The Impact of Technology Innovation on the Middle-Income Group: Heterogeneity of Technological Originality or Introduction Re-innovation

Abstract

Under the innovation-driven development strategy, technology innovation has become the core driving force of economic development and income increase. Technology innovation contains technological originality and technological introduction re-innovation, which affects technological progress bias through factor efficiency, and then influences the middle-income group. This paper constructs a theoretical model to analyze the impact mechanism of technological originality and introduction re-innovation on the middle-income group, and proposes three research hypotheses. Using data in China, the impact of the heterogeneity between technological originality and introduction re-innovation on the middle-income group is empirically tested, so as to examine comprehensively the income distribution effect of technology innovation. Research findings are as follows: technological originality improves the income distribution, i.e., technological originality encourages the technological progress towards labor to increase labor income share, and enlarges the middle-income group and makes full use of the income distribution effect of technological originality; technological introduction will not be conducive to improve the income distribution in a long term, i.e., the income distribution effect of technological introduction is limited and unremarkable; moreover, technological introduction re-innovation exacerbates the income distribution, i.e., technological introduction re-innovation encourages technological progress towards capital, and capital reversal and reverse spillover is quite serious, which restraints the expansion of the middle-income group, leading to the ineffective income distribution of technological introduction re-innovation. This paper provides a reference for the analysis of the income distribution effect of technology innovation under an innovation-driven development mode and provides specific political implications for the impact of heterogeneity of technological originality and technological introduction re-innovation on the income distribution. Therefore, on the one hand, we should increase the investment in our original technology, especially on fundamental researches and talents, to improve the level and ability in original technology. Meanwhile, we should perfect the relevant systems and mechanisms of original technology to deliver its outcomes more effectively and put its function of adjusting the income distribution in full play. On the other hand, we should continue to attract foreign investment and import advanced technology, and make sure that the introduced technology could match the local technology and resources well. At the same time, we should put emphasis on imitating the foreign advanced technology to reduce the reverse spillover effect of the introduced and recreated technology, change the situation of the poor circulation of the introduced technology, and enhance the effect of the introduced and recreated technology on the income distribution.