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We argue that key findings of the empirical literature on the effects of news about future technology—including their tendency to generate negative comovement of macro‐economic aggregates, and their puzzling disinflationary nature—are due to measurement errors in total factor productivity (TFP). In this paper, we estimate the macro‐economic effects of news shocks in the United States using an agnostic identification approach that is robust to measurement errors. We find no evidence of negative comovement conditional on a news shock, and the disinflation puzzle essentially vanishes under our identification strategy. Our results also indicate that news shocks have become an important driver of business‐cycle fluctuations in recent years. [ABSTRACT FROM AUTHOR]

Managers and academics are increasingly viewing innovating firms as being interdependent on other firms in the business ecosystem. But how might the structure of interdependencies shape the innovativeness of firms in an ecosystem? To answer this question, we develop a search-based theory that considers a multiplicity of upstream and downstream firms simultaneously innovating in an ecosystem, contributing to and searching for novel combinations of components. We conceptualize two types of structural interdependencies between firms in an ecosystem based on the structure of technological interactions between components and the structure of input–output flows between stages of production. Using a simulation model, we show that downstream firms can benefit from mixing and matching components produced upstream, whereas upstream firms can benefit from optimizing their search more narrowly around their focal components. Importantly, these benefits that accrue to upstream and downstream firms are significantly impacted by the structure of technological and flow interdependencies in the ecosystem. [ABSTRACT FROM AUTHOR]

The EU Commission launched an innovation strategy called Smart Specialization in 2012. Smart Specialization is a framework for developing policies unleashing place-based economic potential. Evaluations, however, have shown that appropriate innovation policy decisions are difficult. There is an innovation policy potential that must first be unleashed. This article shows how the application of a method – connectivity analysis – developed through a Baltic Sea Region project 'LARS – Learning Among Regions on Smart Specialization,' can be used to support Smart Specialization. The method includes transnational comparisons and targeted policy recommendations for public sector institutions operating within various institutional frameworks and different clusters. It consists of instruments (gaps and factors) measuring collaboration through interviews of 141 quadruple-helix stakeholders across eight Baltic Sea regions. [ABSTRACT FROM AUTHOR]

We are trying, through this research paper, to clarify the need to move towards the implementation of digital transformation strategies, which is considered one of the effective solutions in addressing the effects of shocks that strike national economies, and the Corona pandemic is the best evidence for that, despite its dire effects on the global economy, it has proven the necessity Relying on digital transformation strategies in the various sectors that form the national economy. The study reached a number of results related to the need to develop the infrastructure of the media and communication sector, which plays a leading role in digitizing all sectors that form the national economy, and that would mitigate the shocks that may afflict the national economies, and this can only be done through Relying on the human resource, which is the effective link in developing digital transformation strategies through research and innovation. [ABSTRACT FROM AUTHOR]

This ICC Special Issue commemorates the life and work of Professor Nathan Rosenberg. Nathan Rosenberg was one of the founders of the interdisciplinary field of study known as the "economics of innovation," and this Issue contains a series of papers by leading scholars in the field that address some of the key themes of Rosenberg's work, as well as a roundtable on the role, contributions, and intellectual legacy of Nate Rosenberg. [ABSTRACT FROM AUTHOR]

Deeply rooted in practice, design thinking lacks theory-driven empirical research on its effects. In this article, we combine the practical experience of design thinking with the theoretical advances of the dynamic capabilities framework. We examine how training team leaders in design thinking can develop their managerial sensing, seizing, and transforming capabilities; stimulate innovation in their teams; and influence team operational capability. We test the model using a quasi-experimental field study with a control group and a 4-month time lag. The intervention is a design thinking training program presented in six geographically isolated business units of a large multinational telecommunications company. We found that the training had a positive effect on the participants’ sensing and seizing capabilities, which had a positive effect on their transforming capability, team innovation output, and team operational capability. These positive effects were paralleled by a direct negative effect of the training on the operational capabilities of the participants’ teams. [ABSTRACT FROM AUTHOR]

