The Role of R&D Investments on Labor Force: The Case of Selected Developed Countries

  • Halim BaşEmail author
  • İsmail Canöz
Part of the Contributions to Management Science book series (MANAGEMENT SC.)


Whether the change in R&D spending creates technological unemployment, in particular, is a controversial issue. Acceptance of this hypothesis might not be possible under all circumstances. At this point, especially if country-based research is conducted, it might be the right choice to consider the countries with the highest R&D expenditure. This study empirically analyses the role of R&D spending on unemployment by using annual data from 1996 to 2017 of 15 developed countries. In empirical results, it was first determined that there is no co-integration between the ratio of R&D expenditures to GDP and the unemployment rate. Therefore, an attempt was made to determine the existence of a hidden co-integration among the shocks of these variables. The direction of asymmetric causality among them was investigated as a result of the detection of findings that is evidence of hidden co-integration. Although there is an otherwise observation, asymmetric causality analysis results predominantly show that there is causality from R&D expenditures to unemployment.


  1. Acemoglu, D. (2010). When does labor scarcity encourage innovation? Journal of Political Economy, 118(6), 1037–1078.CrossRefGoogle Scholar
  2. Acemoglu, D., & Autor, D. (2011). Skills, tasks and technologies: Implications for employment and earnings. In Handbook of labor economics (Vol. 4, pp. 1043–1171). New York: Elsevier.Google Scholar
  3. Acemoğlu, D., & Restrepo, P. (2016). The race between machines and humans: Implications for growth, factor shares and jobs. Retrieved 6, 2019.Google Scholar
  4. Acemoglu, D., & Restrepo, P. (2017a). Robots and jobs: Evidence from US labor markets.Google Scholar
  5. Acemoglu, D., & Restrepo, P. (2017b). Secular stagnation? The effect of aging on economic growth in the age of automation. American Economic Review, 107(5), 174–179.CrossRefGoogle Scholar
  6. Acemoglu, D., & Restrepo, P. (2018a). The race between man and machine: Implications of technology for growth, factor shares, and employment. American Economic Review, 108(6), 1488–1542.CrossRefGoogle Scholar
  7. Acemoglu, D., & Restrepo, P. (2018b). Artificial intelligence, automation and work (No. w24196). National Bureau of Economic Research.Google Scholar
  8. Agovino, M., Aldieri, L., Garofalo, A., & Vinci, C. P. (2018). R&D spillovers and employment: Evidence from European patent data. Empirica, 45(2), 247–260.CrossRefGoogle Scholar
  9. Aguilera, A., & Ramos Barrera, M. G. (2016). Technological unemployment: An approximation to the Latin American case. AD-minister, 29, 58–78.Google Scholar
  10. Akcali, B. Y., & Sismanoglu, E. (2015). Innovation and the effect of research and development (R&D) expenditure on growth in some developing and developed countries. Procedia-Social and Behavioral Sciences, 195, 768–775.CrossRefGoogle Scholar
  11. Ansal, H. K., & Cetindamar Karaomerlioglu, D. (1999). New technologies and employment: Industry and firm level evidence from Turkey. New Technology, Work and Employment, 14(2), 82–99.CrossRefGoogle Scholar
  12. Arntz, M., Gregory, T., & Zierahn, U. (2016). The risk of automation for jobs in OECD countries: A comparative analysis.Google Scholar
  13. Asongu, S. A. (2013). How would population growth affect investment in the future? Asymmetric panel causality evidence for Africa. African Development Review, 25(1), 14–29.CrossRefGoogle Scholar
