Innovation, creative destruction and structural change: firm-level evidence from European countries. Issue 4 (19th May 2017)

• Record Type: Journal Article
• Authors: Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
• Is Part Of: Industry and innovation. Volume 24:Issue 4(2017)
• Page Start: 346
• Page End: 381
• Publication Date: 2017-05-19
• Subjects: Innovation -- employment -- reallocation -- technology intensity -- compensation effect -- displacement effect -- cannibalisation effect; O33 -- J23 -- C26 -- D2; Industries -- Periodicals; Industrial management -- Periodicals; Industrial policy -- Periodicals; 338.005
• DOI: 10.1080/13662716.2016.1261695
• Languages: English
• ISSNs: 1366-2716

Abstract

Abstract: The shift of employment from lower to higher productive firms is an important driver for structural change and industry dynamics. We investigate this reallocation in terms of employment gains and losses from innovation. New employment created by product innovation may be offset by employment losses in related products, known as 'cannibalisation' or 'business stealing' effects in the literature, by employment losses from process and organisational innovation and by general productivity increases. The paper investigates this effect empirically with a large data set from the European Community Innovation Survey. We find that employment gains and losses increase with technology intensity of the sector. High-technology manufacturing shows the strongest employment gains and losses from innovation, followed by knowledge-intensive services, low-technology manufacturing and less knowledge-intensive services. The net contribution of innovation to employment growth is mostly positive, an exception being manufacturing industries in recession periods.