What happens when firms in an oligopolistic industry find themselves lagging behind in a potentially dominant technology? If R&D costs are significant and catch-up is key, technology laggards must turn to each other and open up their innovation processes in order to survive. This article uses a real options framework to explain the motives of bitter rivals to engage in collaborative relationships in order to catch up with industry leaders in specific technologies. It shows that ex ante, their interests converge and this lays the foundation of “catch-up alliances”: competitors open up to catch up. However, they often bring vastly different resources to the alliance and, in the process of cooperation, what they learn may cause their interests to diverge. Furthermore, some participants may discount a technology trajectory on the basis of what they learn, and terminate efforts in that area. Therefore, the “road not taken” may be a valuable outcome of the open innovation alliance. This article uses the case of a global alliance in hybrid electric drivetrain automotive technology as the study context, and it analyzes the implications for managers facing similar decisions. [ABSTRACT FROM AUTHOR]

In this paper we investigate how different discourses on frugal innovation are articulated, and how the dynamics between these different discourses have led to a certain dominant understanding of frugal innovation today. We analyse the dynamic interactions between three discourses on frugal innovation: (1) innovations for the poor, (2) grassroots innovations by the poor, and more recently (3) co-creating frugal innovations with the poor. We argue that this latter discourse is articulated as a hegemonic project as it is designed to accommodate demands from both business and poor communities. We draw on Laclau and Mouffe's concepts of 'chain of difference', 'empty signifier' and 'floating signifier' to explain the advent of the hegemonic discourse on co-creating innovations with the poor. We show how a floating signifier with radical potential, frugal innovation, has been hijacked and co-opted in a hegemonic project that has leveraged powerful ambiguous signifiers, with co-creation acting as an empty signifier. To clarify what is problematic in this hegemonic intervention, we expose how contemporary frugal innovation discourse contributes to a project of governing and exploiting rather than helping the poor, in ways that benefit formal economic actors while further worsening global inequalities. [ABSTRACT FROM AUTHOR]

With a sample of 268 European Union (EU) regions and multilevel modelling, we demonstrate that different technological diversification measures measured as coherence and entropy-variety have different non-linear effects on regional productivity growth. These non-linear effects work in opposite directions to each other. Our analysis shows that higher regional productivity returns can be found in regions investing both around their existing technological capabilities as well as in more distant knowledge domains. Our findings have significant implications for understanding regional productivity growth processes and the implementation of Smart Specialisation Strategies. [ABSTRACT FROM AUTHOR]

Rapid changes in technology--including advances in augmented and artificial intelligence, machine learning, and mobile--are paving the way for significant changes not only in the channels through which education is delivered but in how education itself is structured. This article identifies eight ways in which education technology can change how learning is facilitated and who will facilitate that learning. Basic economic principles then provide a framework for thinking about how these changes will be embedded over time as education increasingly becomes a durable good providing increasing returns through network effects. [ABSTRACT FROM AUTHOR]

We present a simple 2-factor model that helps explain several capital asset pricing model (CAPM) anomalies (value premium, return reversal, equity duration, asset growth, and inventory growth). The model is consistent with Merton’s intertemporal CAPM (ICAPM) framework, and the key risk factor is the innovation on a short-term interest rate, the federal funds rate, or the T-bill rate. This model explains a large fraction of the dispersion in the average returns of the joint market anomalies. Moreover, the model compares favorably with alternative multifactor models widely used in the literature. Hence, short-term interest rates seem to be relevant for explaining several dimensions of cross-sectional equity risk premia. [ABSTRACT FROM PUBLISHER]

We argue that in Barcelona there is a multiplicity of innovative projects and experiences that go beyond Henry Etzkowitz and Loet Leydesdorff's (2000) "triple helix" model of innovation. The research results point to the coexistence of dominant innovation practices and emerging innovation practices. Both formats shape relationships between policy, technologies and market, deploying differentiated, but not opposing, innovation practices. Combining concepts from actor-network theory, ethnographic observations and network visualization techniques, we propose an approach to innovation that is more inclusive of the diversity of collective formats that create and manage socio-material arrangements or innovations. [ABSTRACT FROM AUTHOR]

In this article, we challenge the notion of the efficiency of factor markets and provide an alternative. We specifically identify both the environment- and actor-related origins of heterogeneity in markets. We first discuss how environments have an exaptive nature, where new uses and possibilities emerge continuously and are poised for the taking. We then highlight how actor perceptions result in heterogeneous outcomes, and how the identification of novel affordances-new uses or functions-for factors is a central origin of heterogeneity. We also discuss the existence of actor- and environmentrelated pressures toward homogeneity and seeming market efficiency. In conclusion, we highlight the implications of our arguments for the strategy and innovation debate, and for our understanding of the nature of markets and economic activity. [ABSTRACT FROM AUTHOR]

