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The paper provides a novel, empirically grounded map of innovation ‘clubs’ in the EU, based on a unique analysis of micro-aggregated, country-level data. Using exploratory factor analysis we articulate innovation variables in a taxonomy of four ‘latent’ innovation theories: Network-Innovation-System, Kaldorian, New-Growth-Theory, and Schumpeterian. We then characterise clusters of countries (‘clubs’), based on their performance against this taxonomy, and design a new map of EU innovation clubs. We identify an articulated map of EU innovation hierarchy beyond the rather well-known ‘core-periphery’ structure, and interpret how some of the peripheries are functional to the ‘consolidated core’ of innovative countries, raising an issue of long-term sustainability of such hierarchies. We also find that even the most innovative clusters show concerning weaknesses. The strongest cluster in terms of its innovation system does not seem to exploit its full potential and lags behind with respect to radical product innovations. Instead, the leading cluster in terms of radical product innovations is strongly dependent on external innovative activity, is focused on scale-intensive sectors, and has a fairly weak innovation system. The periphery of small countries that show a healthy network structure, do so because they mainly include supplier-dominated firms, reliant on innovation inputs from the core. We offer some reflections on innovation policy within a broader view of EU cohesion.

We propose a simple model to study the conditions under which consumers prefer to purchase a good in coalition rather than individually. To identify those conditions, we study the full parameter space that defines the characteristics and preferences of heterogeneous consumers, the characteristics of the good, and the characteristics of a public service that offers the same services as the good. We find that shared ownership emerges only under niche conditions, for relatively lower income consumers with relatively higher demand. Furthermore, shared ownership is more likely to emerge if the shared good is relatively small and can be purchased in small coalition with lower coordination costs. Results are relevant to design sustainable consumption policies as they show that the diffusion of shared goods reduce the net number of goods in an economy, and therefore their environmental impact. However, we do not find any impact of shared ownership in reducing inequality in accessing goods. We show that policies that reduce the relative price of the shared purchase can accelerate the transition to a more sustainable shared consumption.

Creative industries are considered highly innovative and productive, constituting an important driver of economic change. For high-income countries, several studies discuss the positive spillovers of creative industries for the local economy, for instance by attracting creative workers, which can benet entrepreneurs and workers in other industries. Like many other activities, creative industries are likely to dier in low- and middle-income countries compared to high-income countries. Moreover, the existing evidence is based on correlations between variables likely to be endogenous. This paper contributes to the literature on the role of creative industries in driving economic change in two main ways. First, we make a rst attempt to control for endogeneity and identify the impact of creative industries on local economies. Second, we report evidence for a middle-income country. Using granular employment data, we study the agglomeration patterns of creative industries across Colombian cities between 2008 and 2017. Exploiting the co-location of creative industries with other industries, we estimate the relation between employment growth in creative and non-creative industries in the same city. Using a shift-share instrumental variable approach, we estimate the multiplier eect of employment growth in creative industries on the employment growth in the rest of the economy. Creative industries represented between 2.7 and 3.3 percent of Colombian employment in 2008 and 2017. We nd that creative industries agglomerate mainly in three large cities (Bogota, Medelln, and Cartagena) and in a few smaller cities. Such agglomeration is positively related to an increase in the employment of non-creative services industries. For a positive causal relation to materialize, creative industries should have a larger size or be more connected to other economic sectors. However, after controlling for endogeneity, we nd no signicant impact of an increase of creative industries employment on employment growth in other industries.

Analysts are rapidly developing methods to map publications to SDGs in the face of policy demands. However, as reported by Armitage et al. (2020), a high degree of inconsistency is found when comparing the bibliometric corpora obtained with different approaches. These inconsistencies are not due to minor technical issues, but instead they represent different interpretations of SDGs. Given the variety of understandings regarding the relationship between research and SDGs, we propose that bibliometrics analysts should not assume that there is one single, preferred or consensus way of mapping SDGs to publications. We propose instead that, since different stakeholders have contrasting views about the relationships between science and SDGs, the contribution of bibliometrics should be to provide a plural landscape for stakeholders to explore their own views. We describe here the beta-version of an interactive platform that allows stakeholders to scrutinise in a global map of science the clusters potentially related to SDGs.