  14. Autor, D. H. (2015). Why are there still so many jobs? The history and future of workplace automation. Journal of Economic Perspectives, 29(3), 3–30.CrossRefGoogle Scholar
  15. Autor, D. H., Levy, F., & Murnane, R. J. (2003). The skill content of recent technological change: An empirical exploration. The Quarterly Journal of Economics, 118(4), 1279–1333.CrossRefGoogle Scholar
  16. Azagra-Caro, J. M., Tijssen, R. J., Tur, E. M., & Yegros-Yegros, A. (2019). University-industry scientific production and the great recession. Technological Forecasting and Social Change, 139, 210–220.CrossRefGoogle Scholar
  17. Barlow, M. (2016). AI and medicine: Data-driven strategies for improving healthcare and saving lives.Google Scholar
  18. Barnhizer, D. (2016, January 15). The future of work: Apps, artificial intelligence, automation and androids. Artificial Intelligence, Automation and Androids. Cleveland-Marshall Legal Studies Paper, 289.Google Scholar
  19. Bessen, J. E. (2016). How computer automation affects occupations: Technology, jobs, and skills. Boston University School of Law, Law and Economics Research Paper, 15–49.Google Scholar
  20. Bogliacino, F., & Vivarelli, M. (2010). The job creation effect of R&D expenditures. IEB Working Paper 2010/55.Google Scholar
  21. Bogliacino, F., Piva, M., & Vivarelli, M. (2014). Technology and employment: The job creation effect of business R&D. Rivista Internazionale di Scienze Sociali, 126, 239–264.Google Scholar
  22. Brouwer, E., Kleinknecht, A., & Reijnen, J. O. (1993). Employment growth and innovation at the firm level. Journal of Evolutionary Economics, 3(2), 153–159.CrossRefGoogle Scholar
  23. Bruun, E. P., & Duka, A. (2018). Artificial intelligence, jobs and the future of work: Racing with the machines. Basic Income Studies, 13(2), 1–15.CrossRefGoogle Scholar
  24. Brynjolfsson, E., & Mitchell, T. (2017). What can machine learning do? Workforce implications. Science, 358(6370), 1530–1534.CrossRefGoogle Scholar
  25. Brynjolfsson, E., McAfee, A., & Spence, M. (2014). New world order: Labor, capital, and ideas in the power law economy. Foreign Affairs, 93(4), 44–53.Google Scholar
  26. Bustinza, O. F., Gomes, E., Vendrell-Herrero, F., & Baines, T. (2019). Product–service innovation and performance: The role of collaborative partnerships and R&D intensity. R&D Management, 49(1), 33–45.CrossRefGoogle Scholar
  27. Calvino, F., & Virgillito, M. E. (2018). The innovation-employment nexus: A critical survey of theory and empirics. Journal of Economic Surveys, 32(1), 83–117.CrossRefGoogle Scholar
  28. Campa, R. (2017). Technological unemployment: A brief history of an idea. ISA eSymposium for Sociology, 7(1), 57.Google Scholar
  29. Chomanski, B. (2019). Massive technological unemployment without redistribution: A case for cautious optimism. Science and Engineering Ethics, 25(5), 1389–1407.CrossRefGoogle Scholar
  30. Ciriaci, D., Moncada-Paternò-Castello, P., & Voigt, P. (2016). Innovation and job creation: A sustainable relation? Eurasian Business Review, 6(2), 189–213.CrossRefGoogle Scholar
  31. Cirillo, V. (2017). Technology, employment and skills. Economics of Innovation and New Technology, 26(8), 734–754.CrossRefGoogle Scholar
  32. Clausen, T. H. (2009). Do subsidies have positive impacts on R&D and innovation activities at the firm level? Structural Change and Economic Dynamics, 20(4), 239–253.CrossRefGoogle Scholar
