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Productive Robots And Industrial Employment: The Role Of National Innovation Systems

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  • Chrystalla Kapetaniou
  • Christopher A. Pissarides

Abstract

In a model with robots, automatable and nonautomatable production, we study robot‐labor substitutions and show how they are influenced by a country's “innovation system.” Substitution depends on demand and production elasticities, the country's innovation capabilities, and openness. Making use of World Economic Forum data, we estimate the relationship for 13 countries and find that countries with poor innovation capabilities substitute robots for workers much more than countries with richer innovation capabilities, which might complement them. Innovation capabilities play a bigger role in the high‐tech electronics sector than in other manufacturing and play a limited role in nonmanufacturing.

Suggested Citation

  • Chrystalla Kapetaniou & Christopher A. Pissarides, 2025. "Productive Robots And Industrial Employment: The Role Of National Innovation Systems," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(1), pages 25-52, February.
    • Handle: RePEc:wly:iecrev:v:66:y:2025:i:1:p:25-52
    DOI: 10.1111/iere.12738
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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