On October 4, 2017, 13.00-14.00, Prof. Simone Vannuccini (FSU Jena) will give a talk on “The Compositional Nature of the Productivity and Innovation Slowdown” (joint with Uwe Cantner, Holger Graf and Ekaterina Prytkova).
A growing number of studies identify a generalized slowdown in labor productivity growth. The very existence of the slowdown ignited a series of academic debates suggesting that secular stagnation or ‘mismeasurement’ problems are at the root of the observed trends. We posit that the composition of aggregate productivity matters. In a nutshell, we make the analysis of productivity growth slowdown more fine–grained by shifting the focus to the industry level, considering that the downward trend identified at the macroeconomic level emerges from the aggregation of diverse industry–level productivity trends. We perform an analysis of the structural dynamics of labor productivity by conducting a non–parametric dynamic decomposition exercise that separates within (improvement) and between (structural change) effects for 10 OECD countries. By pooling industries in groups identified according to two different taxonomies — one related to R&D intensities rankings, and the other built upon the Pavitt taxonomy of sources of technological change —, this study assesses industry–level contributions to the slowdown. We interpret our findings highlighting common patterns and suggest that one of the possible explanations for the productivity slowdown may lie inside the technological (supply–side) domain, when a generalized exhaustion of technological opportunities takes place.
Keywords: productivity slowdown; decomposition; industrial dynamics; innovation.