Embodied and disembodied technological change: The sectoral patterns of job-creation and job-destruction

Abstract

This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a vertically connected economy.Disembodied technological change turns out to positively affect employment dynamics in the "upstream'' sectors, while expansionary investment does so in the "downstream'' industries. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand, although this effect turns out to be statistically less robust.

Varieties of deindustrialization and patterns of diversification: why microchips are not potato chips

“…Contrary to any simple argument in favour of a natural tendency to deindustrialization (Ramaswamy and Rowthorn, 1997), the complex relationship between demand patterns and productivity dynamics strongly hints at the possible country specificity in the dynamics of structural change. Besides the relationship between product and process innovation in balancing labour demand patterns (Dosi, Piva, Virgillito, and Vivarelli, 2019), one has to bring into the picture the role of globalization. In that respect, Rodrik (2016) renewed the deindustrialization debate highlighting the tendencies for developing economies to experience a premature shift in both manufacturing employment and value added shares in the age of globalization.…”

Digital Transformation and Sustainable Oriented Innovation: A System Transition Model for Socio-Economic Scenario Analysis

“…New technologies will drastically transform the labour market resulting in many working activities being automated, and therefore creating less employment than the previous industrial revolutions. Dosi et al (2021) investigate the controversial relation between digitalization and social impacts, and particularly on jobs. Their model consists of a two-sector economy: (i) one upstream macro sector performing R&D activity and (ii) a downstream one, whereby capital-goods acquired from the upstream sector are used to produce goods.…”

“…The two sectors are linked through innovation, indeed the upstream determine product innovation while the downstream sector provides process innovation. Results of the model demonstrate that the replacement of obsolete technologies, equipment and tools impact negatively on labour demand [41]. Finally, Prause and Günther (2019) develop an agent-based model (ABM) to analyse the innovation spread of I4.0 technologies with respect to process and product innovations, and different strategies adopted by companies.…”

Back to the past: the historical roots of labor-saving automation

“…Linking (i) the evolutionary literature studying the employment impact of technical change, theoretically discussing different compensation mechanisms balancing labor-saving effects of innovation (Freeman and Soete 1987;Vivarelli 1995;Simonetti et al 2000;Piva and Vivarelli 2018;Calvino and Virgillito 2018;Dosi et al 2021), 2 (ii) the study of knowledge bases embedded in technology (Dosi 1988) and (iii) the emergence of long waves or alternatively of clusters of innovations (Silverberg and Verspagen 2003), our contribution departs from the literature in terms of 2 Many contributions are emerging in the recent years looking at the impact of automation adopting a neoclassical perspective (Acemoglu and Restrepo 2018;Graetz and Michaels 2018;Restrepo 2019, 2020) mostly relying on sectoral and local labor market analysis. The evolutionary tradition distinguishing heterogeneous impacts of embodied vs disembodied technical change upon employment has been explored in Barbieri et al (2018); Pellegrino et al (2019); Van Roy et al (2018) mostly adopting firm-level data with a panel structure, to mention a few recent studies.…”