The chapter adds to the literature on innovation and employment by looking at the relationship between R&D investment and the rise of alternative work arrangements, particularly self-employment (SE). The chapter first looks at the emergence of nonstandard work, alternative work arrangements and self-employment. General trends of SE in Europe are considered. The contributions that have looked at SE in relation to innovation strategies are surprisingly limited. The empirical contribution is focused on the analysis of local labor markets in the UK (Travel-to-Work Areas, TTWAs), and considers the initial concentration of routinized and non-routinized jobs. The probability that an individual shifts from paid employment to either unemployment or self-employment over the period 2001–2013 as linked to changes in R&D investment in the TTWA is empirically accounted for. Results show that overall R&D has negligible effects on the probability of workers to become self-employed. R&D increases the probability of moving from unemployment to paid employment, especially in routinized areas, and reduces the permeability between routinized and non-routinized workers. Also, a non-negligible increase in the probability that a routinized worker becomes SE as a result of R&D increase is found in low routinized local labor markets but not in highly routinized areas. The chapter sheds new lights on the effect of R&D on employment and self-employment in areas with different degrees of routinization, and adds to the discussion on the more general raise of alternative work arrangements in Europe by disentangling the characteristics of self-employment as resulting from R&D investment.

A transition to a low-carbon economy requires moving to the production of goods that are less energy- and material-intensive than current practices. This may prove difficult, as producer objectives may not align with reducing pollution, unless this is a consumer priority, or is imposed by regulations. It has been argued that changing lifestyles and consumer preferences can drive technological change towards sustainability. In this paper we use the model by Windrum et al. (2009b) to show that the interactions between the populations of consumers, producers and technologies, when product components are interdependent, generate complexity, as a result of which changing consumer preferences may be insufficient to achieve sustainability objectives. Complexity may influence negatively the rate and direction of innovations towards the production of greener goods, causing a vicious cycle. Firms tend to remain stuck in local optima of the existing technological landscape, if most consumers are satisfied with the non-green characteristics of goods. As a result, firms are less likely to explore innovation possibilities to improve environmental performance of their products, which in turn reduces consumer expectations with respect to the environmental quality of future goods. As pro-environment consumers also imitate the higher preferences for non-green characteristics, firms have even higher incentives to improve those characteristics in the current technological paradigm than to explore new greener paradigms. The toy model proposed in this paper can be applied to study diffusion of ‘green’ products in a number of industries and to study environmental policies that can reduce complexity. The paper also offers a selected review of micro and industry level models of sustainable transitions.

International audience; We study the relation between income distribution and growth, mediated by structural changes on the demand and supply sides. Using the results from a multi-sector growth model, we compare two growth regimes that differ in three aspects: labour relations, competition and consumption patterns. Regime one, similar to Fordism, is assumed to be relatively less unequal, more competitive and to have more homogeneous consumers than regime two, which is similar to post-Fordism. We analyse the parameters that define the two regimes to study the role of the economy’s exogenous institutional features and endogenous structural features on output growth, income distribution, and their relation. We find that regime one exhibits significantly lower inequality, higher output and productivity and lower unemployment compared to regime two, and that both institutional and structural features explain these differences. Most prominent amongst the first group are wage differences, accompanied by capital income and the distribution of bonuses to top managers. The concentration of production magnifies the effect of wage differences on income distribution and output growth, suggesting the relevance of competition norms. Amongst structural determinants, firm organisation and the structure of demand are particularly relevant. The way that final demand is distributed across sectors influences competition and overall market concentration; demand from the least wealthy classes is especially important. We show also the tight linking between institutional and structural determinants. Based on this linking, we conclude by discussing a number of policy implications that emerge from our model.

