IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i3p1838-d1039725.html
   My bibliography  Save this article

“Digitalisation” and “Greening” as Components of Technology Upgrading and Sustainable Economic Performance

Author

Listed:
  • Randolph Luca Bruno

    (School of Slavonic and East European Studies, University College London, 16 Taviton Street, London WC1H 0BW, UK
    Rodolfo DeBenedetti Foundation, 20135 Milan, Italy
    IZA Institute of Labor, 53113 Bonn, Germany
    Department of Economic Policy, Catholic University of Milan, 20123 Milano, Italy)

  • Monika Matusiak

    (European Commission, Joint Research Centre, 41092 Seville, Spain)

  • Kirill Osaulenko

    (School of Slavonic and East European Studies, University College London, 16 Taviton Street, London WC1H 0BW, UK)

  • Slavo Radosevic

    (School of Slavonic and East European Studies, University College London, 16 Taviton Street, London WC1H 0BW, UK)

Abstract

This paper explores the pace and direction of technological development by using a technology upgrade conceptual and measurement framework. This approach is applied to a sample of 164 economies worldwide between 2002 and 2019. Within the framework of technology upgrading, the paper focuses on digitalisation and “greening” as its two significant structural features. We explore their relationship with different components of technology upgrading and the relationship between technology upgrading components and different indicators of macroeconomic productivity. We have adopted a longitudinal fixed effects regression method with control for unobserved heterogeneity, clustered standard errors, and time dummies. Our results show that the growth of research and development (R&D) capabilities does not translate into aggregate productivity growth. There is a lack of unconditional relationship between aggregate productivity growth, digitalisation and greening. However, there are “latecomer advantages” to basic digitalisation for lower middle- and low-income economies and “latecomer liabilities” in the greening of the economy for upper-middle-income economies. In addition, levels of digitalisation and greening do not correlate, suggesting these two transformation processes are not yet integrated into ‘ICT-assisted greening’. When we control for income levels, the impact of components of technology upgrading on productivity is isolated to specific components and significant only for some income groups. The absence of a significant simultaneous effects of several components of technology upgrading on productivity points to large transformation failures. We conclude that the role of science and technology systems in spurring sustainable development would require a broad scope for science and technology (S&T) policies, their coordination, and integration with non-innovation policies.

