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1. Trade, Jobs and Technological Change: What to Expect in the Next Five Years?

Author:
Lucian Cernat
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief explores the intertwined effects of trade and technological change (notably robotics and AI) on employment, highlighting a growing divergence between the number of jobs supported by exports and the declining labour intensity of exports in recent years. The decline in labour intensity may be sharply accelerated by the rise of robotics and the automation of routine tasks, displacing workers in manufacturing and logistics while enhancing productivity. For many countries that have a strong dependence on the trade-jobs nexus, the historically declining labour intensity of exports combined with the rapid adoption of robotics in key economic sectors, will mean that industries could now rely on fewer workers for their exporting activities. This dual shock suggests that, in the future, the number of jobs that depend on trade may decline. The convergence of these forces may lead to certain sectors or regions bearing the brunt of such potential labour disruptions. To address these challenges, supporting policies will be required to mitigate these adverse effects.
Topic:
Globalization, Science and Technology, Digital Economy, Trade, and Artificial Intelligence
Political Geography:
Global Focus

2. Has Globalisation Really Peaked for Europe?

Author:
Lucian Cernat
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This paper builds on the recent arguments put forward by Richard Baldwin and others debunking the myth that we enter a period of de-globalisation. The paper argues that globalisation is a complex phenomenon that requires detailed, firm-level indicators going beyond simple aggregate metrics. When using such indicators, the picture is much more nuanced and, in the case of Europe, the role of global trade is as important as ever for hundreds of thousands of companies and millions of jobs supported by global trade flows. A strong participation in the “new globalisation” is also key for the future EU competitiveness in technology-driven sectors.
Topic:
Globalization, International Trade and Finance, Science and Technology, European Union, and Trade
Political Geography:
Europe

3. We Need to Talk Trade and Technology!

Author:
Lucian Cernat
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
“It’s May 3, 2021. Don’t forget to upgrade the embedded software in your shoes before you go for a run!” This may sound like a commercial for the 1986 Puma Smart Sneaker[1], the first running shoe with embedded sensors and software in its heel. It could also be an opening line from an old sci-fi movie describing a distant point in the future. Sci-fi movies have a great track record of predicting the future, from video calls[2] to self-driving cars[3]. The former is a dominant part of our daily professional routine these days. The latter is no longer science fiction[4]. So, what if the growing interplay between goods and services is not about the future but a good description of the present? Nowadays we live in a world of connected objects that rely on sophisticated embedded software. Recently, the Volkswagen’s CEO[5] admitted that the only way for VW to remain a successful car manufacturer is to become a successful software company. And while he may be the latest CEO to recognise the business irrelevance of such a goods-services distinction, he certainly is not the only one. Apple understood it well before many other companies when designing mobile phones and their underlying software ecosystem without having any production facilities. Now Apple wants to produce cars[6]. And so do several Chinese telecom giants, like ZTE[7] or Huawei[8]. And the list is longer: Amazon, Tencent, Google, Baidu. All these corporate announcements are another way of saying that mode 5 services[9] are going to be one of the most important ingredients of global competitiveness in many sectors. Car companies are right to get interested in software. Future autonomous and electric vehicles are primarily software-driven products compared to traditional cars. Already in 2010, the General Motors’ Volt car[10] was dubbed as one of the most sophisticated IT products, with over 10 million lines of software code and its own IP address. So, in the future, car manufacturers might need to do software in order to produce cars successfully. Surely, along complex global supply chains with many suppliers scattered around the world. These headline announcements from global manufacturing companies entering the software market and vice-versa, confirm a simple truth: in order to stay competitive, companies can no longer see themselves just as a manufacturing firm, or a services firm. And this simple truth goes beyond the automotive sector. Underpinning this radical shift is a series of digital disruptive technologies, affecting everything from product standards, industrial design, intellectual property, and investment decisions. Such technological developments are game changers for many traditional manufacturing sectors.
Topic:
Science and Technology, European Union, Digital Economy, and Trade
Political Geography:
Europe

4. From SMEs to Unicorns: What Role for Trade, Standards and New Tech?

Author:
Lucian Cernat
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The global economy has been shaped by important, disruptive technological changes in recent years. Many of these technologies have been instrumental in our global COVID-19 response and will become the new normal. Some of these technologies have been introduced by small firms, which grew spectacularly to become ‘unicorns’, with very high market value and global reach, setting new technological standards in their sectors. The future competitiveness of the EU economy depends on the interplay between firm size, technological progress and ability to use the opportunities offered by global markets. This paper looks at the role of trade policy in influencing this complex interplay and offers a few tentative conclusions and recommendations.
Topic:
Science and Technology, European Union, Economy, Trade, and COVID-19
Political Geography:
Europe and Global Focus