Measuring process innovation outputs and understanding their implications for firms and workers: Evidence from Pakistan
August 01, 2024
This study proposes and constructs five quantitative metrics of process innovation output and delves into the factors influencing firms' decision to engage in process innovation and their success in achieving innovation outputs.
Main inducers: Breadth and depth of innovative capabilities; knowledge network embeddedness; extent and nature of competition.
Returns: Engaging in process innovation leads to immediate economic returns, boosting labor productivity and facilitating business expansion.
Adopting new processes leads to automation, but the study does not find evidence that new processes led to lower employment.
Access the full article by Dr. Waqar Wadho and Dr. Azam Chaudhry, Lahore School of Economics here.
Labels: apparel, Cost-reduction, Developing countries, Dr. Azam Chaudhry, Innovation, Labor productivity, Lahore School, Pakistan, Process innovation, Technology, Textiles
posted by S A J Shirazi @ 8/01/2024 10:03:00 AM,
Measuring process innovation outputs and understanding their implications for firms and workers: Evidence from Pakistan
June 23, 2024
Abstract
New processes significantly affect firms and workers; however, due to a lack of quantitative indicators, our understanding of the measures, determinants, and impacts of new processes remains limited. Drawing on unique data from Pakistan, we analyzed five different measures of process innovation output: cost reductions, defect rate reductions, reductions in production cycle time, increases in production capacity, and improvement in product quality. We find that the breadth and depth of innovative capabilities, level of competition, and availability of market sources of knowledge are important inducers of process innovation and that smaller firms are more likely to introduce new processes and are better able to transform them into higher output. All five process innovation outputs are associated with higher labor productivity and higher sales. We do not find that adopting new processes led to labor displacement; however, there is suggestive evidence that new processes led to the increased employment of skilled workers.
JEL Classification: O31, O32, O33, J23, J24
Read here
Labels: Cost-reduction, Developing countries, Dr. Azam Chaudhry, Innovation, Labor productivity, Pakistan, Process innovation, Technology, Textiles & Apparel
posted by S A J Shirazi @ 6/23/2024 12:56:00 PM,
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