Demand-pull, technology-push, and the direction of technological change

This paper studies the impact of Demand-pull (DP) and Technology-push (TP) on growth, innovation, and the factor bias of technological change in a two-layer network of input-output (market) and patent citation (innovation) links among 307 6-digit US manufacturing industries in 1977-2012. Two types of TP and DP are distinguished: (1) DP and TP are between-layer spillovers when market demand shocks pull innovation and innovation pushes market growth. (2) Within-layer DP arises if downstream users trigger upstream innovation and 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, upstream supply shocks stimulate growth, but this effect differs across industries. DP is not supported but shows a factor bias favoring labor, while TP comes with a shift towards non-production work. The results are strongest after the 2000s and shed light on the drivers of recent technological change and its factor bias.

Automated summary

This paper examines the influence of Demand-pull (DP) and Technology-push (TP) on growth, innovation, and factor bias of technological change. By studying a two-layer network of input-output (market) and patent citation (innovation) links among 307 6-digit US manufacturing industries from 1977 to 2012, two types of DP and TP are distinguished. The results support the existence of between-and within-layer TP, with innovation spillovers from upstream industries driving market growth and innovation. DP is not supported, but a factor bias favoring labor is observed, while TP leads to an increase in non-production work. The findings are most significant after the 2000s and shed light on the drivers of recent technological change and its factor bias.