Suggested Citation

  • Randolph Luca Bruno & Monika Matusiak & Kirill Osaulenko & Slavo Radosevic, 2023. "“Digitalisation” and “Greening” as Components of Technology Upgrading and Sustainable Economic Performance," Sustainability, MDPI, vol. 15(3), pages 1-29, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:1838-:d:1039725
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/3/1838/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/3/1838/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mowery, David C & Oxley, Joanne E, 1995. "Inward Technology Transfer and Competitiveness: The Role of National Innovation Systems," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(1), pages 67-93, February.
    2. Chauhan, Chetna & Parida, Vinit & Dhir, Amandeep, 2022. "Linking circular economy and digitalisation technologies: A systematic literature review of past achievements and future promises," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    3. Santoalha, Artur & Consoli, Davide & Castellacci, Fulvio, 2021. "Digital skills, relatedness and green diversification: A study of European regions," Research Policy, Elsevier, vol. 50(9).
    4. Radosevic, Slavo & Yoruk, Esin, 2018. "Technology upgrading of middle income economies: A new approach and results," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 56-75.
    5. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    6. Sara Amoroso & Pietro Moncada-Paterno-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarisation," JRC Working Papers JRC111347, Joint Research Centre (Seville site).
    7. Lazonick, William, 2002. "Innovative Enterprise and Historical Transformation," Enterprise & Society, Cambridge University Press, vol. 3(1), pages 3-47, March.
    8. Prescott, Edward C, 1998. "Needed: A Theory of Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-551, August.
    9. Kergroach, Sandrine, 2019. "National innovation policies for technology upgrading through GVCs: A cross-country comparison," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 258-272.
    10. Roger Fouquet & Ralph Hippe, 2022. "Twin Transitions of Decarbonisation and Digitalisation: A Historical Perspective on Energy and Information in European Economies," Working Papers 08-22, Association Française de Cliométrie (AFC).
    11. Bruno, Randolph Luca & Campos, Nauro F. & Estrin, Saul, 2018. "Taking stock of firm-level and country-level benefits from foreign direct investment," LSE Research Online Documents on Economics 87343, London School of Economics and Political Science, LSE Library.
    12. Sara Amoroso & Pietro Moncada-Paternò-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarization," Sustainability, MDPI, vol. 10(4), pages 1-20, April.
    13. Fu, Xiaolan & Gong, Yundan, 2011. "Indigenous and Foreign Innovation Efforts and Drivers of Technological Upgrading: Evidence from China," World Development, Elsevier, vol. 39(7), pages 1213-1225, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shanshan Gao & Wenqi Li & Jiayi Meng & Jianfeng Shi & Jianhua Zhu, 2023. "A Study on the Impact Mechanism of Digitalization on Corporate Green Innovation," Sustainability, MDPI, vol. 15(8), pages 1-21, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Randolph Luca Bruno & Elodie Douarin & Julia Korosteleva & Slavo Radosevic, 2019. "Determinants of Productivity Gap in the European Union: A Multilevel Perspective," LEM Papers Series 2019/25, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Pozzolo, Alberto Franco, 2004. "Endogenous Growth in Open Economies - A Survey of Major Results," Economics & Statistics Discussion Papers esdp04020, University of Molise, Department of Economics.
    3. Herrerias, M.J. & Orts, Vicente, 2013. "Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 781-797.
    4. J. Eduardo Ibarra-Olivo & Thomas Neise & Moritz Breul & Jöran Wrana, 2024. "FDI and human capital development: a tale of two Southeast Asian economies," Journal of International Business Policy, Palgrave Macmillan, vol. 7(3), pages 314-336, September.
    5. Antonio Martins-Neto & Nanditha Mathew & Pierre Mohnen & Tania Treibich, 2024. "Is There Job Polarization in Developing Economies? A Review and Outlook," The World Bank Research Observer, World Bank, vol. 39(2), pages 259-288.
    6. Su, Chi-Wei & Yuan, Xi & Umar, Muhammad & Lobonţ, Oana-Ramona, 2022. "Does technological innovation bring destruction or creation to the labor market?," Technology in Society, Elsevier, vol. 68(C).
    7. Papaioannou, Sotiris K., 2017. "Regulations and productivity: Long run effects and nonlinear influences," Economic Modelling, Elsevier, vol. 60(C), pages 244-252.
    8. Vujanović, Nina & Radošević, Slavo & Stojčić, Nebojša & Hisarciklilar, Mehtap & Hashi, Iraj, 2022. "FDI spillover effects on innovation activities of knowledge using and knowledge creating firms: Evidence from an emerging economy," Technovation, Elsevier, vol. 118(C).
    9. Das, Gouranga G. & Drine, Imed, 2020. "Distance from the technology frontier: How could Africa catch-up via socio-institutional factors and human capital?," Technological Forecasting and Social Change, Elsevier, vol. 150(C).
    10. Yoruk, Deniz E., 2019. "Dynamics of firm-level upgrading and the role of learning in networks in emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 341-369.
    11. Manca, Fabio, 2010. "Technology catch-up and the role of institutions," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1041-1053, December.
    12. Walheer, Barnabé, 2023. "Meta-frontier and technology switchers: A nonparametric approach," European Journal of Operational Research, Elsevier, vol. 305(1), pages 463-474.
    13. Yoruk, Esin & Radosevic, Slavo & Fischer, Bruno, 2023. "Technological profiles, upgrading and the dynamics of growth: Country-level patterns and trajectories across distinct stages of development," Research Policy, Elsevier, vol. 52(8).
    14. Bettina Becker & Nigel Driffield & Sandra Lancheros & James H. Love, 2020. "FDI in hot labour markets: The implications of the war for talent," Journal of International Business Policy, Palgrave Macmillan, vol. 3(2), pages 107-133, June.
    15. Zoltan Csefalvay, 2019. "What are the policy options? A systematic review of policy responses to the impacts of robotisation and automation on the labour market," JRC Working Papers on Corporate R&D and Innovation 2019-02, Joint Research Centre.
    16. Watkins, Andrew & Papaioannou, Theo & Mugwagwa, Julius & Kale, Dinar, 2015. "National innovation systems and the intermediary role of industry associations in building institutional capacities for innovation in developing countries: A critical review of the literature," Research Policy, Elsevier, vol. 44(8), pages 1407-1418.
    17. Sai Ding & Puyang Sun & Wei Jiang, 2016. "The Effect of Import Competition on Firm Productivity and Innovation: Does the Distance to Technology Frontier Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(2), pages 197-227, April.
    18. Sophia P. Dimelis & Sotiris K. Papaioannou, 2016. "Entry Regulation, Public Ownership and TFP Growth: Industry-Level Evidence from South European Countries," Manchester School, University of Manchester, vol. 84(6), pages 749-770, December.
    19. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-177, February.
    20. Vladimir D. Matveenk, 2011. "Interests of Social Groups, Direction of Technical Progress, and Barriers to Development: How Sustainable is the World Economic Growth?," DEGIT Conference Papers c016_047, DEGIT, Dynamics, Economic Growth, and International Trade.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:1838-:d:1039725. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.