How does general and specific human capital drive technology development in firms?

Area of Science:

• Economics
• Innovation Studies
• Human Capital Theory

Background:

• Understanding the link between human capital and firm-level technology development is crucial for economic growth.
• Existing measures of technological advancement may not fully capture firms' dynamic capabilities.
• The role of specific human capital attributes in driving technological transitions requires further investigation.

Purpose of the Study:

• To examine the association between human capital within firms and their technology development.
• To introduce and apply an objective measure of technological advancement based on shifts in technological intensity.
• To identify key human capital factors that positively influence a firm's technological trajectory.

Main Methods:

• Development of a novel, objective measure of technological advancement using firm-level transitions in economic activity.
• Utilization of a longitudinal matched employer-employee micro dataset (Quadros de Pessoal) for Portuguese private companies (2009-2015).
• Focus on manufacturing industries, analyzing technology intensity based on two-digit CAE codes.

Main Results:

• Firm-level technology development is significantly associated with human capital characteristics.
• Higher education levels positively contribute to a firm's technological advancement.
• Prior work experience within the same industry, especially when combined with STEM education, strongly predicts technology development.

Conclusions:

• Human capital is a key driver of firm-level technology development and innovation.
• The study highlights the importance of specific educational backgrounds and industry experience for technological progress.
• Findings offer valuable insights for managers and policymakers aiming to enhance firms' technological capabilities and speed of innovation.