The impact of digitalization on the labor market, business sector and prosperity

The researchers want to investigate the impact of digital technologies on the labor market, business sector and the economy in order to identify obstacles to productivity gains and prosperity development and formulate points of departure for future structural reforms.

Sweden is at the same time a leader in the structural transformation that follows from digitalization, but also lagging behind. On the one hand, Sweden ranks high in, for example, the Eurostat Digital Economy and Society Index, DESI, but at the same time the Swedish economy is lagging behind in productivity growth compared with other countries in OECD and IMF measurements and has a pent-up need for structural reforms.

Technological development has historically led to productivity gains and increased long-term economic prosperity. However, the Swedish combination of high-tech maturity and declining prosperity development suggests that there are transition problems in the short and medium term that make it difficult to realize the long-term values of structural change.

Technical development entails a potential to organize economic activities in new ways - business models, production, sales - which in the long run leads to productivity gains. In order to realize this potential, both companies and authorities must move from one organizational state to another. This transition is associated with internal organizational obstacles as well as external regulatory and institutional frictions or restrictions, and these constitute transition problems. That such problems arise is partly due to the fact that organizational and institutional changes take place on a much longer time scale than technical development, the speed of which is unparalleled.

Entrepreneurship and innovation drive organizational and institutional change and are therefore a crucial mechanism for solving transition problems. At the societal level, entrepreneurship functions as a vital form of experimentation through which the economy is continuously developed and adapted to new conditions. This, however, requires institutional frameworks that promote entrepreneurship and innovation.

The main theme of the project, led by research leader Joakim Wernberg and Professor Johan Eklund, is to study transition problems linked to the impact of digital technologies on the future labor market, business sector and prosperity development. In this way, it will be possible to identify the need for structural reforms in the Swedish economy and formulate starting points for the necessary reform work.

The project's three main issues are:

• What are the concrete transition problems in different parts of the Swedish economy?
• How can entrepreneurship and innovation help solve these transition problems?
• What need for structural reforms is required to promote the solution of the identified transition problems?

Project:
“New Technologies, Transition Problems and Structural Change - Realising the economic potential of technology in the wake of digitalisation within a medium-term future”

Principal investigator:
Johan Eklund

Institution:
Swedish Entrepreneurship Forum 

Grant:
SEK 12 million