Knowledge-intensive Sectors Research Articles

R&D investments in knowledge intensive sectors in developing countries and the role of host country political uncertainty

Multinational enterprises (MNEs) persistently navigate environments characterized by political uncertainty. Yet, it is unclear how such uncertainty affects the location and sectoral spread of MNEs' overseas research and development (R&D) investments. This study delves into the influence of political uncertainty on R&D investments within knowledge‐intensive sectors, particularly in developing nations, thus enhancing our understanding of the contextual variables at play. Using a unique data set of MNE greenfield R&D global investment projects over the period 2003–2019, we show that political uncertainty has a negative effect on R&D capital investments. Additionally, we explore sector and host country location‐specific boundary conditions that moderate this relationship and find support for our hypotheses. Our findings show that MNE R&D investments in science‐based sectors (SBS) and knowledge‐intensive business services (KIBS) sectors in developing countries are less susceptible to political uncertainty compared to developed countries. Our results call for more attention from MNEs' managers and policymakers to political developments in their investing countries.

Restrictive immigration policies and MNE innovation

AbstractHigh-skill migrant workers significantly contribute to advanced economies by directly generating knowledge-intensive assets and serving as bridges to knowledge in their origin countries. However, rising populist sentiment has led to increased immigration restrictions in wealthy economies like the U.S. and the Europe Union. This study examines the impact of the 2004 H-1B visa cap reduction on U.S.-based multinational enterprises (MNEs). We use a sample of 371,856 patents assigned to 707 U.S.-based MNEs. We find that post-shock, MNEs increased the geographic dispersion of their global R&D workforce, rather than replacing foreigners with local American workers. Despite this, the firms experienced a decline in innovation performance, likely due to elevated coordination challenges. Interestingly, sectors relying more on codified knowledge demonstrated increased R&D team dispersion with less impact on innovation. This suggests that the geographic proximity of innovation teams is crucial for tacit knowledge-intensive sectors. These findings highlight the complex consequences of immigration restrictions and suggest boundary conditions on the effectiveness of work-from-anywhere models in knowledge-intensive industries.

Macroeconomic Factors and Policy Dynamics Influencing FDI Flows from Arab Countries to Malaysia: A Qualitative Analysis (2018-2023)

This study examines the macroeconomic factors and policy dynamics influencing Foreign Direct Investment (FDI) flows from Arab countries to Malaysia during the period 2018-2023. Employing a qualitative research design, the study utilizes semi-structured interviews with key stakeholders, analysis of policy documents, and examination of economic data to provide a comprehensive understanding of this evolving economic relationship. The research reveals that Malaysia's economic resilience, robust GDP growth, and effective fiscal policies have been instrumental in attracting Arab FDI, despite global challenges such as the COVID-19 pandemic. Strategic policy initiatives, including targeted FDI incentives and bilateral trade agreements, have played a crucial role in facilitating investment flows. The study identifies key sectors attracting Arab investment, including real estate, Islamic banking and finance, oil and gas, and tourism. Malaysia's position as a global hub for Islamic financial services and halal industries emerges as a significant factor in its appeal to Arab investors. However, the research also highlights persistent challenges, such as regulatory hurdles, cultural and language barriers, and increasing regional competition. The study concludes that while Malaysia has successfully positioned itself as an attractive destination for Arab FDI, continued policy refinement and focus on high-value, knowledge-intensive sectors are necessary to maintain this position. The findings contribute to the growing body of literature on South-South economic cooperation and provide valuable insights for policymakers, investors, and researchers. Future research directions, including the need for quantitative analysis and comparative studies with other Southeast Asian countries, are suggested to further enhance understanding of these complex investment dynamics.

In Search of Income Convergence and Ideal Distribution – the Case of European Union Regions

In the field of economics and regional research, income convergence between countries and regions has been analysed since the 1980s. At the beginning of the 21st century, a number of articles addressing income convergence of European Union (EU) countries were published, which was among many topics related to the accession of 12 countries to the EU between 2004 and 2007. The inspiration for this study was the variety of conclusions about convergence in various groups of EU regions. The purpose of this article is to discuss the existing knowledge on the economic convergence of the EU regions and to expand it with the research results covering the period 2000–2021. The results confirm the convergence of incomes within EU regions, which translates into a change in the geographical distribution of income in the EU, slowly blurring the boundaries between the regions of the 2004/2007 enlargement countries and the countries located in the west and south of the EU. At the same time, no convergence within most of the biggest EU countries nor regions with well-developed knowledge-intensive sectors, were recorded.