In order to better understand the complex and dialectical relationships between digital technologies, innovation, and skills, it is necessary to improve our understanding of the coevolution between the trajectories of connected digital technologies, firm innovation routines, and skills formation. This is critical as organizations recombine and adapt digital technologies; they require new skills to innovate, learn, and adapt to evolving digital technologies, while digital technologies change the codification of knowledge for productive and innovative activities. The coevolution between digital technologies, innovation, and skills also requires, and is driven by, a reorganization of productive and innovation processes, both within and between firms. We observe this in all economic sectors, from agriculture to services. Based on evidence on past technologies and the innovation literature, we suggest that we might require a new set of stylized facts to better map the main future trajectories of digital technologies, their adoption, use, and recombination in organizations, to improve our understanding of their impact on productivity, employment and inequality.

The paper offers a review of selected topics in the empirical literature on structural change and sustainability. We focus on aspects of structural change that directly affect emissions and energy intensity: changes of the sectoral composition of economies, trade and international fragmentation of production, technological change and innovation, and demand. We identify several empirical facts. First, only a few countries have experienced a decoupling between growth and emissions, due to proportionately faster growth rather than greater energy efficiency. Second, the long-term shift from manufacturing to services has not led, in all cases, to the de-materialisation of economies and a lower environmental burden. Exploitation of energy efficiency increases depends on the ability of the service sectors to incorporate technical changes to reduce energy intensity. Third, global trade and energy and emissions intensity trends support the ‘pollution haven’ hypothesis, which predicts displacement of the environmental burden from developed to emerging countries. The pursuit by developing countries of a long-term strategy of ‘trading jobs for emissions' is likely to exacerbate the asymmetry related to emissions intensities between developed and less developed economies. The review should inform debate on environmental policy within the broader context of innovation and development policies.

To what extent is scientific research related to societal needs? To answer this crucial question systematically we need to contrast indicators of research priorities with indicators of societal needs. We focus on rice research and technology between 1983 and 2012. We combine quantitative methods that allow investigation of the relation between ‘revealed’ research priorities and ‘revealed’ societal demands, measured respectively by research output (publications) and national accounts of rice use and farmers’ and consumers’ rice-related needs. We employ new bibliometric data, methods and indicators to identify countries’ main rice research topics (priorities) from publications. For a panel of countries, we estimate the relation between revealed research priorities and revealed demands. We find that, across countries and time, societal demands explain a country's research trajectory to a limited extent. Some research priorities are nicely aligned to societal demands, confirming that science is partly related to societal needs. However, we find a relevant number of misalignments between the focus of rice research and revealed demands, crucially related to human consumption and nutrition. We discuss some implications for research policy.

We discuss how different models assessing climate change integrate aspects of structural change that are crucial to improve understanding of the relation between changes in the environment and in the economy. We identify six related aspects of structural change, which have significant impact on climate change: sectoral composition, industrial organisation, technology, employment, final demand, and institutions. Economic models vary substantially with respect to the aspects of structural change that they include, and how they model them. We review different modelling families and compare these differences: integrated assessment models (IAM), computable general equilibrium (CGE) models, structural change models (SCM), ecological macroeconomics models in the Keynesian tradition (EMK) and evolutionary agent based models (EABM). We find that IAM and CGE address few of the aspects of structural change identified; SCM focus on the sectoral composition; and EKM study final demand and employment structure. But all these models are aggregate and omit the complexity of the interactions between structural and climate change. EABM have explored a larger number of aspects of structural change, modelling their emergence from the interaction of microeconomic actors, but have not yet exploited their potential to study the interactions among interrelated aspects of structural and climate change.

