scholarly journals Has Creative Destruction become more Destructive?

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
John Komlos
Keyword(s):  
Public Choice ◽  
New Technologies ◽  
Value Added ◽  
Economic Cost ◽  
Creative Destruction ◽  
Capitalist Development ◽  
Economic Progress ◽  
The Impact ◽  
Net Value Added ◽  
Industrial Revolutions

Abstract: Schumpeter’s concept of creative destruction as the engine of capitalist development is well-known. However, that the destructive part of creative destruction is a social and economic cost and therefore biases our estimate of the impact of the innovation on GDP is hardly acknowledged, with the notable exception of Witt (1996. “Innovations, Externalities and the Problem of Economic Progress.” Public Choice 89:113–30). Admittedly, during the First and Second Industrial Revolutions the magnitude of the destructive component of innovation was no doubt small compared to the net value added to GDP. However, we conjecture that recently the destructive component of innovations has increased relative to the size of the creative component as the new technologies are often creating products which are close substitutes for the ones they replace whose value depreciates substantially in the process of destruction. Consequently, the contribution of recent innovations to GDP is likely upwardly biased. This note calls for further research in innovation economics in order to measure and decompose the effects of innovations into their creative and destructive components in order to provide improved estimates of their contribution to GDP and to employment.

scholarly journals Has Schumpeterian Creative Destruction become more destructive?

2016 ◽  
Vol 3 (1) ◽  
pp. 9
Author(s):  
John Komlos
Keyword(s):  
New Technologies ◽  
Value Added ◽  
Economic Cost ◽  
Creative Destruction ◽  
Capitalist Development ◽  
The Impact ◽  
Net Value Added ◽  
Industrial Revolutions

<p align="justify">Schumpeter’s concept of creative destruction as the engine of capitalist development is well-known. However, that the destructive part of creative destruction is a social and economic cost and therefore biases our estimate of the impact of the innovation on GDP is hardly acknowledged, with the notable exception of Witt (1996). Admittedly, during the First and Second Industrial Revolutions the magnitude of the destructive component of innovation was no doubt small compared to the net value added to employment or GDP.</p><p align="justify">However, we conjecture that recently the new technologies are often creating products which are close substitutes for the ones they replace whose value depreciates substantially in the process of destruction. Consequently, the contribution of recent innovations to GDP is likely upwardly biased. This note calls for further research in innovation economics in order to measure and decompose the effects of innovations into their creative and destructive portions in order to provide improved estimates of their contribution to GDP or to employment.</p>

scholarly journals The impact of LFA payments on FADN farms in the Czech Republic

2008 ◽  
Vol 54 (No. 10) ◽  
pp. 489-497 ◽  
Author(s):  
M. Štolbová ◽  
T. Hlavsa
Keyword(s):  
Czech Republic ◽  
Current System ◽  
Value Added ◽  
Farm Income ◽  
Family Farm ◽  
The Czech Republic ◽  
Data Network ◽  
Farm Accountancy Data Network ◽  
The Impact ◽  
Net Value Added

This paper analyses the impact of the LFA payments on farms economic results on the basis of the Farm Accountancy Data Network in the Czech Republic. Firstly, the approaches are compared to the structure of farms based on the LFA type. Secondly, the share of the LFA payments on economic results of farms is evaluated. The evaluation considers the LFA type, share of grassland, size of the eligible area of farms. Basic economic indicators are being monitored, such as Gross Farm Income, Farm Net Value Added, Family Farm Income, current subsidies, of which in particular the LFA payments. The share of the LFA payments in economic results of agricultural holdings is compared. As a result of the analysis, the winners and losers of the current system were defined.

scholarly journals Common Agriculture Police in the EU, direct payments, solvency and income

2020 ◽  
Vol 80 (4) ◽  
pp. 529-547 ◽  
Author(s):  
Emmanuel Mamatzakis ◽  
Christos Staikouras
Keyword(s):  
Financial Crisis ◽  
Value Added ◽  
Economic Recovery ◽  
Content Type ◽  
Recovery Plan ◽  
European Economic ◽  
Direct Payments ◽  
The Impact ◽  
Net Value Added ◽  
The Eu