  33. Coad, A., & Rao, R. (2010). Firm growth and R&D expenditure. Economics of Innovation and New Technology, 19(2), 127–145.CrossRefGoogle Scholar
  34. Crespi, G., & Tacsir, E. (2011, September). Effects of innovation on employment in Latin America. In 2011 Atlanta Conference on Science and Innovation Policy (pp. 1–11). IEEE.Google Scholar
  35. Dankert, C. E. (1959). Technological change and unemployment. Lab. LJ, 10, 393.Google Scholar
  36. Darcy, A. M., Louie, A. K., & Roberts, L. W. (2016). Machine learning and the profession of medicine. JAMA, 315(6), 551–552.CrossRefGoogle Scholar
  37. David, P. A., Hall, B. H., & Toole, A. A. (2000). Is public R&D a complement or substitute for private R&D? A review of the econometric evidence. Research Policy, 29(4–5), 497–529.CrossRefGoogle Scholar
  38. Dinçer, H., Yüksel, S., & Pınarbaşı, F. (2020). Kano-based measurement of customer expectations in retail service industry using IT2 DEMATEL-QUALIFLEX. In Handbook of research on positive organizational behavior for improved workplace performance (pp. 349–370). Hershey, PA: IGI Global.CrossRefGoogle Scholar
  39. Ernst, E., Merola, R., & Samaan, D. (2019). Economics of artificial intelligence: Implications for the future of work. IZA Journal of Labor Policy, 9(1), 7.CrossRefGoogle Scholar
  40. Ersin, İ., & Ergeç, E. H. (2018). Harcama Bileşenleri ve Sektörel İstihdam Arasındaki Nedensellik İlişkisi. Yönetim ve Ekonomi Araştırmaları Dergisi, 16(1), 161–180.CrossRefGoogle Scholar
  41. Eti, S., Kalkavan, H., Dinçer, H., & Yüksel, S. (2020). Predicting the role of Islamic banking on sustainable economic development: An analysis for Turkey with ARIMA model. In Handbook of research on creating sustainable value in the global economy (pp. 146–164). Hershey, PA: IGI Global.CrossRefGoogle Scholar
  42. Feldmann, H. (2013). Technological unemployment in industrial countries. Journal of Evolutionary Economics, 23(5), 1099–1126.CrossRefGoogle Scholar
  43. Frey, C. B., & Osborne, M. A. (2017). The future of employment: How susceptible are jobs to computerisation? Technological Forecasting and Social Change, 114, 254–280.CrossRefGoogle Scholar
  44. Gajewska, K. (2014). Technological unemployment but still a lot of work: Towards prosumerist services of general interest. Journal of Evolution and Technology, 24(1), 104–112.Google Scholar
  45. Gera, I., & Singh, S. (2019). A critique of economic literature on technology and fourth industrial revolution: Employment and the nature of jobs. The Indian Journal of Labour Economics, 62(4), 715–729.CrossRefGoogle Scholar
  46. Gerçeker, M., Özmen, İ., & Mucuk, M. (2019). AR-GE harcamalari ve işsizlik arasindaki nedenselliğin ampirik analizi: G7 ülkeleri örneği. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 41(2), 413–431.Google Scholar
  47. Granger, C. W., & Yoon, G. (2002). Hidden cointegration. University of California, Economics Working Paper, 2002-02.Google Scholar
  48. Gregory, T. E. (1930). Rationalisation and technological unemployment. The Economic Journal, 40(160), 551–567.CrossRefGoogle Scholar
  49. Guerrero, M., Cunningham, J. A., & Urbano, D. (2015). Economic impact of entrepreneurial universities’ activities: An exploratory study of the United Kingdom. Research Policy, 44(3), 748–764.CrossRefGoogle Scholar
  50. Haile, G., Srour, I., & Vivarelli, M. (2017). Imported technology and manufacturing employment in Ethiopia. Eurasian Business Review, 7(1), 1–23.CrossRefGoogle Scholar
