This thesis includes two essays. Essay 1 analyzes the diffusion process of a cost-reducing technology innovation within an industry. Two factors generate the diffusion. The first factor is the gently declining production cost with the innovation, which makes technology adoption more profitable for firms with the passage of time. The other factor is the cost of technology adoption, which tends to retard adoption. The model explains multiple stylized facts and important observations in technology diffusion, which include (1) the S-shaped diffusion path, (2) the slowness in diffusion process, (3) permanent rejection of an innovation, (4) unprofitable technology adoption and, (5) the significant difference in diffusion rate across innovations.
My thesis is a collection of three essays that consider various aspects of a skillbiased technology diffusion as well as skill premium, human capital acumulation and redistributive policies. The first chapter, co-authored with Christian Hellström, investigates the effects of skill-bisead technology change (SBTC) on income inequality and skills supply in the last 30 years in the US. In spite of the intensive debate about the effects of SBTC, its general equilibrium effects on the accumulation of skills and labor supply have been neglected. Thus, we build a dynamic general equilibrium model, in which growth is driven by skill-biased technology diffusion. Households have forward-looking expectations, and differ in terms of innate and idiosyncratic acquisition of skills. Contrary to pure technology progress models, technology diffusion models provide an explanation for the slowdown of the skill premium in the 70s compatible with the slow productivity growth. We find that first, technology diffusion raises the demand for skills and, consequently, the supply of skills. Second, skill-biased technology diffusion explains both the slowdown and the sharp increase of the skill premium observed in the 70s and 80s, respectively. In spite of the slowdown of the skill premium in the 70s, households anticipate the speed up of the technology diffusion and raise their investment in education, even during the economic slowdown. Therefore, the skills supply has continually increased since the 70s. Through a calibration exercise, we replicate the US trends for the skill-premium, skills supply, unskilled wages, consumption inequality and labor supply. The second chapter is motivated by the finding that the skill-biased technology diffusion increases both the skill-premium and skills supply in the last 30 years in the US . This chapter analyzes the effectiveness of redistributive policies in periods of technology diffusion. We build a microfounded general equilibrium model with skill-biased technology diffusion, endogenous labor supply, schooling decisions and redistributive policies. We show that, under endogenous schooling decisions, lump-sum transfers are ineffective. This policy raises the skill premium, in particular during the economic boom and in the long run, and reduces the social welfare during almost all of the technology cycle. Yet education subsidies incentivize the investment in education, decreasing the skill premium, raising the skills supply and social welfare. The investment in education tends to be counter-cyclical. On the one hand, forward-looking individuals anticipate the increase of demand for skills during the economic boom, increasing their investment in education during the economic recession. On the other hand, they also anticipate the maturation of the technology diffusion, reducing their investment in education during the economic boom. Finally, we show that education subsidies are Pareto-effcient, increasing welfare of both high- and low-skilled individuals. The third chapter endogenizes the technology diffusion path assumed in the first chapter. This chapter presents a two-sector growth model that explains the adoption of a skill-biased technology. There are two types of technology: low-tech and high-tech, and the latter is more productive and skill-biased. Technology is not embodied. To adopt high-technology, users must pay an instantaneous adoption cost, which decreases over time due to technology progress. Firms are homogeneous and act strategically, maximizing their profits given their rivals' behavior, leading to a technology sequential adoption pattern due to stock effects. We found that the decrease of the adoption cost and the increase of the technology knowledge due to learning effects leads to an increasing technology diffusion over time. The former has an constant effect over time, but for the latter, although positive, the effect is not constant, changing the speed of the technology diffusion over time.
This book consists of three essays that explore different aspects of innovation and new technology, namely creation, diffusion and exchange. Each study is developed as an individual paper that asks a related, yet different, research question and answers it by analyzing empirically three distinct datasets. The goal is to explore various aspects of technology in an international context, both at the country and firm level, and with a particular focus on developing nations. These countries rely heavily on technology imports and spillovers from industrialized nations, hoping however, to develop in parallel own national capabilities that will ensure good growth perspectives for the future. Geographically, the first two essays are centered on transition countries from Eastern Europe and Central Asia that provide a nice natural experiment of countries moving from centralized and autarkic economic systems to free market economies, and also increasingly open to the world's economy. The last essay is a true global analysis of diffusion via technological agreements between firms in the tire industry, a truly global segment represented in more than 90 countries worldwide.
Over the past decades, network technologies across supply chains have been introduced and promoted with the premised benefits for all participants. However industry experience with an adoption process of some technology suggests that some firms have a great amount of uncertainty in estimating the benefits of its adoption. This uncertainty will lead to a slow adoption rates across population in supply chains. In my dissertation, I develop a model to analyze technology adoption in a two-level supply chain: multiple suppliers and multiple buyers. The uncertainty about the benefits is reduced as other firms adopt the technology and information from their experiences becomes available. Thus, at any given time, the estimate of benefit for a firm depends on the number of supplier firms and number of buyer firms who have already adopted the technology. I seek to capture this dependence and analyze its effect on the adoption of technology like radio frequency identification (RFID) technology both on analytical models and empirical study. This study also investigates several important aspects of technology adoption process in supply chains. The dissertation comprises three essays focusing on these aspects in a dynamic adoption process in a two-level supply chain and diffusion of technology in inter-firm networks. I investigate how the dynamic process of uncertainty resolution and environment factors affects the firm's adoption decisions, and empirically examines the diffusion of technology in supply chain networks with several hypotheses to test insights generated from the analytical model.
`This is a good book for a general reader to understand the inter-relationship between science, technology and society and particularly the contribution made by engineers towards technology development' - Technovation This volume, a collection of 10 essays by leading practitioners from both east and west, shows how technology, which has become a major force in our lives today, is itself like a powerful engine. The creation and maintenance of this engine depends on engineers, on ideas from science, research and development, on the pressures and constraints of the market place and national security, on the skills and knowledge of manpower and on the financial resources that banks, governments and other institutions can command and provide. This book does not expound any one point of view. Rather, it tries to understand how the engine of technology works, how it is a complex system whose working is shaped by political, economic, social and cultural forces and in turn shapes them.
