Technological Innovation and Employment: Intersectoral Appraisals of Structural Change in the Service Economy

Abstract

This chapter analyses the structural change of employment in services in Europe and Spain over the last three decades and provides a framework to understand the effects of technological change and innovation in the economic system. For this purpose, in the first two sections, the extension of structural change in services’ employment and the direction of that change are examined, focusing on the industrial technological intensities. Considering that technological change and innovation in services is driven less by direct R&D, and more by acquired investment, in the third section, the ‘total embodiment of technology and innovation’ in services is analysed. In the fourth section, we examine whether the expansion in market services employment is associated with the pattern of final demand or with an increase in intermediate demand of services, thus, to system changes. In order to demonstrate the results presented in the third and fourth sections, an inter-industry analysis is applied to input output data which was homogenised for this research. This methodological approach enables us to connect intersectoral relations in the economic subsystems that are not obvious in aggregated industrial analysis. The results show, in general, an increased dependence on market services by the economic system and, in particular, by the industrial and high technology production subsystem.

Keywords: Services, Technological Change, Innovation, European Economy

JEL Classification: C67, C68, D57, E12, E24, L80, L90