SBE researcher awarded Marie Curie Fellowship to study firm R&D and skills investments
For many years, productivity growth has been declining and, as we face the current COVID-19 crisis, it is likely that productivity will slow even more. To address this issue, SBE Assistant Professor Van Anh Vuong recently received a Marie Sklodowska-Curie Individual European Fellowship to investigate firm investments that improve productivity. The project will provide insights into firms’ investment incentives and the underlying mechanism of their decision-making process. These insights will help design policy measures to effectively facilitate investments and boost productivity growth.
We caught up with Van to congratulate her on winning this prestigious award and to find out a bit more about her project.
Congratulations on winning the Marie Curie Fellowship! The fellowship is among Europe's most competitive and prestigious research and innovation awards. You must be very happy.
'Yes, thank you. I am very excited about the fellowship. This is obviously a big opportunity for me and I am thrilled to get started on my research project.'
Van Anh Vuong is an Assistant Professor at SBE's department of Organisation, Strategy and Entrepreneurship. Prior to this, Van obtained her Ph.D. in Economics from Pennsylvania State University and was a Junior Professor for Applied Microeconomics at the University of Cologne.
Van Anh Vuong, Ph.D., Assistant Professor
Can you tell us about the research project you will be working on as a Marie Curie Fellow?
'In my project, I want to study firms’ decision-making process in R&D and worker skills investments in the service industries. These types of investments are one possible way to improve productivity. R&D and skilled labor force create new knowledge and technologies which make it possible to produce more output, meaning higher productivity. Given this upside of R&D and skill investments, we might expect companies to do exactly that. However, in reality, we see that not every firm conducts these investments and if they do, some firms invest heavily and others only a small amount. In my project, I want to understand how firms decide about these investments and look at how these investments change their productivity.'
Why do we care so much about productivity?
'The reason that today we can enjoy a living standard that our grandparents could not have imagined is because of the rise in productivity over time. For example, a country with a high productivity level can produce more output with its inputs compared to a country with low productivity. This “more” in output means wealth and high living standards.'
In your work, you want to look specifically at companies in the service industries. What is your motivation behind this?
'Service industries are a crucial part of the economy. In Europe for example, two-thirds of value-added and employment are coming from the service industries. In light of its economic magnitude, we know relatively little about this sector. We have studied extensively the manufacturing industries, however, the insights from there cannot be applied one to one to the service industries.'
'Firms in the service industries produce different types of products than firms in manufacturing. Take a business consultancy, for example. Its product is not a table or a car, but rather a market strategy. This means, compared to a car manufacturer, business consultancy might rely relatively more on their employees’ knowledge rather than formal R&D investment to develop a new product. This leads to firms in these two sectors to invest in different things and also benefit (in terms of productivity) from these investments differently.'
How do the results of your work benefit companies and policymakers?
'First, the insights on what is the optimal investment is of direct relevance for companies. Companies do not want to invest too little and forgo opportunities or invest too much and waste resources that can otherwise be used more profitably. Second, the project contributes to the understanding of why and how firms choose to invest a specific amount. Knowing how firms think, what incentives are important to them will be a valuable piece of information in designing policy measures that encourage investments.'
How does the Marie Curie Fellowship support your research?
'The fellowship allows me to focus my resources and work intensively on the project for the next two years at SBE and within the OSE department which have many experienced and internationally renowned scholars who work on firm investment and innovation research. Thus, the fellowship will be a tremendous help in accelerating my development as a researcher here at OSE and in the broader academic community. Also, through the generous funding, I will have the opportunity to communicate my research and findings to the wider public through a variety of channels.
Thank you very much. We wish you a successful start!
The Marie Skłodowska-Curie actions support researchers at all stages of their careers, regardless of age and nationality. Researchers working across all disciplines are eligible for funding. The MSCA also support cooperation between industry and academia and innovative training to enhance employability and career development. Find out more.