The paper adds to the literature on innovation and employment by looking at the relationship between R&D investments and the rise of alternative work arrangements, particularly selfemployment (SE). A literature review on the determinants of the emergence of non-standard work, alternative work arrangements and self-employment if offered first. The contributions that have looked at SE in relation to innovation strategies is surprisingly limited. General trends of SE in Europe are considered. The empirical contribution is focused on the analysis of local labour markets in the UK (Travel-To-Work-Areas, TTWAs), where their initial concentration of routinized and non-routinized jobs is considered. The probability that an individual shifts from paid employment to either unemployment or self-employment over the period 2001-13, as linked to changes in R&D investments in the TTWA is empirically accounted for. Results show that overall R&D has negligible effects on the probability of workers to become selfemployed. R&D increases the probability of moving from unemployment to paid employment, especially in routinized areas, and reduces the permeability between routinised and nonroutinised workers. Also, a non-negligible increase in the probability that a routinized worker becomes SE as a result of R&D increase is found in low routinised local labour markets, but not in highly routinised areas. The paper sheds new lights on the effect of R&D on employment and self-employment in areas with different degrees of routinization, and adds to the discussion on the more general raise of alternative work arrangements in Europe by disentangling the characteristics of self-employment as resulting from R&D investments.

The paper investigates the effects of firms’ investment in Research and Development (R&D) on employment dynamics in the British local labour markets (Travel to Work Areas). We distinguish between local areas characterised by the initial level of routinised employment of the workforce. We implement a instrumenting strategy to address endogeneity issues in the relation between innovation and employment. Our results suggest that increases in R&D investments mainly affect routinised areas, where the employment created is low skilled, concentrated in non-tradable sectors (like transport, construction) and services. A significant share of the jobs created is self-employment, concentrated in the 25-34 age cohort. We qualify the effect of R&D on self-employment by looking at local firms’ dynamics, which suggest that the increase in self-employment is reflected in a higher number of micro-firms. Rather, in non-routinized areas, R&D results in the expected increase in the demand of high-skilled workers and a reduced demand of low-skill employment.

Structural change can be both, a cause or a consequence of innovation, while structural change and innovations are usually accompanied by short-term outcomes of social inclusion or exclusion. Inclusion may in turn have an impact on further innovations. Yet, we find little evidence in the literature on the three-way relations between innovation, structural change and inclusion. This paper advances a first exercise in this direction. Given the multidimensionality of each (innovation, structural change, and inclusion), we extract the underlying unobserved common factor structure from various well-known macro indicators. With a structural vector auto regression (SVAR) model for a short panel of developing countries over 13 years, we find the following main results. First, we confirm the virtuous cycle between innovation and structural change, aligning with existing literature. Second, the strongest result is the positive effect of inclusion on both innovation and structural change, that suggests policy to improve inclusion beyond poverty and inequality. Third, on decomposing the innovation index (formal, firm-level and ICT), we find each related differently to both structural change and inclusion, that suggests specific policy roles in their influence on inclusion and structural change.

This paper focuses on the process of coalition formation conditioning the common decision to adopt a shared good, which cannot be afforded by an average single consumer and whose use cannot be exhausted by any single consumer. An agent based model is developed to study the interplay between these two processes: coalition formation and diffusion of shared goods. Coalition formation is modelled in an evolutionary game theoretic setting, while adoption uses elements from both the Bass and the threshold models. Coalitions formation sets the conditions for adoption, while diffusion influences the consequent formation of coalitions. Results show that both coalitions and diffusion are subject to network effects and have an impact on the information flow though the population of consumers. Large coalitions are preferred over small ones since individual cost is lower, although it increases if higher quantities are purchased collectively. The paper concludes by connecting the model conceptualisation to the on-going discussion of diffusion of sustainable goods, discussing related policy implications.

