 1995–2014. We find that human capital is particularly relevant in the OECD countries, while knowledge spillovers matter in the non-OECD countries.

Suggested Citation

  • Antonelli, Cristiano & Feder, Christophe, 2020. "The new direction of technological change in the global economy," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 1-12.
  • Handle: RePEc:eee:streco:v:52:y:2020:i:c:p:1-12
    DOI: 10.1016/j.strueco.2019.09.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X18304223
    Download Restriction: Full text for ScienceDirect subscribers only

    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. Giovanni Dosi & Mauro Sodini & Maria Virgillito, 2015. "Profit-driven and demand-driven investment growth and fluctuations in different accumulation regimes," Journal of Evolutionary Economics, Springer, vol. 25(4), pages 707-728, September.
    2. Nicholas Bloom & Mirko Draca & John Van Reenen, 2016. "Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity," Review of Economic Studies, Oxford University Press, vol. 83(1), pages 87-117.
    3. David Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "Concentrating on the Fall of the Labor Share," American Economic Review, American Economic Association, vol. 107(5), pages 180-185, May.
    4. Jan De Loecker & Frederic Warzynski, 2012. "Markups and Firm-Level Export Status," American Economic Review, American Economic Association, vol. 102(6), pages 2437-2471, October.
    5. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    6. McMillan, Margaret & Rodrik, Dani & Verduzco-Gallo, Íñigo, 2014. "Globalization, Structural Change, and Productivity Growth, with an Update on Africa," World Development, Elsevier, vol. 63(C), pages 11-32.
    7. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-146, February.
    8. Henry S. Farber & Daniel Herbst & ilyana Kuziemko & Suresh Naidu, 2018. "Unions and Inequality Over the Twentieth Century: New Evidence from Survey Data," Working Papers 620, Princeton University, Department of Economics, Industrial Relations Section..
    9. Cyrille Schwellnus & Andreas Kappeler & Pierre-Alain Pionnier, 2017. "The Decoupling of Median Wages from Productivity in OECD Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 44-60, Spring.
    10. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 61-103.
    11. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    12. Schumpeter, Joseph A., 1947. "The Creative Response in Economic History," The Journal of Economic History, Cambridge University Press, vol. 7(2), pages 149-159, November.
    13. Fabio Montobbio & Valerio Sterzi, 2011. "Inventing together: exploring the nature of international knowledge spillovers in Latin America," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 53-89, February.
    14. Joseph E. Stiglitz, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC's: The Labor Turnover Model," The Quarterly Journal of Economics, Oxford University Press, vol. 88(2), pages 194-227.
    15. Matthew J. Slaughter, 1999. "Globalisation and Wages: A Tale of Two Perspectives," The World Economy, Wiley Blackwell, vol. 22(5), pages 609-629, July.
    16. Ranis, Gustav & Stewart, Frances & Ramirez, Alejandro, 2000. "Economic Growth and Human Development," World Development, Elsevier, vol. 28(2), pages 197-219, February.
    17. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    18. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    19. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
    20. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    21. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    22. Daron Acemoglu, 2007. "Equilibrium Bias of Technology," Econometrica, Econometric Society, vol. 75(5), pages 1371-1409, September.
    23. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
    24. 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.
    25. Michael Elsby & Bart Hobijn & Ayseful Sahin, 2013. "The Decline of the U.S. Labor Share," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(2 (Fall)), pages 1-63.
    26. Berman, Eli & Machin, Stephen, 2000. "Skill-Based Technology Transfer around the World," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 12-22, Autumn.
    27. Antonelli, Cristiano & Scellato, Giuseppe, 2019. "Wage inequality and directed technological change: Implications for income distribution," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 59-65.
    28. Daron Acemoglu, 2015. "Localised and Biased Technologies: Atkinson and Stiglitz's New View, Induced Innovations, and Directed Technological Change," Economic Journal, Royal Economic Society, vol. 0(583), pages 443-463, March.
    29. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1055-1089.
    30. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.),Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    31. Alfred Kleinknecht & Flore N. van Schaik & Haibo Zhou, 2014. "Is flexible labour good for innovation? Evidence from firm-level data," Cambridge Journal of Economics, Oxford University Press, vol. 38(5), pages 1207-1219.
    32. Chad Syverson, 2017. "Challenges to Mismeasurement Explanations for the US Productivity Slowdown," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 165-186, Spring.
    33. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
    34. Engelbert Stockhammer, 2017. "Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies," British Journal of Industrial Relations, London School of Economics, vol. 55(1), pages 3-33, March.
    35. Kennedy, Charles, 1973. "A Generalisation of the Theory of Induced Bias in Technical Progress," Economic Journal, Royal Economic Society, vol. 83(329), pages 48-57, March.
    36. Bernard, Andrew B & Jones, Charles I, 1996. "Technology and Convergence," Economic Journal, Royal Economic Society, vol. 106(437), pages 1037-1044, July.
    37. Cameron, Gavin & Proudman, James & Redding, Stephen, 2005. "Technological convergence, R&D, trade and productivity growth," European Economic Review, Elsevier, vol. 49(3), pages 775-807, April.
    38. Kenneth J. Arrow, 1962. "The Economic Implications of Learning by Doing," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 155-173.
    39. David H. Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "Concentrating on the Fall of the Labor Share," CESifo Working Paper Series 6336, CESifo.
    40. Leamer, Edward E, 1996. "Wage Inequality from International Competition and Technological Change: Theory and Country Experience," American Economic Review, American Economic Association, vol. 86(2), pages 309-314, May.
    41. Cyrille Schwellnus & Andreas Kappeler & Pierre-Alain Pionnier, 2017. "Decoupling of wages from productivity: Macro-level facts," OECD Economics Department Working Papers 1373, OECD Publishing.
    42. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 165-204.
    43. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    44. Mario Pianta, 2017. "Innovation and economic change," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(8), pages 683-688, November.
    45. Iulia Siedschlag & Xiaoheng Zhang, 2015. "Internationalisation of firms and their innovation and productivity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(3), pages 183-203, April.
    46. Thomas Kemeny & David Rigby, 2012. "Trading away what kind of jobs? Globalization, trade and tasks in the US economy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 1-16, April.
    47. Cristiano Antonelli, 2018. "The Evolutionary Complexity of Endogenous Innovation," Books, Edward Elgar Publishing, number 18031, February.
    48. Atkinson, Anthony B & Stiglitz, Joseph E, 1969. "A New View of Technological Change," Economic Journal, Royal Economic Society, vol. 79(315), pages 573-578, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Globalization; Localized technological knowledge; Learning; Schumpeterian creative response; SEM;

    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

    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:streco:v:52:y:2020:i:c:p:1-12. 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: (Haili He). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    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 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.

    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.