Human Capital Attraction and Retention in Cities: An Analysis in the Brazilian Context

Objective: To analyze how factors of human capital attraction and retention manifest in a Brazilian city, considering that most empirical studies on the topic focus on European, Asian, and North American contexts. Theoretical Framework: The research is grounded in concepts and theories on the role of cities in the knowledge-based, creative, and innovative economy, as well as human capital mobility, providing a solid foundation for the investigation. Method: A qualitative approach was adopted, utilizing a case study in the city of Florianópolis. Data collection involved secondary sources and 17 semi-structured interviews with qualified professionals in the technology sector, academics, and local public managers. Results and Discussion: Factors of human capital attraction and retention observed in cities of advanced countries, such as social tolerance, quality of life, entrepreneurial and innovation environment, and education, are also applicable to a Brazilian city. The factors of effective public policies and sense of community emerged as relevant. An interdependence between factors was observed, with the entrepreneurial and innovation environment being the most significant. Research Implications: This research offers theoretical and practical insights for administration and public policy, particularly for highly qualified professionals, entrepreneurs in knowledge-intensive sectors, and public managers of cities in emerging countries. Originality/Value: The study highlights how factors of human capital attraction and retention manifest in a Brazilian city, potentially guiding decisions by entrepreneurs and public managers interested in promoting local development.

Main Directions of Modern Transformation and Modernization of Russian Society, Ways to Overcome the Systemic Crisis in the Context of Technological Revolution: Alternative Strategic Development Models

At the present stage of Russia’s development in the prevailing historical conditions, a period of deep conceptual transformations has begun, measures are being taken to free it from its continued dependence on crisis global processes, from the globalism policy of developed imperialist countries. Today, after three periods of permanent systemic crisis, through which Russia went from the early 80s to the early 2000s, the country is emerging from this dependence, returning to its mental ideological and cultural foundations, to state-political, economic, scientific, technical and technological sovereignty, to the status of a world power, renewed civilization, towards the consolidation of society. This period is characterized as a period of transformation and new modernization of society. The article, based on new approaches and methods of a comprehensive historical, sociological and formational-civilizational analysis of the problems of society’s development, examines the issues of the new modernization of society that has begun, analyzes and evaluates the persistent manifestations of the systemic crisis, issues of implementing an innovative anti-crisis management strategy, strategic planning and strategic management. Possible forecasts and alternatives for social development are considered. These processes require a clear, meaningful choice and implementation of a long-term strategy for the dynamic, innovative development of knowledge-intensive sectors of the economy, labor productivity growth, production recovery based on new reindustrialization and the industrial revolution, the development and implementation of achievements of the fifth technological order, scientific, technical, technological, information revolution, the formation of new scientific, human resources, including in the areas of governance of society and the state, ensuring comprehensive security and sovereignty of society and the state, regulatory support for these processes. This implies the choice of a new socio-economic, formational and civilizational model for further progressive development, taking into account positive domestic and foreign experience, and the corresponding ideological basis for these transformations. All this is becoming an urgent issue for the entire spectrum of social and social sciences, for educational practices.

Development of oil refining and petrochemistry in the Republic of Kazakhstan according to the cluster principle

