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<p>Innovation in the emerging market economies (EMEs) is complex and evolves from interaction, learning, dissemination and use and application of knowledge across the agents within the sphere of newly emerging structural changes. Associated changes, though positive, not only new and innovative but coupled with shifts in labor mobility across the sectors and firms within the economy. To understand this nexus, present study empirically examine the impact of innovation in EMEs at both aggregate and sectoral level. Innovation measured in two ways: first, direct indicators which include patents, industrial designs, trademarks applications (IPRs) and R&amp;D expenditure. Second, global production networks (GPNs) treated as an indirect indicator of innovation. In addition, the study use various knowledge spillover effects such as human capital, institutional quality, labor market adaptability and digital infrastructure to examine how innovation shapes employment dynamics. Estimates from panel feasible generalized least squares method reveals the mixed results across the aggregate and sectoral levels. Specifically, direct innovation proxies (IPRs), including R&amp;D, exhibit a negative impact on employment at the aggregate level, whereas indirect measures show a positive effect. Sectoral analysis highlights that innovation—whether direct or indirect—has a negative impact on employment in agriculture but fosters employment growth in the non-agricultural or knowledge-intensive sectors, underscoring a shift towards knowledge intensive sectors. Further, study reveals the significant role of knowledge enabling factors to promote innovation-induced employment dynamism in the EMEs.</p>

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Does Innovation Foster Employment in the Case of Emerging Market Economies? The Mediating Role of Knowledge Spillovers

  • 期刊论文

  • 发表日期：

    2026年5月21日

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  • Seenaiah Kale,
  • Bhushan Praveen Jangam,
  • Badri Narayan Rath

摘要

Innovation in the emerging market economies (EMEs) is complex and evolves from interaction, learning, dissemination and use and application of knowledge across the agents within the sphere of newly emerging structural changes. Associated changes, though positive, not only new and innovative but coupled with shifts in labor mobility across the sectors and firms within the economy. To understand this nexus, present study empirically examine the impact of innovation in EMEs at both aggregate and sectoral level. Innovation measured in two ways: first, direct indicators which include patents, industrial designs, trademarks applications (IPRs) and R&D expenditure. Second, global production networks (GPNs) treated as an indirect indicator of innovation. In addition, the study use various knowledge spillover effects such as human capital, institutional quality, labor market adaptability and digital infrastructure to examine how innovation shapes employment dynamics. Estimates from panel feasible generalized least squares method reveals the mixed results across the aggregate and sectoral levels. Specifically, direct innovation proxies (IPRs), including R&D, exhibit a negative impact on employment at the aggregate level, whereas indirect measures show a positive effect. Sectoral analysis highlights that innovation—whether direct or indirect—has a negative impact on employment in agriculture but fosters employment growth in the non-agricultural or knowledge-intensive sectors, underscoring a shift towards knowledge intensive sectors. Further, study reveals the significant role of knowledge enabling factors to promote innovation-induced employment dynamism in the EMEs.