Intelligent technologies and productivity spillovers: Evidence from the Fourth Industrial Revolution

The take-off of a Fourth Industrial Revolution (4IR) is at the core of a vibrant academic debate with an increasingly larger number of studies investigating the effects of the latest generation of new technologies, namely artificial intelligence (AI), flexible automation, additive manufacturing, big data, etc., — hereinafter defined as intelligent technologies. A great deal of attention has been paid to the effects associated with the adoption of such transformative technologies, whilst the impact associated with their production, and in particular with the development of related technological knowledge, has remained almost unexplored. Using patent data at country level for a sample of industrialized economies between 1990 and 2014, this paper seeks to quantify the productivity spillovers associated with intelligent technologies. We show that the elasticity of aggregate productivity to the stock of knowledge related to intelligent technologies is statistically significant and economically important, ranging between 0.01 and 0.06. Since these innovations have increased by a factor of 3 from the early 1990s, based on our most conservative estimates, knowledge related to intelligent technologies would account for a range between 3 and 8% of observed productivity change. We also document that the time pattern of productivity spillovers associated with intelligent technology patents may conform to a productivity J-curve, corroborating the view that such innovations could behave as General Purpose Technologies (GPTs).