Working Paper: CEPR ID: DP12695
Authors: Antonia Birkeneder; Stephan Brunow; Andrés Rodríguez-Pose
Abstract: This paper examines the link between innovation and the endowments of creative and science-oriented STEM – Science, Technology, Engineering and Mathematics – workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities ‘smarter’. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.
Keywords: innovation; creative workers; STEM workers; smart cities; spillover; Germany
JEL Codes: J24; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| employment of creative and STEM workers (J68) | firm-level innovation (O31) |
| employment of creative workers (J68) | firm-level innovation (O31) |
| employment of STEM workers (J68) | firm-level innovation (O31) |
| employment of STEM workers (J68) | regional innovation (O35) |
| employment of creative workers (J68) | innovation within the firm (O31) |