PurposeCommon Agriculture Police in the EU, direct payments, solvency and incomeDesign/methodology/approachWe employ agriculture data for all twenty-eight EU Member States. The data comes from the public Farm Accountancy Data Network (FADN) of the EU. In terms of methodology we employ panel regression and panel Vector Autoregression analysis (panel VAR) to take into account possible endogeneity issues.FindingsThe reported panel regressions, impulse response functions (IRFs) and variance decompositions (VDCs) show that agriculture income has been subdued due to negative shocks in direct payments and solvency. Our results do not support the hypothesis that higher direct payments would increase agriculture income. In addition, whilst solvency subdues agriculture income, investment asserts a positive impact on agriculture income.Research limitations/implicationsFurther research on the impact of direct payments of CAP on EU agriculture is warranted at a disaggregate level so as to examine whether there is variability in the underlying interlinkages at regional levelPractical implicationsAs a policy implication, and in light of the ongoing reform of the EU's CAP, we would propose to raise net value added in agriculture using targeted income support to small and medium-sized farms. The European Economic Recovery Plan (EERP) would be also supportive. In addition, further enhancing financial integration across the EU would provide funds for investment in agriculture.Social implicationsAs social implication, one would propose to raise investment in agriculture, that is through the European Economic Recovery Plan (EERP). The EERP is designed as a stimulus package set up to mitigate the consequences of the global financial crisis in the EU. Also, a way to boost agriculture income is through the credit channel of the on-going quantitative easing of the ECB, where unconventional monetary policy is aiming to support the growth prospect of the Euro area.Originality/valueThis study examines the impact of direct payments, which include all subsidies, of the EU's Common Agriculture Policy (CAP) on agriculture income as measured by the net value added. We also control for solvency. Despite the magnitude of CAP on the EU budget, few studies investigate the impact of direct payments on income in the aftermath of the financial crisis. This is surprising given the importance of agriculture for the economic recovery of the EU that remains anaemic more than a decade after the crisis.

scholarly journals Impact of New Technologies on the Labor Market: Past Lessons and New Challenges

2020 ◽  
Vol 15 (4) ◽  
pp. 62-87
Keyword(s):  
Labor Market ◽  
Industrial Revolution ◽  
New Technologies ◽  
Working Hours ◽  
Developed Countries ◽  
Employment Services ◽  
Standard Set ◽  
Expert Community ◽  
The Impact ◽  
Industrial Revolutions

The article is devoted to the review of theoretical and applied studies on the impact of technological progress on the labor market and public policy. Firstly, the influence of previous industrial revolutions is considered. It is shown that new technologies during the last two centuries have been resulting in growth of employment and reduction of working hours. In addition, mass computerization observed in the past few decades has led to polarization of the labor market. Secondly, the concept of the Fourth Industrial Revolution is analyzed. It is pointed out that, despite active discussion of this topic in the mass media and in the expert community, so far the results of the former have been limited and the latest technologies related to it are poorly distributed even in the most developed countries. However, studies devoted to quantitative estimates of automation and labor substitution have a highly controversial methodology. As a result, the majority of alarmist predictions are deemed unfounded. Various studies have indicated that the more likely response to the new technological revolution is not an increase in unemployment, but rather a spread of non-standard employment. Finally, changes in government labor market policy due to technological innovations of recent years are investigated. Despite the persistent intentions to reform the fundamental labor market policies, European employment services continue to apply a standard set of practices. The data available for Russia indicate that the risks of automation and significant changes on the labor market are even lower than in developed countries.

scholarly journals Barriers to the development of SMEs in the Slovak Republic

2017 ◽  
Vol 8 (2) ◽  
pp. 255 ◽  
Author(s):  
Eva Ivanová
Keyword(s):  
New Technologies ◽  
Slovak Republic ◽  
Small And Medium Enterprises ◽  
Value Added ◽  
Business Environment ◽  
Bank Loans ◽  
The European Union ◽  
Chi Square ◽  
External Sources ◽  
The Impact

