In theory, robots can directly displace workers from performing specific tasks (displacement effect). But they can also expand labour demand through the efficiencies they bring to industrial production (productivity effect). This working paper adopts the local labour market equilibrium approach developed by Acemoglu and Restrepo to assess which effects dominate and the impact of robots on wage growth and employment rate in Europe.
The author looks at how concentrated corporate R&D is in Europe, compared with sales and employment. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. How is the EU coping with technology shifts and creating the next generation of new leading firms?