Investing in the knowledge economy: The comparative political economy of public investments in knowledge‐based capital

Abstract

Investments in education and retraining, or research and development have become essential in today's knowledge‐intensive economies. While private actors often underprovided such knowledge‐based capital due to various market failures, there is also considerable variation in the extent to which governments invest in knowledge‐based capital due to cross‐sectional and intertemporal trade‐offs. I argue that in trying to account for this variation, corporatist institutions are a neglected but crucial factor. By necessitating and facilitating cooperation and compensation, corporatism creates a more collaborative style of policy making and a sense of common ownership of policy problems that helps overcome the trade‐offs associated with investments in knowledge‐based capital. Using within‐between mixed‐effects models on a novel time‐series‐cross‐sectional dataset, I find strong support for this argument. Corporatist countries invest a lot more in knowledge‐based capital, and corporatism also affects how countries react to deindustrialization. This is an important finding given the key role of long‐term policy making in areas like climate change politics, pandemic preparedness or responding to the digital transformation.

Policy Responses to Technological Change in the Workplace

“…In these circumstances, unions and worker representatives are not opposed to automation because they can negotiate the broader terms of technological implementation as part of the already existing social pact. This is further corroborated by a study of 32 OECD countries from 1995 to 2017, which finds that corporatism has a significant positive impact on investment in digitalization, public education, and active labor market policy(Seidl 2022).…”

“…Minimum wage hikes can affect the incentive structure of firms to pursue automation. Broader corporatist structures, such as collective bargaining and work councils, impact the broader relationship between workers, unions, and employers and can affect trust and coordination in the implementation of new technologies (Seidl 2022). I will go into more depth on the function of labor market institutions in the following section because there is relevant empirical evidence.…”

The future of platforms, big data and new forms of capital accumulation

“…All productive and non-productive forces within capitalist and non-capitalist economies are undergoing considerable transformations, which cannot be captured within the dualities of coordinated market and liberal economies under the theoretical foundations of Varieties of Capitalism. Seidl (2018) was trying to capture digital transformation within varieties of platform capitalism and outlined the conceptual challenges in the process. The standardisation of varieties of capitalism during the age of platform economy is not possible due to "contested institutionalisation and stand out digital labour" within the diversity of platform capitalism.…”

“…The standardisation of varieties of capitalism during the age of platform economy is not possible due to “contested institutionalisation and stand out digital labour” within the diversity of platform capitalism. Seidl (2018)'s study is again confined within Germany and Sweden. It does not provide a worldwide picture of varieties of platform capitalism.…”

Investments in Education and the Question of Guaranteeing Its Quality: The Educological Aspects

“…Дослідження науковців з різних країн підтверджують, що державні інвестиції в освіту та навчання мають багато переваг і позитивних впливів на економіку та суспільство через підвищення кваліфікації та інтелектуального рівня працівників, тим самим зменшуючи безробіття та бідність у країні (Tudor et al, 2023;Ukaj et al, 2023). Освіта підвищує продуктивність і креативність людей, а також сприяє розвитку підприємництва та передових технологій, розвиваючи капітал, заснований на знаннях (Dia Kamgnia and Bergaly, 2022;Seidl, 2022). Освіта відіграє вирішальну роль у забезпеченні економічного та соціального прогресу, сприяючи інвестиційному економічному зростанню в довгостроковій перспективі (Ilyash et al, 2022;Sinha et al, 2023;Asongu and Shobande, 2022).…”