Oil and gas resources are a non-renewable type of raw material, as a result of which we can talk about their exhaustibility and limitation. The reserves explored so far are limited in volume, many de-posits are at the stage of depletion, which predetermines the need for their careful and rational re-source-saving use. The problems of integrated and rational use of natural resources in order to in-crease their efficiency and reduce the burden on the environment have acquired particular significance in environmental and economic development. Today, contradictions have arisen between limited re-source capabilities and the growing needs of society. Extracted resources are used with low utility. The remaining part is waste, which occupies significant areas; participate in the process of alienation of highly fertile lands; Due to the content of toxic compounds, they cause irreparable harm to the envi-ronment and human health. Industrial production at the present stage is developing at an accelerated pace, as a result of which the need for raw materials is constantly increasing. In conditions of resource limitations of non-renewable raw materials, which include hydrocarbons, there is an urgent need for their rational use. Taking into account the non-renewable and multi-component composition of oil and gas resources, it is necessary to focus on its rational use, aimed at the complete, economically justified extraction of all valuable components contained in it, as well as the use of recyclable materials and production waste, i.e. resource saving. All these aspects directly affect the minimization of environmental risks. The article substantiates the feasibility of the integrated use of hydrocarbon resources in the pro-cess of further development of the domestic oil and gas complex in order to increase its competitive-ness. The authors propose ways to develop petrochemical production that can produce a wide range of commercial products with high added value. The article substantiates the position that with the devel-opment of the petrochemical industry, the oil and gas complex of the republic will acquire the neces-sary stability and will be able to become not only a leading, but also a knowledge-intensive sector of the domestic economy.

A predictive model to assess the impact of human capital on the development of venture business in Russia

Subject. The article examines the impact of human capital on the development of venture business in Russia. Objectives. The study aims at modeling and evaluating the impact of improving the quality of human capital on the development of venture business through the volume of venture project outputs, and determining the dependence of the volume of venture project outputs on the volume of investments. Methods. We employed methods of regression analysis and econometric modeling, using MS Excel and Eviews10 tools, materials of the Rosstat, World Bank, Dsight, Human Development Report, Russian Venture Capital Association for 2007–2021. Results. We constructed linear and exponential models for assessing the impact of improving the quality of human capital on the development of venture business. The obtained models can be used for short-term forecasting and assessing the impact of improving the quality of human capital on the development of venture business. The paper proved that the exponential model gives a more accurate forecast. Conclusions. The development of venture business can become a breakthrough direction in the knowledge-intensive sector of the economy.

Creational and conversational AI affordances: How the new breed of chatbots is revolutionizing knowledge industries

The new generative AI (GenAI) paradigm offers unprecedented opportunities for users to tap into. AI capabilities are increasingly helpful in creative and knowledge-intensive domains that have long been considered a territory of human expertise. The new breed of chatbots is based on large language models (LLMs), and they have overcome many constraints that plague the everyday use of previous AI technologies. This article employs the theory of affordances to understand how ChatGPT facilitates (i.e., affords) and constrains (i.e., disaffords) the usefulness of a new breed of chatbots. We further divide two distinct yet interrelated dimensions of new AI affordances: creational and conversational. Via 29 interviews with professionals using ChatGPT in various creative and knowledge-intensive sectors, we identify three creational affordances (content creation and enhancement, knowledge acquisition and creativity augmentation, and task automation) and three conversational affordances (contextual sensitivity, interactive accessibility, and human-AI workflow synergy). Creational affordances refer to the system’s ability to produce novel outputs and automate routine work, whereas conversational affordances encompass the variety of interaction possibilities with an AI system. Both affordances also involve disaffordances that limit the usefulness of the new types of AI systems. Furthermore, we introduce an integrated framework that shows how creational and conversational affordances reinforce each other via meta-affordances of accessibility, accumulation, and adaptability. We illustrate our findings with practical examples and offer guidelines for using these emerging capabilities in company settings.

Роль человека в постиндустриальной экономике

Introduction. Large-scale processes of informatization development in recent decades determine the need and opportunity to reconsider the role and importance of the human in modern society, determine his place in the modern economic system, and increase his role in the activities of the organization. Theoretical analysis. A review of the main trends in the development of post-industrial economy and its characteristics as a type of society with a predominance of innovative, progressive scientific and post-industrial components in the structure of the economy and a redistribution of the employed population structure from industry to the service sector is carried out. The main factors influencing the increase in the importance of the individual (person) in an organization in the system of post-industrial economy are considered. Results. In post-industrial economy, human capital becomes the key resource, and the role of the human is undergoing significant changes under the influence of technological progress, the growth of knowledge-intensive sectors of the economy, automation and changes in the structure of production. An important factor is the ability to learn, adapt and develop skills that meet the modern requirements of post-industrial economy. The human role does not disappear, it evolves, and its ability to adapt and innovate become determining factors in the success of organizations and economic progress in the post-industrial era.