High-quality economic development (HQED) has recently become a crucial sustainable growth mode in China, which pursues economic growth while maintaining social equity and green ecology. The HQED of the Yangtze River Delta (YRD) has played an exemplary role in achieving the leap from "China speed" to "China Quality". In this paper, we first use the entropy-weight multidimensional comprehensive evaluation method to calculate the HQED index as a proxy for the quality of economic growth. Then, using panel data of 41 cities in the YRD, we conduct a comparative study to examine impacts of technological innovation (TI) on quantity and quality of economic growth by employing different panel estimation models over the period 2009-2019 and check the robustness in five ways. Finally, this paper investigates the TI-economic growth link based on the panel quantile regression across the conditional distributions of economic growth levels. Results show that TI has significantly positive effects in terms of both quantity and quality of economic growth, and the promoting effect on the quantity of economic growth is almost four times higher than that of quality under mean estimations by double fixed-effects. The effect on quantity of economic growth is also stronger than that of quality under the conditional distribution, and TI has a stronger impact for regions with higher levels of economic growth. [ABSTRACT FROM AUTHOR]

Inadequate learning is an oft-cited friction impeding the adoption of improved agricultural technology in the developing world. We provide experimental evidence that farmer field days, an approach used throughout the world where farmers meet, learn about new technology, and observe its performance, alleviate learning frictions and increase adoption of an improved seed by 40%. Further analysis demonstrates that these field days are both cost-effective and have a greater impact on poorer farmers. In contrast, we find no evidence that selecting the first adopters of new technology in participatory village meetings has any effect on future adoption. [ABSTRACT FROM AUTHOR]

We report on a multilevel study investigating the diffusion of robotic surgery in the Italian health care system between 1999 and 2010. A combination of qualitative and quantitative methods allowed us to link organization-level processes associated with the adoption and implementation of the innovation to its diffusion at the population level. Our findings advance the understanding of how early experiences with the implementation of an innovation influence later adoptions, and they draw attention to how the search for social gains drives some peripheral actors to pioneer an innovation and engage in practices of discursive persuasion and skill reproduction that, in turn, constitute them to be "exemplary users." These practices eventually trigger and support the isomorphic diffusion of the innovation, even in the presence of persistent uncertainty about its technical or economic benefits. [ABSTRACT FROM AUTHOR]

This article explores the hypothesis that innovation is an important driver of growth, using an interregional dynamic panel model that controls for endogeneity and captures cumulative effects. In Mexico, the evidence based on three regional criteria (geography, income, and innovation stimulus intensity) suggests that innovation has positive effects on growth, as has been theoretically hypothesized, but with gradual reductions from 2008 and significant variations by region and sector. Furthermore, public support for innovation produced different effects between areas with varying degrees of economic development, with greater elasticity in less-economically developed areas. This reality could facilitate the reduction of regional inequalities. Support for innovation should prioritize intensive high-tech projects, include more diverse economic agents, and have a regional perspective. [ABSTRACT FROM AUTHOR]

We conceive of information technology (IT) innovation posture-profile misalignment as a condition that exists when a firm's innovation posture (the extent to which a firm leads with IT innovation) does not match up with its innovation resource profile (the firm's stock of resources conducive to effective innovation). We theorize that firms with a posture-profile misalignment will see diminished returns from IT adoption because they will be less likely to possess (and be less effective at exploiting) crucial innovation resources when they need them most. We demonstrate how misalignment conditions the link between IT innovation adoption and organizational performance using a data set comprising electronic networking technologies in over 25,000 U.S. manufacturing plants. Productivity regression estimations reveal a consistent pattern that the association between IT innovation adoption and productivity is substantially diminished among misaligned firms. These empirical results provide initial confirmation of the theoretical value of innovation posture, innovation resource profile, and innovation posture-profile misalignment. We consider the implications for research on business value and innovation as well as for the practice of management. [ABSTRACT FROM AUTHOR]

