The determinants of regional specialisation in business services: agglomeration economies, vertical linkages and innovation

The article accounts for the determinants of sectoral specialisation in business services (BS) across the EU-27 regions as determined by: (i) agglomeration economies (ii) the region-specific structure of intermediate linkages (iii) technological innovation and knowledge intensity and (iv) the presence of these factors in neighbouring regions. The empirical analysis draws upon the REGIO panel database over the period 1999–2003. By estimating a Spatial Durbin Model, we find significant spatial effects in explaining regional specialisation in BS. Our findings show that, besides urbanisation economies, the spatial structure of intermediate sectoral linkages and innovation, in particular Information and Communication Technologies (ICTs), are important determinants of specialisation in BS. The article contributes to the debate on the global versus local determinants of regional specialisation in BS by restating the importance of the regional sectoral structure besides that of urbanisation. We draw policy implications by rejecting the ‘footloose hypothesis’ for BS

Productivity in services twenty years on. A review of conceptual and measurement issues and a way forward

Griliches' seminal contribution on "Output measurement in the service sectors" (1992) is now more than twenty years old. The aim of this paper is to review and systematise the scholarship that has been produced since, to identify any step forward in the conceptualisation of service output, the measurement of service productivity and the account of technical change in affecting productivity in services that might have occurred. An agenda for both innovation and service scholars is proposed

Demand and Technology Determinants of Structural Change and Tertiarisation: An Input-Output Structural Decomposition Analysis for four OECD Countries.

The paper provides fresh empirical evidence on the relative role of changes in final and intermediate demand as affecting the changes in the sectoral structure of advanced economies. These latter have led, over the last three decades, to the massive growth of service sectors. The paper draws upon the recently released OECD Input- Output (I-O) tables. The empirical analysis is based on an I-O Structural Decomposition Analysis carried out on 13 manufacturing and service sectors, from the end of 1960s to the end of 1990s. Although heterogeneous sectoral patterns emerge, we find that the structural changes leading to the growth of services, particularly KIBS (Knowledge Intensive Business Services), are mainly (domestic) demand-led, whereas the role of foreign trade remains marginal even in the last decade. We infer that, even in the case of the most technologically advanced service sectors, (domestic) demand constraints affect the degree of exploitation of technological opportunities and the patterns of growth.Structural change, Growth of Services, Input–Output.

The changing face of innovation policy: implications for the Northern Ireland economy

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Taking services seriously: how policy can stimulate the 'hidden innovation' in the UK’s services economy

Policy could have an important role in stimulating innovation in services. However, policymakers have lacked robust evidence showing how these sectors innovate. Drawing on a survey of more than 16,000 firms, this research reveals the high levels of ‘hidden innovation’ in some services sectors, especially in how they develop new business models and exploit technology. But the research also reveals that innovation is confined to a minority of service firms, and that many lack the skilled personnel or intelligence on markets and technology that would enable them to become more innovative. Because of their dominance in the economy, improved performance by the UK’s services sectors is necessary if we are to significantly close the productivity gap between the UK and other leading nations. However, if we are to take innovation in services seriously, we must recognise that they innovate differently from advanced manufacturing. We need policies to support increased training and development, and the effective dissemination and exploitation of technology

Industrial policy for a European industrial renaissance: a few reflections

This paper raises and attempts to address three questions that add to the recent debate on industrial policies to promote a European \u201cindustrial renaissance\u201d. We ask (i) What type of de-industrialisation represents a threat for Europe? (ii) What type of structural change can industrial policy steer in a context of increasing international fragmentation of production, both across European countries and worldwide? (iii) What type of industrial policy shall we advocate, that goes beyond the manufacturing sectors? With no pretence to provide all the answers or yet another wish list of policy tools, we argue that we are \u201cdoomed to choose\u201d (Hausmann and Rodrik, 2006) what type of structural transformation is Europe in need of, in a context of harsher global competition from the emerging countries; of staggering income polarisation within Europe itself; of relentless international fragmentation of production processes. First, we claim that industrial policy should target sectors and segments of value chains that support the manufacturing sector and not necessarily represent a hollowing out of the industrial base. Second, industrial policy should target structural transformation alongside large \u201cmissions\u201d and learn from classical debates on industrialisationled development. Interventions should therefore go beyond the traditional vertical versus horizontal tools distinction and complement a \u201cmission-oriented\u201d plea with other tools, to avoid yet another \u201cone size fits all\u201d approach

The value of data: towards a framework to redistribute it

This note attempts a systematisation of different pieces of literature that underpin the recent policy and academic debate on the value of data. It mainly poses foundational questions around the definition, economic nature and measurement of data value, and discusses the opportunity to redistribute it. It then articulates a framework to compare ways of implementing redistribution, distinguishing between data as capital, data as labour or data as an intellectual property. Each of these raises challenges, revolving around the notions of data property and data rights, that are also briefly discussed. The note concludes by indicating areas for policy considerations and a research agenda to shape the future structure of data governance more at large

The saga of the Covid-19 contact tracing apps: lessons for data governance

This note selectively unpacks the rapid evolution of the (Western) debate around the opportunity to deploy contact tracing apps, alongside other digital tools such as apps for symptoms sharing and immunity certificates to mitigate the Covid-19 pandemics. I do so from the perspective of a social scientist interested in the implications of the development of digital tools at times of emergency in terms of data governance. I argue that a more articulated reflection is needed towards the development of a healthy institutional structure that regulates the role of large tech platforms, such as Google and Apple (G&A), and public institutions, in governing data, particularly when health data and public value are involved. I unravel the saga of contact tracing apps in the UK and EU, looking at the technical, legal and ethical aspects and I attempt to draw more general lessons for data governance

The effect of R&D growth on employment and self-employment in local labour markets

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

Conflict and Entrepreneurial Activity in Afghanistan: Findings from the National Risk Vulnerability Assessment Data

The paper examines the relationship between conflict and entrepreneurial activity in Afghanistan, drawing upon a unique data set, the National Risk and Vulnerability Assessment household survey 2005. Afghanistan is severely underdeveloped and poor. Conflict has persisted in vast swathes of the country for decades, so that Afghanistan may be more appropriately described as an in-, rather than post-, conflict country. At the same time, qualitative (and anecdotal) evidence suggests that entrepreneurial activity is ubiquitous, although mainly due to survival strategies rather than a spirit of entrepreneurialism We empirically explore whether conflict affects the likelihood of a household to engage in entrepreneurial activity, proxied by sources of income coming from holding a small business. We control for the household characteristics and those of the environment, such as social capital, access to resources and infrastructure, as well as the presence of a minimal institutional governance system, to isolate the impact of conflict on household entrepreneurial behaviour. We find that the direct negative effect of the conflict on entrepreneurship is very small. The results on the control variables suggest that (i) the generation of entrepreneurship has seen conflict and instability for a whole life,( ii) a small business is a mean of surviving in a situation where any other support is lacking, (iii) it is a viable strategy when the household can cover some of the associated risks, (iv) there is no indirect effect of conflict via institutions and infrastructure, and (v) entrepreneurial activity may substitute for lacking markets and governance institutions. These results call for further and more in-depth research on Afghanistan as an overlooked area of study by the academic and development research community despite representing a priority for internationally supported reconstruction.entrepreneurship, conflict, Afghanistan, national risk vulnerability assessment