The contribution of knowledge-intensive firms to employment growth: a Granger causality approach for German regions

ABSTRACT Academic discussions have frequently examined the interrelation between regional employment growth and firm locations. Two growth patterns emerge: employment growth induced through new firm locations or vice versa, where firms locate in areas experiencing employment supply growth. The specific causal relationship responsible for regional employment growth in Germany remains uncertain. In the German context, however, more research is needed to identify contributors to employment growth, as most existing studies rely on highly aggregated data or focus on specific case studies. This paper aims to approach this subject by using a uniquely matched dataset of firm locations and the individual employment of 480 multi-locational firms in the knowledge economy and comparing it to total employment in Germany. We assume that a change in knowledge-intensive firms’ employment may affect regional employment growth. The study uses longitudinal historical employment data at the functional urban area (FUA) level from 1999 to 2019, aggregated to knowledge-intensive high-tech and advanced producer services (APS) sectors. The analysis employs aggregated and individual Granger causality tests, evaluating the relationship between employment in knowledge-intensive sectors and overall employment change. Results are spatialised using GIS to provide evidence of where the Granger causalities occur at the FUA level in Germany. Findings indicate that, in general, knowledge-intensive employment growth Granger causes total employment growth in a few economically more active FUAs. In contrast, for a greater number of FUAs, total employment Granger causes knowledge-intensive employment.

INTANGIBLE ASSETS AND THEIR IMPACT ON THE BALANCE SHEET OF IRAQI BANKS

The most significant changes in the modern business environment during the 1990s have been the increasing importance of intangible elements of knowledge, technology, individual skills, and other factors that have become the main source of wealth and income and the enhancement of the competitive advantages of the business to survive and grow. This has been accompanied by a higher market value of the business than double its book value, especially in knowledge-intensive sectors such as communications, medicines, and software. This is due to the current accounting model's inadequate treatment of intangible assets, which are recognized as assets only when purchased from third parties. The research aims to attempt to provide an accounting framework for intangible assets that avoids previous deficiencies and criticisms to increase the effectiveness of financial reporting in light of contemporary developments in the business environment by assessing the accounting treatment of intangible assets purchased in the standards issued.

On the Question of the Demand for Professional Postgraduate Studies in Russia: Analysis of Data on the Thesis Defenses in Technical Sciences

Modern Russian postgraduate school is institutionally oriented towards the reproduction of the personnel potential for science and higher education. Since the career trajectories of a significant part of PhD graduates go beyond the academic labor market, the scientific and pedagogical community is discussing the prospects for the development of the so-called professional postgraduate studies in Russia, which should provide targeted training of highly qualified personnel for knowledge-intensive sectors of the economy and the sphere of intellectual services. The discourse on professional postgraduate studies is focused on the possibility of adapting the effective practices of foreign universities, and, unfortunately, is currently not supported by quantitative data on the demand for such a format of postgraduate training in Russia. The purpose of this study is an empirical analysis of the demand for professional postgraduate studies in the field of technical sciences. Using data on PhD graduates who successfully defended dissertations in technical sciences in 2019 as an example, for the first time a quantitative assessment was made of the prevalence of practice-oriented dissertations, the authors of which are employees of organizations in the knowledge-intensive sectors of the economy. The empirical basis of the study was the publicly available data on the defense of dissertations for the degree of candidate of technical sciences in Russia in 2019 (N=1663). For a detailed analysis, dissertation materials were selected, which contained information about postgraduate studies and the place of employment of dissertators (N=715). As a result of the study, parameters were determined that characterize the degree of prevalence in Russia of practice-oriented dissertations on various disciplinary groups of technical sciences, including: the proportion of PhD graduates employed outside the academic sphere; the proportion of dissertations thematically related to the professional activities of their authors; prevalence of preparation of dissertations on the basis of enterprises of the real sector of the economy; differences in socio-demographic characteristics and publication activity of PhD graduates working on dissertations at universities and in science-intensive business organizations. On the basis of the analysis, a conclusion is made about the expediency of developing professional postgraduate programs in the field of engineering and technology aimed at staffing the innovation sphere, as well as legitimizing the special requirements for these programs and practice-oriented dissertations prepared during their implementation.