  51. Hall, B. H. (1992). Investment and research and development at the firm level: Does the source of financing matter? (No. w4096). National Bureau of Economic Research.Google Scholar
  52. Hatemi-J, A. (2011). Asymmetric panel causality tests with an application to the impact of fiscal policy on economic performance in Scandinavia. Munich, Germany: University Library of Munich.Google Scholar
  53. Hatemi-J, A. (2018). Hidden panel cointegration. Journal of King Saud University-Science, 32, 507–510.CrossRefGoogle Scholar
  54. Hatemi-J, A., Gupta, R., Ksango, A., Mboweni, T., & Netshitenzhe, N. (2014). Are there asymmetric causal relationships between tourism and economic growth in a panel of G-7 countries. University of Pretoria, Department of Economics Working Paper, 76, p. 18.Google Scholar
  55. Heijs, J. (2003). Freerider behaviour and the public finance of R&D activities in enterprises: The case of the Spanish low interest credits for R&D. Research Policy, 32(3), 445–461.CrossRefGoogle Scholar
  56. Heijs, J., & Herrera Danny, L. (2004). The distribution of R&D subsidies and its effect on the final outcome of innovation policy.Google Scholar
  57. Hirschi, A. (2018). The fourth industrial revolution: Issues and implications for career research and practice. The Career Development Quarterly, 66(3), 192–204.CrossRefGoogle Scholar
  58. Ipsos. (2020). Global views on jobs and automation. Retrieved January 28, 2020, from
  59. Kähler, A. (1935). The problem of verifying the theory of technological unemployment. Social Research, 2, 439–460.Google Scholar
  60. Kalkavan, H., & Ersin, I. (2019). Determination of factors affecting the south east Asian crisis of 1997 probit-logit panel regression: The south east Asian crisis. In Handbook of research on global issues in financial communication and investment decision making (pp. 148–167). Hershey, PA: IGI Global.Google Scholar
  61. Kapeliushnikov, R. (2019). The phantom of technological unemployment. Russian Journal of Economics, 5(1), 88–116.CrossRefGoogle Scholar
  62. Kim, T. W., & Scheller-Wolf, A. (2019). Technological unemployment, meaning in life, purpose of business, and the future of stakeholders. Journal of Business Ethics, 160(2), 319–337.CrossRefGoogle Scholar
  63. Kirchhoff, B. A., Newbert, S. L., Hasan, I., & Armington, C. (2007). The influence of University R&D Expenditures on new business formations and employment growth. Entrepreneurship Theory and Practice, 31(4), 543–559.CrossRefGoogle Scholar
  64. Kliman, A. J. (1997). Technological disemployment in the neoclassical model. Review of Political Economy, 9(1), 37–49.CrossRefGoogle Scholar
  65. Korinek, A., & Stiglitz, J. E. (2017). Artificial intelligence and its implications for income distribution and unemployment (No. w24174). National Bureau of Economic Research.Google Scholar
  66. Krousie, C. (2018). Technological unemployment in the United States: A state-level analysis. Major Themes in Economics, 20(1), 87–101.Google Scholar
  67. Kwon, S. J., Park, E., Ohm, J. Y., & Yoo, K. (2015). Innovation activities and the creation of new employment: An empirical assessment of South Korea’s manufacturing industry. Social Science Information, 54(3), 354–368.CrossRefGoogle Scholar
  68. Lachenmaier, S., & Rottmann, H. (2011). Effects of innovation on employment: A dynamic panel analysis. International Journal of Industrial Organization, 29(2), 210–220.CrossRefGoogle Scholar
