Council on Competitiveness

ABSTRACT Since digitalization and Industry 4.0 have been recognized as a key issue for future economic development, prosperity and wealth distribution, several studies have emerged on the potential threats of new technology on workforce development. The consensus is that jobs may fall away, while some new jobs will be created, with a different skills profile and a new set of qualifications that are required. This paper examines the effects of three main indicators: the impact of skills, industrial sector dominance and product complexity on workforce reduction. Based on metropolitan data from the US (Census) and Europe (Eurostat), the author develops a metropolitan typology based on industrial sectors in each metro and analyses the systematic relationship between regional variations of automation, local skills and economic sector variations, finding that automation exposure in Europe is significantly lower than in the US and that medium-skilled manufacturing jobs in the US are increasingly threatened and low-skill service jobs remain relatively safe from automation – leading to a decreasing middle class. This also shows how metropolitan areas are at risk of developing polarized effects: some facing economic upturn and continuous prosperity, and a majority of others either stagnant or with extreme downturn and high unemployment rates.

The article is devoted to an in-depth study of the modern factors and trends of the world trade. It provides an overview of the economic literature and development of theoretical frameworks of global trade factors. Three main factors are identified in the article, namely: (1) globalization, (2) computer revolution and ICT-technologies, and (3) China’s opening to the world. The tendencies of the international trade in the past three decades are analyzed. The main trends of world economy and trade are discussed. There is particular emphasis on the world trade reduction causes in 2015 and 2016. Special attention is paid to the changes in the US and China bilateral trade. GDP growth slowed down in both the U.S. and China during three years of their trade war. Nevertheless, despite this relative decline the United States and China remain the world’s largest importers and exporters of goods and services and the main trading partners. USA accounts for 8.8 percent of global goods exports in 2018 (second place after China with 13.1 percent) and 13.5 percent of global imports (first place; China is 11.0 percent). The author’s conclusion is as follow: the proportion between the world trade and global GDP that has been established by now should be considered as normal and optimal in terms of the global reproduction system’s functioning.

Based on the result of a survey of 1500 Russian industrial companies we not only clarified the intensity of particular innovations but also interconnections between technological and managerial innovations. We also determined the institutional factors that affect the intensity of particular innovations, i.e. presence of foreign ownership, openness of local markets to international competition and inclusion of companies into large corporations to/that foster innovations. At the same time, the rigidity of organizational structures and inertia of local production networks put serious limitation on radical product and technological innovations. The further development of Russian industries will largely depend on organizational flexibility of corporations and on increasing mutual trust within local business networks. Unter Nutzung der Ergebnisse einer Umfrage unter 1500 Industrieunternehmen werden nicht nur die Intensitat von spezifischen Innovationen, sondern auch die Zusammenhange zwischen Technologie- und Managementinnovationen nachgewiesen. Weiterhin wurden auch die institutionellen Faktoren bestimmt, die diese Innovationen beeinflussen wie das Vorhandensein auslandischen Eigentums, die Offnung des Marktes zur internationalen Konkurrenz und die Einbindung von Firmen in grose Unternehmen, um Innovationen voranzutreiben. Gleichzeitig erschweren rigide Organisationsstrukturen und lokale Produktionsnetzwerke radikale Produkt- und Technologieinnovationen immens. Die zukunftige Entwicklung der russischen Industrien wird weitgehend von der organisationellen Flexibilitat der Unternehmen und dem wachsenden gegenseitigenVertrauen innerhalb lokaler Handelsnetzwerke abhangen.

The rapid changes in technology, the changes in the national and global economy and the emergence of many new nations that acquire an increasing competence to innovate is presenting us with new issues and opportunities. In particular, it affects the innovation system of the country, namely the scientific and technological infrastructure, the workforce and the policy environment in which government, industry, and academia operates. From a sequential or serial model we are moving or have moved to a dynamic, interactive one that encompasses more stakeholders in a realtime way. Of late, the work of the Council on Competitiveness has focused on the capacity for innovation as a pre-requisite for national competitiveness. This talk will discuss the results from its report “Going Global: The New Shape of American Innovation” and its “Findings from the Innovation Index” and assess the forces that affect the future. The main conclusion will be that the changes we have and will be facing are irreversible and require the active and positive participation of the technical professional and technical institutions. It also requires new relationships between the main participants of the innovation system.