The impact of financialization on economic growth (the example of the USA and Russia)

The article reveals the contradictory impact of financialization on modern economic growth. The approaches of foreign and Russian researchers to the content of the phenomenon of financialization and the consequences of its spread for the economic growth of the national economy are systematized. The positive impact of moderate financialization (stimulating investment, including in knowledge-intensive sectors) and the negative consequences of high financialization for economic growth are highlighted. Econometric models have been constructed that assess the impact of financialization on the dynamics of real GDP in the United States and Russia. The conclusion about the negative relationship between financialization and economic growth in these countries is confirmed. It is noted that in Russia the impact of financialization on economic growth rates is more pronounced, although the indicators of financialization (the share of the financial sector in GDP) are lower than in the United States.

PSYCHOLOGICAL STRATEGIES AND ITS IMPACT ON EMPLOYEE INNOVATION AND CREATIVITY IN KNOWLEDGE INTENSIVE SECTORS

This study article investigates the relationship between psychological tactics and their impact on employee innovation and creativity in knowledge-intensive industries. To remain competitive and adapt to quickly changing markets, todays business landscape necessitates ongoing innovation and creativity. Knowledge-intensive industries, defined by their reliance on intellectual and psychological capital, require effective measures to stimulate employee innovation. This research explores the impact of several psychological methods, such as intrinsic motivation, autonomy, psychological safety, and mindfulness, on improving employee innovation and creativity. Organizations can better create interventions to cultivate a culture of innovation within knowledge-intensive sectors if they understand the interplay between these initiatives and employee outcomes.

Pharmaceutical corporate power, traditional medical knowledge, and intellectual property governance in China

In China, recent years have witnessed significant growth in the pharmaceutical industry and an acceleration in pharmaceutical innovation. As a knowledge-intensive sector, the growth of the pharmaceutical industry in China marks an increasing need for protecting the enormous amounts of money invested in research and development. Arguably, the most efficient way for industry actors to recover their investments is through granting a limited duration of exclusive IP rights for the use and production of their products. Against this backdrop, over the past decades, China has adopted a series of IP-related laws and regulatory policies in China. On this basis, corporate demands and legislative efforts in China have led us to believe that a sound IP system that is compatible with China’s development needs would necessarily help stimulate investment, facilitate technology transfer, and more importantly, allocate the rights and benefits over knowledge and resources among various stakeholders. This is because, at first sight, the IP rights approach contains an obvious solution to the problem of misappropriation or free riding by addressing the problem of non-excludability of traditional medical knowledge (TMK) and associated genetic resources. However, the real picture couldn’t be more complex and different. The analysis of this article finds that China’s existing IP systems supply a conducive context for pharmaceutical corporations to exploit the system’s full strategic potential in plundering TMK and associated genetic resources. This situation has placed local communities and other TMK holders in China at a disadvantage.

Promoting intrapreneurial behavior in banking: the role of high-performance work systems, knowledge management processes, and supervisor support

Intrapreneurship is one of the keys to survival and competitiveness for service companies in knowledge-intensive sectors such as banking. This paper analyzes the role of high-performance work systems, knowledge management processes, and supervisor support in promoting intrapreneurial behavior. The results indicate that the relationship of high-performance work systems and intrapreneurial behavior is positive and significant. However, this relationship is mediated by knowledge management processes. Supervisor support moderates the relationships between high-performance work systems and intrapreneurial behavior and between high-performance work systems and knowledge management processes. However, this moderating effect is contrary to the expected effect for the second of these relationships. These findings offer guidance for practitioners to promote intrapreneurship in service sectors, where human-related service innovations, which are central to intrapreneurship, strongly affect customer satisfaction.