  69. Li, X., & Tan, Y. (2019). University R&D activities and firm innovations. Finance Research Letters, 28, 328–336.CrossRefGoogle Scholar
  70. Li, G., Hou, Y., & Wu, A. (2017). Fourth industrial revolution: Technological drivers, impacts and coping methods. Chinese Geographical Science, 27(4), 626–637.CrossRefGoogle Scholar
  71. Link, A. N. (2000). Assessing the economic impacts of university R&D and identifying roles for technology transfer officers. Industry and Higher Education, 14(1), 24–32.CrossRefGoogle Scholar
  72. Lloyd, C., & Payne, J. (2019). Rethinking country effects: Robotics, AI and work futures in Norway and the UK. New Technology, Work and Employment, 34(3), 208–225.CrossRefGoogle Scholar
  73. Manning, A. (2004). We can work it out: The impact of technological change on the demand for low-skill workers. Scottish Journal of Political Economy, 51(5), 581–608.CrossRefGoogle Scholar
  74. Marchant, G. E., Stevens, Y. A., & Hennessy, J. M. (2014). Technology, unemployment & policy options: Navigating the transition to a better world. Journal of Evolution and Technology, 24(1), 26–44.Google Scholar
  75. Martin, F. (1998). The economic impact of Canadian university R&D. Research Policy, 27(7), 677–687.CrossRefGoogle Scholar
  76. Matuzeviciute, K., Butkus, M., & Karaliute, A. (2017). Do technological innovations affect unemployment? Some empirical evidence from European countries. Economies, 5(4), 48.CrossRefGoogle Scholar
  77. Medda, G., Piga, C., & Siegel, D. S. (2004). University R&D and firm productivity: Evidence from Italy. The Journal of Technology Transfer, 30(1–2), 199–205.CrossRefGoogle Scholar
  78. Mokyr, J., Vickers, C., & Ziebarth, N. L. (2015). The history of technological anxiety and the future of economic growth: Is this time different? Journal of Economic Perspectives, 29(3), 31–50.CrossRefGoogle Scholar
  79. Naastepad, C. W. M., & Houghton Budd, C. (2019). Preventing technological unemployment by widening our understanding of capital and Progress: Making robots work for us. Ethics and Social Welfare, 13(2), 115–132.CrossRefGoogle Scholar
  80. Naastepad, C. W. M., & Mulder, J. M. (2018). Robots and us: Towards an economics of the ‘good life’. Review of Social Economy, 76(3), 302–334.CrossRefGoogle Scholar
  81. Neisser, H. P. (1942). Permanent “technological unemployment:” demand for commodities is not demand for labor. The American Economic Review, 50–71.Google Scholar
  82. Novak, V., & Dizdarevic, D. (2018). The future of work in the light of technological change. International Journal of Economics and Law, 8(23), 127–136.Google Scholar
  83. Oberdabernig, D.A. (2016). Employment effects of innovation in developing countries: A summary, Swiss Programme for research on global issues for development, Swiss Programme for Research on Global Issues for Development R4D Working Paper, 2016/2.Google Scholar
  84. OECD. (2012). Main science and technology indicators. OECD Publishing.Google Scholar
  85. Pajarinen, M., Rouvinen, P., & Ekeland, A. (2015). Computerization threatens one-third of Finnish and Norwegian employment. Etla Brief, 34, 1–8.Google Scholar
  86. Pastor, J. M., Pérez, F., & De Guevara, J. F. (2013). Measuring the local economic impact of universities: An approach that considers uncertainty. Higher Education, 65(5), 539–564.CrossRefGoogle Scholar
  87. Peters, M. A. (2017). Technological unemployment: Educating for the fourth industrial revolution. Journal of Self-Governance and Management Economics, 5(1), 25–33.CrossRefGoogle Scholar
