NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Caroline Paunov

OECD
2, rue André Pascal
75 775 Paris Cedex 16
France

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Institutional Affiliation: OECD

NBER Working Papers and Publications

November 2017Digital Innovation and the Distribution of Income
with Dominique Guellec: w23987
Income inequalities have increased in most OECD countries over the past decades; particularly the income share of the top 1%. In this paper we argue that the growing importance of digital innovation – new products and processes based on software code and data – has increased market rents, which benefit disproportionately the top income groups. In line with Schumpeter’s vision, digital innovation gives rise to ”winner-take-all” market structures, characterized by higher market power and risk than was the case in the previous economy of tangible products. The cause for these new market structures is digital non-rivalry, which allows for massive economies of scale and reduces costs of innovation. The latter stimulates higher rates of creative destruction, leading to higher risk as only margin...
March 2017Digital Innovation and the Distribution of Income
with Dominique Guellec
in Measuring and Accounting for Innovation in the 21st Century, Carol Corrado, Jonathan Haskel, Javier Miranda, and Daniel Sichel, organizers
 
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