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Creative destruction and labor productivity in Polish manufacturing industries

Szczepkowska-Flis Agnieszka

Zeszyty Naukowe. Organizacja i Zarządzanie / Politechnika Śląska

2024

z. 200

483--493

Purpose: The aim of the study was to determine the impact of creative destruction on labor productivity, with the level of technology in industries as a factor modifying this impact. Design/methodology/approach: The econometric analysis was conducted for 24 manufacturing industries in Poland in 2018-2021. Employment turnover rates were used as measures of creative destruction. In modeling changes in labor productivity as a function of creative destruction, a classification of manufacturing industries into technical sectors based on the intensity of R&D was used. It was also tested whether the relationship between the examined categories has changed during the COVID-19 pandemic. Regression equations were estimated using the panel OLS. Findings: The results of the analysis showed that creative destruction had a positive impact on changes in labor productivity, but inter-industry labor reallocation was not pro-efficient. These regularities, both in terms of direction and strength of impact, did not differ during the COVID-19 pandemic. These conclusions apply only to high and medium technology industries. The lack of relationship between job creation, job destruction, labor reallocation and productivity in low-tech industries suggests that there is a threshold of R&D intensity (IR&D > 1%) required for creative destruction to play an active role in economic processes. Research limitations/implications: The categories and classification of industries used in the analysis are only approximate measures of creative destruction and technological level, so the further research is required. Especially, it is needed to confirm the thesis about the existence of a threshold of R&D intensity and the impact of creative destruction on labor productivity. Originality/value: Incorporating the level of technology as a factor modifying the impact of creative destruction on labor productivity allowed to connect two research areas: 1) the effects of technological progress on job destruction/job creation and 2) their impact on labor productivity. The regularities noted in the study may explain, at least in part, the divergent research results regarding the effects of creative destruction measured by employment turnover rates on labor productivity observed at the level of industries, sectors and regions.