Prospects and directions of digital transformation in foundry

The time of information technology determines its priorities, which are a prerequisite for building a competitive production and economy. The ubiquitous spread of digitalization is one of the basic principles of new economy, a new type of socio–economic structure that is gradually being formed in the modern world through the introduction of scientific and technological progress and innovative methods of management, intellectualization and capitalization of human knowledge, the use of advanced new information and material technologies, accelerated development of knowledge-intensive sectors of the economy, the formation of creative, efficient, rational information and material production. Currently, at large foundries with mass and large-scale production of castings, the task of automating the control of technological processes using digital control systems was solved in general. They implement algorithms for controlling technological processes of casting in closed circuits (locally). The systems under consideration allow to implement optimal control strategies and automatically perform sequences of operations (start and stop of equipment; calculation and input of metal charge; calculation of formulations, dosing and mixing of molding and core mixtures) of multi-stage periodic casting processes. Digital transformation can significantly change the established practice of foundry production (from direct control and management of technological processes to business planning and document management). The transformation will have an impact on all parameters of the enterprise: economic efficiency of production (productivity, operating costs); reliability (operational readiness); safety (number of incidents); compliance with legislative norms on ecology. The technological criterion for success of the digital transformation of foundry production will be the release of a nomenclature of castings with a minimum level of defect, commercial – the release of a nomenclature of castings in demand on the market (machine parts and mechanisms), with a minimum self-cost, which is determined by the technological level of preparation of the production and its implementation and, as a consequence, low costs and optimal quality of molds, metal and castings.

Анализ динамики развития рынков интеллектуальных товаров и услуг в российских регионах

Introduction. The development of science and technology in recent decades, the active introduction of innovations and ongoing technological changes have significantly influenced economic processes and led to the emergence of a post-industrial economic system with a predominance of the Quaternary knowledge-intensive sector of the economy. Theoretical analysis. The development of intellectual activity and the expansion of the intellectual production sphere change the quality of the economic system itself. In modern economy, the development of markets for intellectual goods and services leads to qualitative changes in traditional sectors of the economy, which makes it important to study their development dynamics. Еmpirical analysis. Based on empirical data from 85 Russian regions for 2014–2021, an integral indicator of the development level of regional markets for intellectual goods and services was calculated using nine indicators that characterize the most large-scale knowledge-intensive sectors of knowledge generation in regional economies: educational services, innovations and information technologies. Results. The dynamics of the development of regional markets for intellectual goods and services as a whole is determined, and the unevenness of their development and a high degree of differentiation are revealed. The “disconnection” of regions with a high level of development of knowledge-intensive sectors from each other hinders the formation of an even innovation space and the spread of a high-tech way of life, the effective transfer of knowledge, technology, information and economic growth in general. Conclusion. The results of the study can be used to analyze changes in the educational services market, when conducting research on the innovative and informational development of regions, predicting qualitative and quantitative trends in the development of markets for intellectual goods and services.

Productivity determinants in the service industry: differences between high and low knowledge intensive sectors

PropósitoLa industria de servicios se ha convertido en un sector importante para el crecimiento económico, particularmente en los países en desarrollo. En este contexto, el objetivo de este artículo es comparar los determinantes de la productividad entre empresas que operan en sectores de servicios de baja y alta intensidad de conocimiento (LKIS y HKIS) en Ecuador.Diseño/metodología/enfoqueUtilizamos un método de estimación de dos pasos. En primer lugar, estimamos la productividad de las empresas y, en segundo lugar, los determinantes de la productividad. Para esto, utilizamos una base de datos de panel no balanceado sobre los estados financieros de las empresas formales ecuatorianas de los años 2007 a 2018.HallazgosNuestros resultados muestran que las empresas LKIS son ligeramente más intensivas en mano de obra en comparación con las empresas HKIS. Los determinantes de la productividad son similares entre las empresas HKIS y LKIS, excepto por las exportaciones y la concentración del mercado. Las empresas HKIS son más productivas cuando el nivel de competencia es bajo, lo que indica que un mayor poder de mercado está asociado con una mayor productividad. La influencia de los impuestos sobre la productividad depende del tamaño de la empresa. Las pequeñas y medianas empresas se ven más negativamente afectadas que las grandes empresas.Implicaciones prácticasLos impuestos deben diseñarse considerando el tamaño de las empresas, ya que podrían afectar su productividad. Por lo tanto, impuestos más bajos para las pequeñas y medianas empresas pueden reducir la desigualdad entre el tamaño de las empresas. Además, el conocimiento que tienen las HKIS debe extenderse a otras empresas convirtiéndose en una externalidad positiva en lugar de una barrera de entrada.Originalidad/valorA pesar de que los determinantes de la productividad del sector servicios se han explorado recientemente, en contraste con el sector manufacturero, los determinantes individuales y contextuales están menos identificados. En este artículo utilizamos un amplio conjunto de características de las empresas que podrían afectar la productividad en las empresas de servicios.