The relationship between innovation and employmentFirm-level effects and a value chain framework

Abstract

Historically, sharp contradictions have marked the discussion about the effects of innovation on unemployment. It is easy to see that new industries created a large number of jobs. Autor (2015) argues that, historically, new industries have hired far more people than they have put out of work. Although follow the Schumpeter's (1947) idea of creative destruction jobs frequently associated with process innovation are destroyed, but at the same time, others generally related to product innovation are created (see Vivarelli, 2014). The creative destruction theory also applies to the types of workers. Innovation often negatively affects the demand for unskilled work, but it is complementary with skilled workers, according to Skill-Biased Technology Change (SBTC).Nowadays, robotization generates an intense debate on employment effects. It allows, in conjunction with artificial intelligence, a substantial intensification of the automation process and therefore implies a drastic impact on labor productivity, generating a different effect on overall employment demand (Acemoglu & Restrepo, 2017; Arntz, Gregory, & Zierahn, 2017; Dorn, 2015). However, these studies do not take into account the potential positive effects of the introduction of new products, which could generate new markets and stimulate employment again...