The event hosted seven presentations of research and one conference announcement. To find out more, please visit our events section.
The next Open Virtual Expert Café will take place on 31 August 2022, from 4-5.30 pm CEST. Register here to present your own work, or to just listen in and join the discussion.
“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:
The authors mapped the spread of different value creation models across Europe and found that:
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.
(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:
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
As globalisation has led to the outsourcing of administrative functions away from headquarters to developing countries, Central and Eastern Europe, with its young, educated workforce and lower labour costs, has become a hub for business services. The sector has been growing rapidly in Poland, and now accounts for 5.6% of total private sector employment. Yet the intensification of automation poses a challenge for this business model, as a large number of tasks performed at such centres are routine ones that can easily be automated.
Kowalik and her colleagues, including Piotr Lewandowski, Tomasz Geodecki and Maciej Grodzicki, were interested in employees’ attitudes toward automation, including whether they are afraid of losing their jobs, as well as management’s response to the process: are they investing in upskilling and re-skilling, or rather looking toward layoffs and disinvestment?
The study found that employees welcome automation and are not afraid of it process that removes tedious work and frees up resources. Moreover, despite automation, new jobs are being created.
However, some threats remain. With rising labour costs and other macroeconomic headwinds, some processes may easily be relocated away from Poland.
Within UNTANGLED the results of the study will be compared to research on the business services sector in Ireland and South Africa and will feed into policy recommendations and scenarios in a later stage of the project.
https://socialboundariesofwork.pts.org.pl/wp-content/uploads/2022/05/FINAL-SBOW22-program-and-book-of-abstracts-May2022.pdf
Photo courtesy of Vassil Kirov.
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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:
“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:
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:
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)
As part of Project UNTANGLED, which investigates the impact of technology on the labour market, the paper delves into whether Fourth Industrial Revolution (4IR) technologies such as AI, machine learning and the Internet of Things (IoT) can act as drivers of productivity. To answer this question, the paper analyses performance data from more than 800,000 companies from 16 European countries in 2011-2019. It examines whether innovative companies, defined as those with at least one patent application in a set of 4IR technological fields, improved their productivity versus their non-innovating peers.
While productivity growth is essential to increase wages and improve living standards, it has been slowing for many years in advanced economies. Moreover, within industries the distance between the companies that are most successful and the rest of the pack has been expanding, as laggards prove unable to improve their performance. Disruptive 4IR technologies, particularly AI, offer hope of reversing this trend.
“We found that productivity is 37% higher, and productivity growth 58% faster, at companies developing AI compared with peers that aren’t innovating in this field,” Francesco Venturini said. “Generation of AI technologies enables firms to catch up with the productivity leader. In practical terms, our finding means that to boost productivity, companies should shift their innovation focus to AI from other, less promising fields.”
In addition to disruptive technologies, the researchers also looked at managerial and organisational capabilities, seen as a key source of competitive advantage. One way of improving managerial practices is ISO 9001 certification. ISO 9001 is the world’s most recognised quality management system standard, aimed at helping companies meet the needs of their customers and other stakeholders more effectively.
“We found that companies which adopted ISO 9001 standards more easily closed the gap with the best performers, not only in terms of productivity, but also in terms of profits and average wages,” said Fabrizio Pompei.
The impact of managerial and organisational capabilities on productivity was analysed only at Italian companies, due to data availability. The researchers analysed 109,919 Italian companies, 7.43% of which had ISO 9001 certification.
“The introduction of ISO 9001 certification produces an immediate increase in productivity levels by 2.5%, and lagging positive effects of 4.9% in the first year and 7.6% in the second,” Fabrizio Pompei added.
The paper is available here
