Month: June 2022

“The rise of the digital service economy in European regions” provides a comprehensive conceptualisation of the digital service economy and documents how this new way of doing business is gaining ground across Europe. The proposed conceptualisation entails an extensive range of businesses enabled by digital platforms. These businesses blur the boundaries between products and services, with the latter not only complementing the former but also substituting them. The digital service economy generates new benefits for users, creates new economic actors and new value creation models. The authors identify three value creation models within the digital service economy:

• product-service economy – strategy through which manufacturers offer services to their customers along with the products they buy. Such services could include technological training or consultancy.
• sharing economy – the creation of new online markets for underutilised assets (e.g. a spare seat in a car, a spare bedroom, spare time) which are made temporarily accessible to other users upon payment on the basis of a peer-to-peer exchange (BlaBlaCar, TaskRabbit, Airbnb)
• online service economy – a situation in which digital platforms provide services, products or content (e.g. mobility solutions, food and beverage services, payment) without owning assets necessary to produce or deliver such services and goods. This value creation model rests on the dematerialisation of assets or products enabled by the unbundling of products from the service a product can provide (Deliveroo, Uber)

The authors mapped the spread of different value creation models across Europe and found that:

• in most European regions a specific value creation model is pervasive. All forms of digital service economy are present only in the largest urban areas
• the sharing economy model is present in both advanced and relatively marginal regions
• the product-service economy is widely diffused in regions with a strong industrial specialisation profile
• the online service economy is well distributed across European countries and includes several intermediate areas
• marginal and less-developed regions are not affected by the new value creation models

The identification and assessment of the effects of the different digital service economy value creation models is extremely important for policymakers. The regions most exposed to the digital service economy are more likely to face important trade-offs between the economic opportunities it creates and the costs it can generate, in terms of widening inequalities and labour market problems. For these regions, the rise in inequalities can be an urgent and immediate issue requiring timely policy intervention.

Roberta Capello, Camilla Lenzi & Elisa Panzera (2022) The rise of the digital service economy in European regions,Industry and Innovation, DOI: 10.1080/13662716.2022.2082924

“Are Employees Happier when Staying Connected with their Companies Outside Working Hours?” analyses how using digital technologies to stay connected to work impacts employees’ well-being. Along with co-authors Thierry Pénard and Nicolas Poussing, Ludivine Martin examines the impact of two forms of connectedness: online communication through emails and smartphones, and remote access to companies’ networks, i.e. to files, management systems and software (information technologies). Researchers used a large survey on the working conditions and work quality of 14,685 employees in Luxembourg and found that:

• Being contacted regularly outside office hours has a negative impact on life satisfaction. Emailing or professional smartphone use is pervasive and can blur the boundary between work and private life, with detrimental effects on job and life satisfaction.
• Remote access to the company’s network is positively related to the improvement of life satisfaction and is associated with both lower job-related stress and better health. This kind of usage of digital tools provides more flexibility to work anywhere, and a better balance between professional and personal life.

Martin L, Pénard T, Poussing N. “Are Employees Happier when Staying Connected with their Companies Outside Working Hours?” Social Science Computer Review. May 2022.

The article can be downloaded here: https://journals.sagepub.com/eprint/FEGAGSUNJYBCYPPC78NF/full 

The study documents that worker-level variation in tasks has played a key role in the widening of the wage gap between German natives and foreigners. Storm finds idiosyncratic differences account for up to 34 per cent of the gap. Importantly, natives specialise in high-paying interactive activities not only between, but also within occupations. In contrast, foreign workers specialise in low-paying manual activities. This enhanced degree of task specialisation accounts for 11 per cent of the gap among high-wage earners and 25 per cent among low-wage earners, thus offering new insight into sources for imperfect substitution of native and foreign workers and consequently small migration-induced wage effects.

The article can be downloaded here:

https://onlinelibrary.wiley.com/doi/10.1111/labr.12220

“Labour market regimes, technology and rent-sharing in Japan”, an article written together with Kyoji Fukao, investigates a phenomenon for which the empirical evidence is very limited. Authors use instrumental variable methods and split-sample analysis, and find that:

• Rent-sharing is affected by contextual factors shaping workers’ bargaining power.
• Rent-sharing is higher when technological progress is faster and ICT capital intensity is higher.
• Rent-sharing declines with a larger share of non-standard employment, lower union density and a weaker role of seniority.

Fukao, K., Perugini, C., & Pompei, F. (2022). “Labour market regimes, technology and rent-sharing in Japan”. Economic Modelling, 105856

See: https://www.sciencedirect.com/science/article/pii/S026499932200102X?dgcid=author#!

“Tax breaks for incentive pay, productivity and wages: Evidence from a reform in Italy” analyses the impact of a tax break on incentive pay (introduced in Law n. 208/2015) on labour productivity and average wages in Italian firms. Pompei and co-authors Mirella Damiani and Andrea Ricci use a unique source of firm-level information, drawn from a large representative survey of Italian firms merged with the ORBIS archive. By applying difference-in-differences methods, they find that:

• the tax break has a positive effect on both labour productivity and average wages, although the positive effect on average wages is not confirmed by robustness tests.
• productivity impacts are mainly driven by family firms in northern regions, which benefit from the more dynamic business environment.

These results take into account unobserved heterogeneity and endogeneity issues.

Damiani, M.; Pompei, F. & Ricci, A. (2022). “Tax breaks for incentive pay, productivity and wages: Evidence from a reform in Italy”. British Journal of Industrial Relations, 1–26.

See: https://doi.org/10.1111/bjir.12676 (open access)