The role of innovation and human capital for the productivity of industries

Abstract

This paper sheds light on the relationship between innovation, human capital endowment and upgrading, organisational capital (OC) and labour productivity. In addition to assessing correlations, it uses a Heckman selection model to address causal links and to account for the ways in which skills and investment in R&D affect the probability of innovating. The analysis finds that innovative output, the proportion of OC-related workers, investment in training (especially in informal training) and physical capital intensity are positively and significantly related to productivity. In most estimates ICT skills, cognitive skills and the presence of highly skilled workers in an industry also emerge as having a significant and positive relationship with productivity. ICT skills further appear to indirectly shape productivity, through a positive relationship with innovation.

The human capital behind AI

“…For instance, the skill bundle related to 'advancing AI' in the United Kingdom in 2013-15 also encompasses skills around un-, semiand supervised learning, algorithms for pattern analysis, deep learning frameworks and graphical network models, to name just a few. These skills remain largely the same over time 14 .…”

“…literacy, numeracy and problem solving) and socioemotional skills for thriving in a digital and interconnected global economy has been widely acknowledged (OECD, 2016 [18]; OECD, 2017 [15]). Existing studies also point to the need to distinguish and analyse the role played by cognitive, socio-emotional and tasksbased skills, given that human capital is highly specific to the tasks carried out by workers (Gibbons and Waldman, 2004[19]; Gathmann and Schönberg, 2010 [20]; Grundke et al, 2017 [21]; 2018 [13]; Cammeraat, Samek and Squicciarini, 2021 [14]; 2021 [22]).…”

“…Studying skills demand is important to build better labour markets through policies that direct people into the jobs of the post-COVID world (OECD, 2020 [12]). [14]; 2021 [14]), this remains a non-trivial endeavour.…”

Knowledge creation, knowledge impact and knowledge diffusion: how do they connect with higher education?

“…One of the most common ways of stimulating innovation is investing in research and development (R&D) (Mason et al, 2019), the development of intellectual property (Soumadi, 2023), and directly in higher education (Yu, 2023). In addition, numerous studies confirm that the level of education is essential in the formation of innovations, the accumulation of human capital and the socio-eco-nomic development of a region or country, the level of its national security (Samusevych et al, 2021;Cammeraat et al, 2021;Chentukov et al, 2021;Safarov et al, 2022;Karabayev et al, 2023). In particular, Yu et al (2023) argue that increased spending on education can increase the innovative capacity of human capital and enhance their ability to perceive and apply new technologies, leading to transformation and knowledge transfer.…”