Technological advances and industrial characteristics:Some evidence from developed and developing countries

The need of technological advances for competitiveness is rather well known. However, the structural impacts of technological improvements on unemployment remain largely unexplored in the existing literature. The paper analyses the complex interlinkages among technological adaptation, labour productivity gains and scale expansion. It highlights the two opposing effects of technological improvements and labour productivity on employment. The paper demonstrates the role of scale expansion both through the logic and empirical findings. It is argued that to achieve positive employment effects of technological modernization, via productivity gains and scale expansion, a greater degree of global trade and investment integration is needed. It also highlights the need for strengthening labour productivity and wage rate linkages to simultaneously address the supply and demand side effects of technology on economic growth. In nutshell, the paper argues for building on the new growth theories. Extremely useful comments and suggestions from the Editor and anonymous referees are gratefully acknowledged. However, the usual disclaimer applies.