Innovation, Digitization and Structural Change

Innovation, Digitization & Structural Change

Traditionally, technological change is always well ahead of social change—and both are typically far ahead of governmental regulatory action to manage such change. Think of online privacy laws, for instance. This section of EconPol aims to help policymakers and other decision-makers keep abreast of this most rapidly changing field, with artificial intelligence, extreme automation, and big data all poised to have major effects on economic growth and the society at large. The need for upskilling and reskilling of the workforce is a major topic as well.

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Focus on Critical Key Technologies: The Race for Leadership in Industry and Technology Policy


Oliver Falck and Svenja Falk

Measures to promote technological sovereignty vary greatly from country to country and range from the promotion of R&D activities to subsidies for the construction of industrial plants. Systematic forecasting of technology trends would enable policy makers to deal with new technologies at an early stage and adapt policies and institutions.

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EU Innovation Policy: How to Escape the Middle Technology Trap

Clemens Fuest, Daniel Gros, Philipp-Leo Mengel, Giorgio Presidente, and Jean Tirole

The EU is losing the global innovation race. EU industry invests less than its peers in R&D, it lags way behind in software and artificial intelligence, and its pharmaceutical component is at risk. For over 20 years the same companies, mostly from the automotive sector, have dominated EU innovation activity. 

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Pandemics, Payments and Fiscal Policy: Lessons from Four Years after the Outbreak of Covid-19


Gerome Wolf

The outbreak of an unprecedented global health crisis about four years ago put the very foundations of our communities, economies and politics to the test. Policymakers had to learn and react fast to limit human and economic costs at the same time. This article highlights the importance of existing markets, technological features such as payments systems and economic decisions at the transactional level in combating the spread of a contagious disease while stabilizing aggregate economic activity.

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Watts Next: Securing Europe’s Energy and Competitiveness

Where the EU’s Energy Policy Should Go Now

Frédéric Gonand, Pedro Linares, Andreas Löschel, David Newbery, Karen Pittel, Julio Saavedra, Georg Zachmann

Russia’s invasion of Ukraine in February 2022 led to gas supply in Europe dropping significantly, shaking the EU out of its complacency regarding energy procurement and consumption habits. The costs of going green on top of more expensive energy are putting a strain on European competitiveness, with higher energy prices hitting the chemical, steel and metal processing industries in countries like Germany, Spain or Poland particularly hard.

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Reconfiguration of Supply Chains: What Are the Priorities of German Firms?

Cevat Giray Aksoy, Andreas Baur, Lisandra Flach, and Beata Javorcik

While eight out of ten German manufacturing firms reported material shortages at the height of the pandemic in December 2021, this share had fallen to 18 percent in October 2023. Nonetheless, the recent attacks by the Yemeni Houthi rebels on container ships in the Red Sea highlight the fact that supply chain risks remain significant.

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