Which skills contribute most to absorptive capacity, innovation and productivity performance? Evidence from the US and Western Europe

Skills are widely recognised as central to absorptive capacity, that is, firms' ability to identify and make effective use of knowledge, ideas and technologies that are generated elsewhere. But identification of the specific levels of education and skills that contribute most to the development...

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Published inEconomics of innovation and new technology Vol. 29; no. 3; pp. 223 - 241
Main Authors Mason, Geoff, Rincon-Aznar, Ana, Venturini, Francesco
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 02.04.2020
Taylor & Francis Ltd
Subjects
Absorptive capacity
Absorptivity
innovation
Innovations
International trade
Levels
Openness
Patenting
Productivity
R&D
Research & development
Skills
Workforce
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Abstract Skills are widely recognised as central to absorptive capacity, that is, firms' ability to identify and make effective use of knowledge, ideas and technologies that are generated elsewhere. But identification of the specific levels of education and skills that contribute most to the development of absorptive capacity is often hampered by the use of skill measures as proxies for absorptive capacity itself. Drawing on a cross-country industry-level dataset, we retain separate measures of key components of absorptive capacity, namely, skills, R&D investments and openness to foreign trade and investment. We then estimate a system of structural equations in order to evaluate the extent to which different levels of skill contribute to innovative output (measured by growth in patenting) and subsequently to growth in productivity. We find important roles for both high-level skills and upper intermediate (technician-level) skills in converting the knowledge sourcing opportunities provided by openness into innovative output. In final stages of production (making use of innovative output), productivity growth in countries near to the technological frontier is enhanced not just by high-level and upper intermediate skills but also by the skills of the workforce as a whole.
AbstractList Skills are widely recognised as central to absorptive capacity, that is, firms’ ability to identify and make effective use of knowledge, ideas and technologies that are generated elsewhere. But identification of the specific levels of education and skills that contribute most to the development of absorptive capacity is often hampered by the use of skill measures as proxies for absorptive capacity itself. Drawing on a cross-country industry-level dataset, we retain separate measures of key components of absorptive capacity, namely, skills, R&D investments and openness to foreign trade and investment. We then estimate a system of structural equations in order to evaluate the extent to which different levels of skill contribute to innovative output (measured by growth in patenting) and subsequently to growth in productivity. We find important roles for both high-level skills and upper intermediate (technician-level) skills in converting the knowledge sourcing opportunities provided by openness into innovative output. In final stages of production (making use of innovative output), productivity growth in countries near to the technological frontier is enhanced not just by high-level and upper intermediate skills but also by the skills of the workforce as a whole.
Author Mason, Geoff
Venturini, Francesco
Rincon-Aznar, Ana
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  surname: Venturini
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Snippet Skills are widely recognised as central to absorptive capacity, that is, firms' ability to identify and make effective use of knowledge, ideas and technologies...
Skills are widely recognised as central to absorptive capacity, that is, firms’ ability to identify and make effective use of knowledge, ideas and technologies...
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SubjectTerms Absorptive capacity
Absorptivity
innovation
Innovations
International trade
Levels
Openness
Patenting
Productivity
R&D
Research & development
Skills
Workforce
Title Which skills contribute most to absorptive capacity, innovation and productivity performance? Evidence from the US and Western Europe
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