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Technological Upgrading and Educational Composition of the Workforce

Author

Listed:
  • Dev Nathan

    (Southern Centre for Inequality Studies
    Institute for Human Development)

  • S. Rahul

    (Tata Institute of Social Sciences)

  • Joonkoo Lee

    (Hanyang University)

  • Shengjun Zhu

    (Peking University)

  • William Milberg

    (The New School for Social Research)

  • Lauren Johnston

    (The New School for Social Research)

Abstract

In the global production system, there is a division of labour, based on a division of knowledge between lead (headquarter) firms and contract suppliers. While lead firms have, so far, largely been located in the Global North, some countries of the Global South have advanced along to progress from supplier to headquarter firms. This paper studies the manner in which the skill requirement or educational composition of the workforce changes in this process of technological advancement. The countries studied are China, India, and South Korea with the United States of America (USA) taken as the comparator country. The paper starts with the overall trajectory of technological upgrading in these countries. It then analyses the ways in which firm-level research & development (R&D), taken as the indicator and driver of firms’ technology development strategies, is related to changes in productivity and the educational composition of the workforce. The paper shows that there is a broad positive correlation between the three variables, R&D investment, labour productivity and educational composition of the workforce. It points to the need to advance this analysis to look at other workforce indicators, such as the gender composition, wages, the quality of employment and the nature of supervision. At a methodological level, the paper argues that it is necessary to look at the role of a firm within a global value chain (GVC) to understand the composition of its workforce.

Suggested Citation

  • Dev Nathan & S. Rahul & Joonkoo Lee & Shengjun Zhu & William Milberg & Lauren Johnston, 2025. "Technological Upgrading and Educational Composition of the Workforce," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 68(2), pages 451-472, June.
    • Handle: RePEc:spr:ijlaec:v:68:y:2025:i:2:d:10.1007_s41027-024-00521-5
    DOI: 10.1007/s41027-024-00521-5
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    References listed on IDEAS

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    1. William MILBERG & Deborah WINKLER, 2011. "Economic and social upgrading in global production networks: Problems of theory and measurement," International Labour Review, International Labour Organization, vol. 150(3-4), pages 341-365, December.
    2. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    3. 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.
    4. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    5. Sanjaya Lall, 1996. "Learning from the Asian Tigers," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-38989-2, February.
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    Keywords

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    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J00 - Labor and Demographic Economics - - General - - - General

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