We study the relation between income distribution and growth mediated by structural changes on the demand and supply side. Using results from a multi-sector growth model we compare two growth regimes which differ in three aspects: labour relations, competition, and consumption patterns. Regime one, similar to Fordism, is assumed to be relatively less unequal, more competitive, and with more homogeneous consumers than regime two, similar to post-Fordism. We analyse the parameters that define the two regimes to study the role of exogenous institutional features and endogenous structural features of the economy on output growth, income distribution, and their relation. We find that regime one exhibits significantly lower inequality, higher output and productivity, and lower unemployment than regime two. Both institutional and structural features explain these difference. Most prominent among the first group are wage differences, accompanied by capital income, and the distribution of bonuses to top managers. The concentration of production magnifies the effect of wage differences on income distribution and output growth, suggesting the relevance of the norms of competition. Among structural determinants, particularly relevant are firm organisation and the structure of demand. The way in which final demand distributes across sectors influences competition and overall market concentration. Particularly relevant is the demand of the least wealthy classes. We also show how institutional and structural determinants are tightly linked. Based on this link we conclude by discussing a number of policy implications emerging from our model.

We study the impact of conflict on both the extensive and the intensive margin of child labor in Afghanistan. We identify and test two main mechanisms. First, if conflict reduces a household income through a decline in parent's compensations, child labor may insure against the decrease in consumption (extensive margin). Second, a child may work longer hours if the marginal benefits of working under conflict is greater than its marginal cost, which may depend on the relative compensations between adults and children, and on the alternative activities (e.g. schooling). Using detailed conflict data from the Afghan War Diary we identify the effect of conflict relying on a shift-share IV strategy. We find that conflict increases the probability that girls work, but reduces the number of hours worked. Our results suggest that this is due to a decrease in household income and an increase in the relative compensations of adults.

Focusing on a global value chain (GVC) for organic basmati rice, we study how farmers’ practices are governed through product and process standards, organic certification protocols, and contracts with buyer firms. We analyze how farmers’ entry into the GVC reconfigures their agencements (defined as heterogeneous arrangements of human and nonhuman agencies which are associated with each other). These reconfigurations entail the severance of some associations among procedural and material elements of the agencements and the formation of new associations, in order to produce cultivation practices that are accurately described by the GVC’s standards and protocols. Based on ethnography of two farmers in Uttarakhand, North India, we find that the same standards were enacted differently on the two farmers’ fields, producing variable degrees of (selective) compliance with the ‘official’ GVC standards. We argue that the disjuncture between the ‘official’ scripts of the standards and actual cultivation practices must be nurtured to allow farmers’ agencements to align their practices with local sociotechnical relations and farm ecology. Furthermore, we find that compliance and disjuncture were facilitated by many practices and associations that were officially ungoverned by the GVC. Keywords: governance, global value chain, agrofood standards, actor-network theory, sociotechnical agencement, performativity

We propose an agent-based computational model defining the following dimensions of structural change—organisation of production, technology of production, and product on the supply side, and income distribution and consumption patterns on the demand side—at the microeconomic level. We define ten different parameters to account for these five dimensions of structural change. Building on existing results we use a full factorial experimental design (DOE) to analyse the size and significance the effect of these parameters on output growth. We identify the aspects of structural change that have the strongest impact. We study the direct and indirect effects of the factors of structural change, and focus on the role of the interactions among the different factors and different aspects of structural change. We find that some aspects of structural change—income distribution, changes to production technology and the emergence of new sectors—play a major role on output growth, while others— consumption shares, preferences, and the quality of goods—play a rather minor role. Second, these major factors can radically modify the growth of an economy even when all other aspects experience no structural change. Third, different aspects of structural change strongly interact: the effect of a factor that influences a particular aspect of structural change varies radically for different degrees of structural change in other aspects. These results on the different aspects of structural change provide a number of insights on why regions starting from a similar level of output and with initial small differences grow so differently through time.

International audience; The paper analyses the effect of the dynamics of consumption preferences on the dynamics of macro–economic growth. We endogenously derive micro–dynamics of consumption behaviour as a result of the increase in the number of income classes. The different degrees of inertia in the adjustment of consumption levels to income changes affect firm selection and the dynamics of market structure, which is ultimately responsible for different regimes of macro–economic growth. We find, firstly, that higher heterogeneity in consumption preferences amplifies and accelerates mar-ket dynamics, leading to a swift shift from a Malthusian to a Kaldorian growth pattern. Secondly, consumption smoothing mainly affects the timing of such a take–off. Inertia in consumption delays the occurrence of a Kaldorian engine for growth.