Organizations increasingly initiate Internet-based innovation-contest communities through which individuals can interact and contribute to the innovation process. To successfully manage these communities, organizations need to understand what roles members assume, how they communicate and vary in their contribution behavior. In this exploratory study, we investigate the heterogeneous roles of contest participants based on an international innovation-contest community. We identify six user types associated with various behavioral contribution patterns by using cluster and social network analysis. The six user types further differ in their communicative content and contribution quality. Our paper contributes to a better theoretical understanding of distinctive user types in innovation-contest communities, their role in the community, and their contribution to the success of innovation contests in the era of social software. From a managerial perspective, the study provides guidance for contest platform design and appropriate reward structures. [ABSTRACT FROM AUTHOR]

The growth theories most widely used today ought to be replaced with a dynamic analysis of the economy, free of equilibrium and optimal trajectories. This article synthesizes the main characteristics of a possible alternative theory, in which innovations are the primary cause of the growth observed during the last two centuries. It also outlines a new method of dynamic analysis and presents some of its main results. It ends with some recommendations for economic policy. [ABSTRACT FROM AUTHOR]

Endogenous economic growth is a macroeconomic phenomenon in permanent disequilibrium. Ignorance of both aspects has led conventional theory to build models and theories that, although they enjoy formal rigor, do not adequately respond to three problems: 1) the explanation of the exponential growth of GDP per capita; 2) the Harrod instability dilemma; 3) scale problems related to doubly exponential growth. This article presents the new book by Luis Lorente, where a new paradigm is built that allows the integration of real and monetary aspects in a growth theory led by process innovations in permanent disequilibrium. This theory adequately responds to the three problems stated. In this way, new methods are provided to understand and explain the economic dynamics of really existing capitalist economies. [ABSTRACT FROM AUTHOR]

Media projections depict that robotics, process automation, and artificial intelligence threaten human workforce sustainability. Two oft-cited studies forecast that technological innovation could jeopardize more than one-third of the U.S. workforce. SigniBcant worker displacement would devastate federal funding that is heavily reliant on individual income tax revenue and payroll taxes. Concerns of massjoblessness have led Bill Gates and others to propose a robot tax, with some suggesting a complete reworking of the Internal Revenue Code to address looming predictions. While these ideas are critical to the robot immersion dialogue, they are largely premised on fear and the proposition that human labor should be protected. As history supports, automation has always threatened the human worl®rce. which has demonstrated a great propensity for adaptation. As resisting the tractor for fear of replacing farmers' grit would have been senseless, it is now imprudent to tax innovation for fear of automation substitution. From its inception, the U.S. Constitution has protected innovation and intellectual property. Similarly, the Internal Revenue Code serves to incentivize research and development. Taxing robots would disrupt our nation's deeply rooted tax policies. As a matter of astute policy, this Article advances that Congress should not impose a robot tax. This Article is the first to conduct a signiAcant literature review of the current proposals to tax robots, ultimately taking a contrarian view. It examines mankind's historical connection to labor amid fears of automation substitution and proposes that implementing fear-based tax policy based on job displacement projections is unsound. In addition, this Article advances that "robot" cannot be defined for tax purposes because its characteristics are not clearly delineated. Finally. it concludes that the proper strategic course for U.S. tax policy is to encourage innovative robotics. rather than discourage it. [ABSTRACT FROM AUTHOR]

The authors aim to advance extant understanding of the dynamics of firms operating abroad by considering the effects of innovation (research-and-development intensity, product and process innovations) on exports (breadth and depth), and vice versa. The study analyzes a panel data set of 696 Spanish manufacturing firms during 1994-2005 using Tobit and logit regressions and the Granger test of causality to offer a more complete picture of this complex relationship. They find broad support for the notion that innovation and exports have a reciprocal causal relationship, although the findings are partly nuanced by positive but nonsignificant associations between product innovation and exports and between export depth and process innovation. Furthermore, both export and innovation processes Granger-cause each other, demonstrating that there is a double causal relationship. [ABSTRACT FROM AUTHOR]