Research background: SMEs make up an important segment of the economic system, not only in the national economy, but also throughout the EU, and their importance continues to grow. SMEs in Slovakia, according to the latest data of the European Commission, represent 99.9 per cent of all enterprises, constitute 70.7 per cent of jobs, and 61.2 per cent of value added in the economy. However, they are often confronted with market imperfections. SMEs frequently have difficulties in obtaining capital or credit, particularly in the early start-up phase. Their restricted resources may also reduce access to new technologies or innovation. Authors often deal with the impact of SME financing on their development. Madrid-Guijarro et al. (2016), Lee et al. (2015) claim that SMEs have difficulty in funding innovation and the worsening in general credit conditions has been more pronounced for non-innovative firms.Purpose of the article: The main objective of the conducted research was to analyze the conditions for the development of small and medium enterprises (the SMEs sector) in Slovak Republic, whereas the specific objectives were: (1) to determine the terms for gaining external sources of financing for the development of SMEs, (2) to examine the resources for innovation development in the SMEs sector, (3) to find out if SMEs are considered to be a competitive advantage.Methods: The research was conducted in the Slovak Republic in 2016. Participants were 193 Slovak companies that were classified as SMEs by the size class of employment. The research tool used for the study was the own questionnaire consisting of 38 questions and the demographics. The structure of the questionnaire allowed the authors to identify the group of questions concerning the most important conditions for the development of the examined sector referring to the business environment. The results were processed by chi-square method.Findings & Value added: On the basis of the conducted research of the sector of SMEs , it can be concluded that a large group of companies have difficult access to external sources of financing and this refers both to the access to the European Union funds, grants, bank loans and other instruments of the financial market. However, it occurs that: (1) in Slovakia, the smaller the enterprise, i.e. the fewer employees it hires, the easier the access to external sources of financing, (1) innovative projects are realized from company profits or a loan, (1) problems in Slovakia in accessing external funds due to the complexity of the process of approval of applications and documents and strict criteria for the assessment of financial capacity.

scholarly journals New technologies` impact on workforce and labor law

2022 ◽  
Vol 25 ◽  
pp. 75-90
Author(s):  
Jessica Bayón Pérez ◽  
Andrés J. Arenas Falótico ◽  
José Lominchar
Keyword(s):  
New Technologies ◽  
18Th Century ◽  
Labor Law ◽  
Digital Transformation ◽  
Global Perspective ◽  
Decent Work ◽  
Production Models ◽  
The Impact ◽  
Industrial Revolutions ◽  
The Way

If we look back, evaluating the last two centuries, the productive environments of our societies have experienced several industrial revolutions that caused great changes in production and that, in turn, generated important changes in societies at all times. Likewise, the digital transformation that has been incorporated into the bases of companies, each one in its measure, has not yet reached its maximum potential, but it has changed the way we live and, therefore, the way we work. Historically, automation has come from the hand of specialization, not because of the manufacture of tractors the land has been stopped, but more has been produced and that production has been managed in favor of employment and economic health. Technological transformations hand in hand with digitalization and artificial intelligence generate opportunities, but they also represent a threat to a good part of traditional jobs and professions, since changes are rapid and the impact of new technologies is much greater; thus, the change in the training and qualification of workers is necessary. Like the looms in the 18th century and the production models at the beginning of the 20th, digital transformation is our present, but it will be much more powerful in the future, as it entails and will entail a redefinition of the labor market and the law that governs it. regulates. Globalization and technological changes have generated a need to address labor law from a global perspective; Furthermore, this right must not only be active, but also effective, solid, in accordance with international decent work standards.

scholarly journals Global Production Networks, New Trade Technologies and the Challenge for International Institutions

2020 ◽  
Vol 55 (1) ◽  
pp. 21-41
Author(s):  
Richard Pomfret
Keyword(s):  
International Trade ◽  
New Technologies ◽  
Value Added ◽  
Information And Communications Technology ◽  
Policy Implications ◽  
Production Networks ◽  
Global Production Networks ◽  
Goods And Services ◽  
International Transactions ◽  
The Impact

In the twenty-first century, production processes and international trade in goods and services are being revolutionized by developments in information and communications technology. For many products, global production networks have rendered the label Made in Country X meaningless. With an increasing number of services, both for end-users and as inputs, being provided online, it becomes increasingly difficult to locate where value-added is being produced. This article seeks to document the impact of new technologies on international trade and to analyse the policy implications at the national and global level. A turning point is identified in the mid-1990s; up to 1995 there is no statistically significant relationship between internet usage and trade, but after 1997 the relationship is statistically significant. Use of the internet reduced trade costs, increased the size of trade flows and permitted greater fragmentation along global value chains. It also created opportunities for new international transactions, for example, based on ‘big data’. The article concludes with analysis of attempts to reach WTO agreements with respect to e-commerce and digitalization and of alternative fora in which these issues are being addressed, and relates the outcomes to the phenomenon of mega-regionalism. JEL Codes: F02, F68, 038

scholarly journals Sustainable Investment—A Solution to Reduce Environmental Footprint