El pdf corresponde con un Working Paper Series: SWPS 2015-23 (August); University of Sussex., A variety of quantitative techniques have been used in the past in future-oriented technology analysis (FTA). In recent years, increased computational power and data availability have led to the emergence of new techniques that are potentially useful for foresight and forecasting. As a result, there are now many techniques that might be used in FTA exercises. This paper reviews and qualifies quantitative methods for FTA in order to help users to make choices among alternative techniques, including new techniques that have not yet been integrated into the FTA literature and practice. We first provide a working definition of FTA and discuss its role, uses, and popularity over recent decades. Second, we select the most important quantitative FTA techniques, discuss their main contexts and uses, and classify them into groups with common characteristics, positioning them along key dimensions: descriptive/ prescriptive, extrapolative/normative, data gathering/inference, and forecasting/foresight., A first report form of this paper was prepared as part of the project financed by Nesta on ‘Research into the quantitative Analysis of Technology Futures’. We acknowledge further support from the US National Science Foundation (Award No. 1064146 ‘Revealing Innovation Pathways: Hybrid Science Maps for Technology Assessment and Foresight’)

The article provides a review of and presents some empirical evidence on the dynamics of knowledge, structural change and spatial concentration of economic activities, focusing on the case of business services. It explores how the role of knowledge has evolved in relation to the dimensions of: (i) science, technology and structural change; (ii) the long--term processes of tertiarisation of the economy - in particular the growth of business services; (iii) the spatial concentration of business services as an outcome of the increasing volume and complexity of knowledge and the need to manage it through spatial proximity. Our arguments are supported by empirical evidence on the spatial concentration of business services in the European regions.

The paper examines the effect of heterogeneous consumer trade-offs – between environmental performance, quality of service characteristics, and price – on the generation and diffusion of environmentally benign technology paradigms. We find that the direction, timing, and environmental impact of new paradigms is shaped by the distribution of consumer trade-offs. Of key importance are the initial distributions of consumer preferences, and how those distributions evolve over time. This has serious implications on environmental pollution, and for policy makers seeking to influence the ‘greening’ of consumer demand.

The paper examines the effect of heterogeneous consumer demand on the generation and diffusion of environmentally benign technology paradigms. The history of the shift from horse-based to car-based transport provides the basis for an empirically grounded multi-agent model of sequential technology competitions. Firms compete on price, product quality, and the environmental sustainability of their products, and improve their market position through product innovation. The trajectory of product innovation is shaped by the distribution of heterogeneous consumer preferences with regards to quality, price, and the environmental impact of consumption. The distribution of consumer preferences determines whether cleaner designs are developed within a technology paradigm, whether new, more environmentally benign paradigms are developed, and whether these new paradigms replace older, environmentally harmful technology paradigms.

The vertical scope of a firm, that is, which components or segments of the production processes are kept in–house and which are outsourced, is variously considered as depending on cost and/or technological conditions. Most of the literature focuses on the incentives for an individual firm facing exogenous competition and technological opportunities. In this paper we consider the problem from the perspective of the whole industry: in what respect does firm organizational behavior depend on the industry technological evolution and aggregate structure, and how does innovation and organizational behavior affect the industry structure. We build an evolutionary simulation model of an industry where competitors decide the number of internally produced components. We relate the industry average value of market outsourcing to the technological conditions prevalent in the industry. The results from the model shed light on a number of (apparently) contradictory suggestions in the economic and management literature.

The aim of this study is to analyse the main determinants of the adoption and use of information and communication technologies (ICT) and the relationship between ICT and the patterns of innovation in an Italian industrial district. The analysis is carried out on a database of 118 textile enterprises located in Biella, a well‐known industrial district specialized in medium to high quality woollen yarns and textiles, that have been interviewed following a structured questionnaire. On the whole, the rate of adoption and use of ICT in Biella is rather low and this confirms the results of other studies on industrial districts that are specialized in traditional sectors. Nevertheless, our analysis also shows that considering ICT as a general technology may be misleading. Instead, it is useful to disentangle the different ICT; in particular, there are significant differences between IT involving production, administration and logistic processes and the communication technologies (CT). Moreover, on a smaller sam...