  88. Peters, M. A. (2019). Beyond technological unemployment: The future of work. Educational Philosophy and Theory.
  89. Peters, M. A., & Jandrić, P. (2019). Posthumanism, open ontologies and bio-digital becoming: Response to Luciano Floridi’s Onlife Manifesto.Google Scholar
  90. Piva, M., & Vivarelli, M. (2005). Innovation and employment: Evidence from Italian microdata. Journal of Economics, 86(1), 65–83.CrossRefGoogle Scholar
  91. Piva, M., & Vivarelli, M. (2017). Is R&D Good for Employment? Microeconometric Evidence from the EU (No. 10581). IZA Discussion Papers.Google Scholar
  92. Postel-Vinay, F. (2002). The dynamics of technological unemployment. International Economic Review, 43(3), 737–760.CrossRefGoogle Scholar
  93. Pwc. (2017). The economic impact of artificial intelligence on the UK economy. Retrieved January 28, 2020, from
  94. Roessner, D., Bond, J., Okubo, S., & Planting, M. (2013). The economic impact of licensed commercialized inventions originating in university research. Research Policy, 42(1), 23–34.CrossRefGoogle Scholar
  95. Sanchez, D. (2019, June). Sustainable development challenges and risks of industry 4.0: A literature review. In 2019 Global IoT Summit (GIoTS) (pp. 1–6). IEEE.Google Scholar
  96. Scheinkman, M. (2019). Intimacies: An integrative multicultural framework for couple therapy. Family Process, 58(3), 550–568.CrossRefGoogle Scholar
  97. Schwab, K. (2016). Dördüncü sanayi devrimi. Istanbul: Optimist Yayın Grubu.Google Scholar
  98. Spencer, D. A. (2018). Fear and hope in an age of mass automation: Debating the future of work. New Technology, Work and Employment, 33(1), 1–12.CrossRefGoogle Scholar
  99. Standing, G. (1984). The notion of technological unemployment. International Labour Review, 123, 127.Google Scholar
  100. Stiglitz, J. E. (2014). Unemployment and innovation (No. w20670). National Bureau of Economic Research.Google Scholar
  101. Susskind, D. (2017). A model of technological unemployment. Economics Series Working Papers, 819.Google Scholar
  102. Tamayo, M. P., & Huergo, E. (2016). The effect of R&D services offshoring on skilled employment: Firm evidence. The World Economy, 39(9), 1414–1433.CrossRefGoogle Scholar
  103. Taşçı, F. (2010). Yaşlılara yönelik sosyal politikalar: İsveç, Almanya, İngiltere ve İtalya örnekleri. Çalışma ve Toplum, 1, 175–202.Google Scholar
  104. Taşçı, F. (2013). Refah devleti modelleri içinde Türkiye’nin pozisyonu:“yaşlı algısı” üzerinden değerlendirmeler. İnsan & Toplum Dergisi, 3(5), 5–35.CrossRefGoogle Scholar
  105. Van Roy, V., Vértesy, D., & Vivarelli, M. (2018). Technology and employment: Mass unemployment or job creation? Empirical evidence from European patenting firms. Research Policy, 47(9), 1762–1776.CrossRefGoogle Scholar
  106. Vivarelli, M. (2012). Entrepreneurship in advanced and developing countries: A microeconomic perspective. ISO 690. IZA discussion paper no. 6513.Google Scholar
  107. Vivarelli, M. (2014). Innovation, employment and skills in advanced and developing countries: A survey of economic literature. Journal of Economic Issues, 48(1), 123–154.CrossRefGoogle Scholar
  108. Wajcman, J. (2017). Automation: Is it really different this time? The British Journal of Sociology, 68(1), 119–127.CrossRefGoogle Scholar
  109. Walker, M. (2014). BIG and technological unemployment: Chicken little versus the economists. Journal of Evolution and Technology, 24(1), 5–25.Google Scholar
  110. Woodward, D., Figueiredo, O., & Guimaraes, P. (2006). Beyond the Silicon Valley: University R&D and high-technology location. Journal of Urban Economics, 60(1), 15–32.CrossRefGoogle Scholar
  111. Xu, M., David, J. M., & Kim, S. H. (2018). The fourth industrial revolution: Opportunities and challenges. International Journal of Financial Research, 9(2), 90–95.CrossRefGoogle Scholar
  112. Zhang, G., Zhou, S., Xia, X., Yüksel, S., Baş, H., & Dincer, H. (2020). Strategic mapping of youth unemployment with interval-valued intuitionistic hesitant fuzzy DEMATEL based on 2-tuple linguistic values. IEEE Access, 8, 25706–25721.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Vocational School of Social SciencesIstanbul Medipol UniversityKadıköy/İstanbulTurkey
  2. 2.Faculty of Political SciencesIstanbul Medeniyet UniversityKadıköy/İstanbulTurkey

Personalised recommendations