Energies ◽  
2021 ◽  
Vol 14 (11) ◽  
pp. 3104
Author(s):  
Kęstutis Biekša ◽  
Aurelija Zonienė ◽  
Violeta Valiulė
Keyword(s):  
New Technologies ◽  
Natural Capital ◽  
Value Added ◽  
Economic Indicators ◽  
Electricity Production ◽  
Solar Pv ◽  
Environmental Footprint ◽  
Sustainable Solutions ◽  
Sustainable Investment ◽  
The Impact

The environmental footprint (EF) indicator has emerged as a tool to measure human demand for productive land and water and it is used for the evaluation of the impact of products or economic activities on the environment. There are many indicators that are used in the decision making for the investment in the power sector, however, predominant are the economic indicators which underestimate the depreciation of natural capital (environment) and the value added generated by the public services. Many research studies have been carried out in an attempt to demonstrate the versatility of the EF by extending its applicability not only to environmental assessment, but also to use it, among other economic indicators, when assessing sustainable investment. Sustainable investment (SI) combines fundamental analysis and engagement with an evaluation of environmental, social and corporate governance (ESG) factors. The purpose of this article is, upon evaluating the EF, to identify the opportunities for the EF reduction through sustainable investment in the electricity production sector in EU countries. Environmental footprint analysis has been performed by using sustainable process index program SPIonExcel (SPI), which is one of the methods in the EF family. SPI is a useful tool for assessing ecological problems and finding sustainable solutions in the life cycle of energy production process. This research has revealed that the function of the footprint reduction depends directly on investments in renewable energy source (RES) technologies, but not all investments can be sustainable. Countries mainly invest in the development of wind energy and solar PV technologies and gradually reduce their inland production capacities from fossil fuel. Although SI in RES technologies reduces the EF, this is not enough to reduce it substantially because there are limitations for installing new power capacities. Consequently, countries tend to invest in the development of electricity networks. The conclusion can be drawn as follows: the reduction of the EF of electricity could be achieved by developing RES technologies since the major part of electricity is produced by using non-renewable resources. It is essential to develop new technologies as soon as possible in order to reduce EF as much as possible, and this can only be achieved through systematic sustainable investment.

The dynamics of Silicon Valley: Creative destruction and the evolution of the innovation habitat

2013 ◽  
Vol 52 (4) ◽  
pp. 539-557 ◽  
Author(s):  
Doug Henton ◽  
Kim Held
Keyword(s):  
New Technologies ◽  
Social Innovation ◽  
Service Providers ◽  
Silicon Valley ◽  
Creative Destruction ◽  
Lessons Learned ◽  
Venture Capitalists ◽  
Institutional Infrastructure ◽  
Boom And Bust ◽  
The Impact

Understanding the dynamics of Silicon Valley requires a deep appreciation of the impact of creative destruction on a resilient innovation habitat: a complex ecosystem of relationships among entrepreneurs, researchers, venture capitalists, service providers, lawyers, accountants and marketing professionals that is constantly shape-shifting. As a modern Proteus, Silicon Valley has initiated and weathered successive boom–bust cycles by constantly adapting its social and institutional infrastructure to new technologies and market forces, and leveraging these foundations in the next wave. Joseph Schumpeter, who is credited with the notion of ‘creative destruction’, saw capitalism as a ‘process of industrial mutation … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one’ (Schumpeter, 1942: 83). For over half a century, Silicon Valley has been a model for continual creative destruction. Carlota Perez has taken Schumpeter’s theory to the next level by demonstrating how technological revolutions driven by creative destruction result in not only redefined industries but also redefined industrial infrastructures and economic institutions (Perez, 2002). This article provides a framework for analyzing the dynamics of Silicon Valley based on the perspectives of both Schumpeter and Perez, and describes how the region continues to evolve as a social innovation habitat that supports the diversity of changing technologies and converging industry clusters. Whether this can be replicated by other economic regions is discussed, with key lessons learned from the Silicon Valley experience and how they might be applied to other places. We argue that regions must accept creative destruction as a natural process of boom and bust, and adapt and apply technologies during these cycles that are important and vital to the specific region. Each region does not have to strive to be Silicon Valley, but instead should build on its strengths and invest in innovation infrastructure and human capital in order to become its own Silicon Valley.

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