A variety of quantitative techniques have been used in the past in Future-Oriented Technology Analysis (FTA). In recent years, increased computational power and algorithms, web-based searching, and data availability have led to the emergence of new techniques that are potentially useful for foresight and forecasting. As a result, there is now a wide palette of techniques that might be used in FTA exercises. However, it is often unclear how they differ, when the use of a techniques is appropriate, what type of insights it may yield, and how they can be combined. This article reviews and qualifies quantitative methods for FTA in order to help users to make choices among alternative techniques, including new techniques that have not been integrated yet in the FTA literature and practice. We first provide a working definition of Future-Oriented Technology Analysis (FTA) and discuss its role, uses, and popularity over recent decades. Second, we select 22 FTA techniques identified as the most important quantitative FTA techniques and then we review these techniques, discuss their main contexts and uses, and classify them into groups with common characteristics, positioning them along four key dimensions: descriptive/prescriptive; extrapolative/normative; data gathering/inference; and forecasting/foresight.

We study the relation between variety, market concentration, and economic growth, along different phases of economic development which entail a number of changes to the structure of production and consumption in the economy. We focus on three aspects of structural change, which are connected and are correlated to variety, market concentration, and economic growth: (i) product quality; (ii) firms’ mark-ups; and (iii) imitation of consumer preferences for price and quality. We model the interactions among several aspects of structural change such as firm size and hierarchical structure, innovation in capital vintages, the emergence of social classes, income distribution, and consumer preferences across and within classes. We find that market concentration has a significant and positive impact on economic growth only in the presence of sufficiently large demand. The strongest effects emerge in the presence of a more skewed firm size distribution and firms producing higher priced and higher quality goods. We find also that this effect is influenced strongly by different aspects of structural change. Changes in the behaviour (or income) of the less wealthy income classes is crucial as is investment in new capital vintages, and the emergence of diverse income classes with heterogeneous consumption preferences. In contrast, we find that supply side product variety, cœteris paribus , has no significant effect on growth.

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The paper analyzes both internal (to the firm) and external (geographical) determinants and obstacles to small firms’ relational and organizational adaptability in mature Italian industries. While presenting a review of the literature accounting for the two dominant typologies of adaptation in Italian mature industries, the chapter emphasizes the lack of systematic analysis on the influences of negative agglomeration externalities on both typologies of small firms’ adaptability. The empirical section distinguishes between district and non-district firms and controls for internal and external determinant to firms adaptabilities. Some interesting results follows regarding the influences played by Italian industrial districts.

We review the theories of growth and economic development in which the industrial sector plays a role. We briefly discuss the theoretical arguments that have been put forward in each of them and summarise the explanation of how industrialisation promotes growth and economic development. We follow an (occasionally overlapping) chronological order and find it convenient to distinguish three main periods in development thinking: the theories of the stages of economic development; the classical theories of economic development; and the modern views. The paper show that, with few exceptions, industrialisation has always been considered the driver of economic growth in economic theory. However, in much of the relevant literature, the superiority of industry is assumed or observed, rather than explained, suggesting that there are a number of unresolved issues behind the different theoretical arguments for industrialisation-led economic development. Any development policy that focuses on industrialisation should consider these arguments in relation to specific objectives and contexts, rather than taking them for granted.

