Technological unemployment in industrial countries

Do Technological Innovations Affect Unemployment? Some Empirical Evidence from European Countries

“…An overview of research by Feldmann (2013) notes that most of them prove that technological change can increase unemployment in certain circumstances and in some cases even in the long run and this confirms the 19th century Malthus' statement that a rising demand for a product due to reduced prices is unlikely to be sufficient as demand for redundant workers is decreasing. Profit growth cannot be sufficient unless the companies firstly invest in capital-intensive technologies.…”

“…Although Kromann et al (2011) argue that the best variable reflecting technological changes in the economy is R&D expenditures, the patents, as Kortum (1997) suggests, is the main technological variable reflecting the important aspects of the technological process and, presumably, "correlating with the immeasurable dimensions of technological change." However, according to Feldmann (2013), Dernis and Khan (2004), the following limitations on the calculation of patents under their registration at the national patent office can be pointed out: first, the registration of patents in one office varies greatly according to their technical and economic significance; secondly, it is difficult to compare them internationally, since they are affected by local preferences and geographic location. For these reasons, the number of triadic patent families per one million inhabitants (independent/exogenous variable) which avoids these limitations is used in the research as the main output indicator of technological innovation.…”

“…However, analyzed research (see Table 1) provides an unambiguous answer about the impact of technological innovation on labor market parameters. Feldmann (2013) in his research showed that technological progress increases unemployment in the short term but, for example, Marcolin et al (2016) proved that technological innovation has a positive effect on employment. As noticed in the theoretical analysis, the empirical analysis usually also distinguishes the impact of product and process innovations on labor market parameters.…”

“…It should be noted that this variable also has disadvantages: (i) triadic patents do not differ between product and process innovation; (ii) SMEs rely less on patenting than large companies and that produces bias, since the average size of firms varies from country to country; (iii) some industries rely more on patents than others, which reflects a further bias, as the structure of industries varies between countries; (iv) the significance of triadic patent families varies among families; (v) application for the patent and its registration abroad costs money, so patents of a lower value are usually only completed in the country of the inventor, despite the fact that the European Patent Organization, the US Patent and Trademark Office and the Japanese Patent Office propose to take into account the potentially higher value of patents when they are registered with all three organizations (Feldmann 2013).…”

“…One approach (Say 2009;Schumpeter 2017) suggests that technological progress leads to process and product innovation, which, in turn, leads to job creation. According to others (Wood 2004;Feldmann 2013), technological change can increase unemployment. Liso and Leoncini (2011) state that technological advancement provides opportunities for higher wages for skilled workers due to increased demand, while others (Piva et al 2006) note that technological change negatively influences skilled and unskilled workers.…”