UNTANGLED STUDY PUBLISHED IN STRUCTURAL CHANGE AND ECONOMIC DYNAMICS

Stehrer, a researcher at the Vienna Institute for International Economic Studies (wiiw), confirmed that investments in traditional assets such as transport equipment and machinery strongly affected employment growth. Contrary to popular beliefs about the destructive impact of automation on employment, Stehrer found that investments in digitalisation and intangibles, including databases, software, and R&D, did not destroy jobs, and had even a slight positive effect on labour demand.

Moreover, the study shows a mixed effect of capital accumulation on labour income shares, with generally minor effects observed. However, software and databases positively impacted labour income and compensation shares.

While the paper sheds light on the limited disruptive impact of new technologies on employment, it also emphasises the importance of enabling all workers to adapt to technological advancements. Hence, policy should concentrate on helping all workers engage with new technologies through training and skills development programs. These efforts could aid workers in learning new tasks and assist companies in implementing technological advancements.

Furthermore, policymakers must ensure the fair distribution of productivity gains from these technologies, particularly considering the negative correlations associated with certain assets, such as machinery and R&D.

Robert Stehrer, “The impact of ICT and intangible capital accumulation on employment growth and labour income shares”, Structural Change and Economic Dynamics, Volume 70, 2024, Pages 211-220.

The earlier version of this paper is available here

The paper is available here