Does computerization increase or reduce the extent of skills that workers are required to have? The authors argue that the effects of computer-based technologies (CBT) are neither universal nor uniform. Rather, effects depend on the level of skill required by occupations prior to the introduction of CBT, and as such, a bifurcation emerges: occupations that historically (pre-computerization) could be accomplished with low skills and that entailed low-complexity tasks do not experience significant CBT, and they remain low skill or become less-skilled occupations, whereas historically high-skill occupations that entailed high-complexity tasks see an increase in CBT and the skills they require. The authors test this proposition using a unique data set that includes measures of the degree of computerization and changes attendant to computerization in the level of seven skills of core employees for a sample of 819 firms during 2000. This data set is linked by core employees' occupation to U.S. occupation- level data on three dimensions of task complexity during 1971 (pre-CBT). The authors find that occupations with higher pre- CBT task complexity are associated with subsequent adoption and intensity of CBT, and that CBT affects most skills positively. For simple tasks, however, CBT does not affect skills or affects them negatively. Results shed light on the skill-based technological change and skilling-deskilling debates and suggest that the relationships are contingent in more nuanced ways than the literature has suggested. [ABSTRACT FROM AUTHOR]

The article explores the relationship between education and the evolution of technology in the U.S. based on data gathered from 1914-2017. Topics discussed include mapping of changes in educational wage differentials from 1825 to 2017 with data from the Iowa State Census of 1915 and the traditional U.S. Census, demand for educated workers from skill-biased technological change, and the impact of rapid and disruptive technological change.

In this paper, we study the impact of noise traders' limited attention on financial markets. Specifically, we exploit episodes of sensational news (exogenous to the market) that distract noise traders. We find that on "distraction days," trading activity, liquidity, and volatility decrease, and prices reverse less among stocks owned predominantly by noise traders. These outcomes contrast sharply with those due to the inattention of informed speculators and market makers, and are consistent with noise traders mitigating adverse selection risk. We discuss the evolution of these outcomes over time and the role of technological changes. [ABSTRACT FROM AUTHOR]

Background Emerging states, such as Brazil, India, and China (the BICs), have big plans for big data and digitalization. Research has identified distinct policy visions regarding how technological advances can facilitate economic development and improve governance. Analysis This article examines how BIC governments frame data-driven ambitions across the diverse issue areas in which governments plan to use big data, as well as how they frame the role(s) of the government and citizens in the era of big data. Conclusion and implications We find clear differences in discussions of big data across the BICs and across issue areas. Moreover, we show the societal changes that governments seek to effect using big data vary greatly in scope, with Brazil and India seeking more fundamental changes than China. [ABSTRACT FROM AUTHOR]

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Copyright of Realidad Economica is the property of Realidad Economica and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

By using firm-level data provided by the fourth Community innovation Survey (CIS4)—for a selected number of EU countries—this article explores the employment impact of innovation extending the analysis to organizational change. The empirical evidence presented shows that both technological and organizational innovation exert a positive impact on employment mainly “indirectly,” that is by improving growth performances in firms. The strength of these indirect effects have been found to vary across different types of innovations. Despite the limits imposed by data at our disposal, the evidence presented seems to somewhat diminish the relevance of the labor displacing effects of the process innovation, the latter being strong and clearly visible only within the manufacturing industry and only when process innovations are combined with organizational changes. [ABSTRACT FROM PUBLISHER]

In a search for Schumpeterian solutions, the Obama Administration has made venture capital a cornerstone of its Clean Technology policy, adopting a strategy of providing large loan guarantees to a few venture capital financed firms. This article argues that three key conditions are necessary for venture capital to successfully open new economic spaces and then it applies them to assess the viability of venture capital investment in clean technology. The article concludes that large loan guarantees are unlikely to be effective. Other government policies such as SBIR grants, university R&D support, certain (de)regulatory actions, large-scale demonstration projects, and/or procurement decisions can better encourage both incremental and Schumpeterian innovation without distorting the turbulent dynamics of new market creation. This analysis can also be applied to other sector- and market-specific innovation policies. [ABSTRACT FROM AUTHOR]

The purpose of our study is to explore what relationship, if any, exists between advertising and economic growth. Endogenous growth theory (Romer 1990) is proposed as a possible solution to this 50-year debate. Using endogenous growth theory, we develop a model that links advertising to incentives for business innovation and for overall levels of information and knowledge in society. Results indicate that advertising expenditures offer significant explanatory power for long-term economic growth for a panel of 64 countries. This study contributes to the debate in two major ways: (1) by empirically showing that on a macrolevel, advertising expenditures and economic growth are related; and (2) by developing a theoretical economic growth model that demonstrates that not only are advertising expenditures related to economic growth, but that they can bring about economic growth. Finally, by providing a refinement of how marketing actions may positively affect the economy, the study contributes to the broader debate of advertising's role in society. [ABSTRACT FROM AUTHOR]