“Digitalisation” and “Greening” as Components of Technology Upgrading and Sustainable Economic Performance

Randolph Bruno (), Monika Matusiak, Kirill Osaulenko and Slavo Radosevic
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Monika Matusiak: European Commission, Joint Research Centre, 41092 Seville, Spain
Kirill Osaulenko: School of Slavonic and East European Studies, University College London, 16 Taviton Street, London WC1H 0BW, UK

Sustainability, 2023, vol. 15, issue 3, 1-29

Abstract: This paper explores the pace and direction of technological development by using a technology upgrade conceptual and measurement framework. This approach is applied to a sample of 164 economies worldwide between 2002 and 2019. Within the framework of technology upgrading, the paper focuses on digitalisation and “greening” as its two significant structural features. We explore their relationship with different components of technology upgrading and the relationship between technology upgrading components and different indicators of macroeconomic productivity. We have adopted a longitudinal fixed effects regression method with control for unobserved heterogeneity, clustered standard errors, and time dummies. Our results show that the growth of research and development (R&D) capabilities does not translate into aggregate productivity growth. There is a lack of unconditional relationship between aggregate productivity growth, digitalisation and greening. However, there are “latecomer advantages” to basic digitalisation for lower middle- and low-income economies and “latecomer liabilities” in the greening of the economy for upper-middle-income economies. In addition, levels of digitalisation and greening do not correlate, suggesting these two transformation processes are not yet integrated into ‘ICT-assisted greening’. When we control for income levels, the impact of components of technology upgrading on productivity is isolated to specific components and significant only for some income groups. The absence of a significant simultaneous effects of several components of technology upgrading on productivity points to large transformation failures. We conclude that the role of science and technology systems in spurring sustainable development would require a broad scope for science and technology (S&T) policies, their coordination, and integration with non-innovation policies.

Keywords: digitalization; “greening”; technology upgrading; technology transfer; catching-up economies; labour productivity; total factor productivity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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