The competitiveness of firms, the development of skills and the fourth industrial revolution

The competitiveness of firms in today's modern economy hinges on securing access to competent owners, management and staff. There are currently two structural paradigm shifts that are changing the skills that firms need and laying the foundations for what has been called the fourth industrial revolution.

First, the use of artificial intelligence and robots means that complex tasks previously performed by humans are increasingly being automated. Second, the coronavirus pandemic is changing the structure of demand and supply in many industries as well as accelerating the pace of change in business.

These trends increase the need to understand how firms and decision-makers can, and should, act in order for globally competitive Swedish companies to be part of the business sector of the future. The outcome is also largely shaped by labor market regulations, competition, immigration, tax, entrepreneurship and education policies. Evidence-based decision-making requires competent analysis and detailed facts.

To meet this need, the project brings together researchers in international economics, industrial organization, corporate finance, and labor economics. The researchers will investigate how artificial intelligence and robotics affect firms' productivity, competitiveness and human capital, as well as how these patterns differ between firm types, industries, regions and over the business cycle. The researchers will also study how corporate governance, corporate ownership, and entrepreneurship affect firms' skills development, employee compensation, and business competitiveness.

A key resource the researchers rely on in the project is extensive register-based databases at firm and individual level. The Research Institute of Industrial Economics (IFN) has built up a database that contains information on all Swedish firms over three decades. These data are linked to register information from Statistics Sweden of the entire Swedish population. This “big data” resource means that the research questions can be studied in detail in a unique way with the goal of contributing knowledge that has great potential to benefit the development of Swedish business and industry.