Abstract:

Demand-pull (DP) and technology-push (TP) are drivers of technological change. Using a two-layer network of input-output (market) and patent citations (innovation) links among 307 6-digit US manufacturing industries in 1977-2012, I study two types of TP and DP:
(1) TP and DP are between-layer spillovers when demand shocks in the market pull innovation and innovation pushes growth in the market. (2) Within the same layer, DP arises from downstream links when output users trigger upstream growth, while TP effects spill over from up- to downstream industries.
The results support between- and within-layer TP: Innovation spillovers from upstream industries drive market growth and innovation. Within the market, positive upstream supply shocks stimulate growth, but this effect is heterogeneous across industries.
DP is not supported but shows a factor bias in favor of labor, while TP comes with a shift towards non-production work.
The results enable a nuanced view on the drivers of technological change and their impact on labor, capital, and productivity.

Citation:

Hötte, K. (2022) 'Demand-pull and technology-push: What drives the direction of technological change?--An empirical network-based approach'. arXiv preprint arXiv:2104.04813
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