The paper proposes a model that explains cross-country growth divergences over time for different aspects of structural change. The model formalises the links between production technology, firm organisation (functional composition of employment) on the supply side and the endogenous evolution of income distribution and consumption patterns on the demand side. Wage distribution is the main channel between the organisation of firms and consumption patterns, and firm selection is the main trigger of investment in new capital, productivity gains and cumulative growth. The model is able to reproduce empirical stylised facts on growth and income inequality associated with different stages of growth. We use VARs to estimate the causal relations between the three aspects of structural change. We then analyse the effect of the parameters that define the structure of an economy --and the way in which this unfolds through time-- on growth and income distribution via numerical simulation. Product variety, differences in consumption preferences, organisational complexity and production technology determine whether the economy experiences a take-off or a stagnating growth, and the associated distribution of income.

The paper offers a theoretical analysis of long-run economic growth as an outcome of structural changes. We model the microeconomic behaviour of firms in the final good and capital sectors, and the evolution of classes of workers/consumers. We carefully craft economic behaviour onto empirical evidence, and solve the model numerically. The results illustrate the microeconomic properties of the simulated growth patterns. In particular, we observe and explain the interactions between technological change, firm organization, income distribution, consumption behaviour and growth. We confirm the relevance and interdependence of these structural changes, and underline their microeconomic sources.

The paper aims to analyse the effect of initial structural conditions in the organisation and composition of production and in demand patterns, via changes in wages distribution, as affecting economic growth and income inequality. We develop an evolutionary model with agent-based micro-foundations and analyse the link between structural change and growth taking into account (i) firm-level organisational differences and technological changes, (ii) their impact on the structure of earnings and income of workers-consumers, and (iii) the consequent changes in consumption. The model articulates the links between production and organisation structures on the supply side, and the endogenous evolution of income distribution on the demand side. Simplied scenarios are identified via numerical simulations, in which patterns of aggregate growth are obtained as an emerging property of different structures of firms' organisation and production, functional composition of employment, income distribution and patterns of consumption.

We aim at contributing to the debate on the mechanisms and properties of economic fluctuations. We consider a crucial aspect among many thought to influence this ubiquitous and extremely relevant phenomenon: the interaction structure that characterises the organisation of production, that is, the production relation among sectors of a system. We build — and simulate — a very simple model representing an input–output system where sectors/firms adapt production and desired levels of stocks. Their output serves both an exogenous final demand and the intermediate demand solicited by the other sectors of the system. Series of simulation runs allow to derive relevant and non–obvious conclusions concerning the levels and, more importantly, the volatility of economic activity, as an outcome of the same, inherent, economic structure. We claim that the results that we obtain through the highly abstract representation we use, provide useful intuitions on the working of economic cycles, to be later integrated by further studies. As a by–product of our analysis, we also suggest that the methodology we adopt can provide valuable insights by allowing a detailed analysis of the time path generated in the artificial systems, and therefore assessing with precisions the same mechanisms that affect real– world systems. The natural following step, left for further research, is to investigate how those mechanisms are empirically generated.

The paper aims to shed light on the relation between technological research, competition and market dynamics, focussing on the role of product modularity. This relation is analysed via qualitative simulation modelling using a simple agent-based model. We define an economic system in which firms compete on the quality characteristics of a certain complex good, in a market where consumers have shown preferences for them. Firms are conceived as bounded rational agents that explore complex product technologies in order to improve their fitness in relation to the selection environment (i.e. the consumers' evaluation of the characteristics of the final good). The architecture of the good produced in the system is characterised by different degrees of modularity (i.e. the lower the correlations between the contributions of the different product components to the final product fitness, the simpler the good's technology and the higher the degree of modularity). On the other hand, the impact of product modularity on industrial dynamics is analysed using a set of quite homogeneous firms. First, the model yields highly differentiated dynamics for firms that start from similar initial conditions, pointing to the importance of their research strategies. Second, the dynamic patterns obtained show that firms may easily end up in technological lock-in in spite of initial good performance, suggesting that path-dependence could be broken. Third, modularity impinges directly upon market results: a decrease in modularity, by increasing the difficulty in searching the complex technology, selects a limited number of firms, thus determining concentration in market shares. Finally, the industrial dynamics are influenced by the evolution of the quality of the final good.