2024/27 | LEM Working Paper Series | ||||||||||||||||
![]() |
|||||||||||||||||
Two halves don't make a whole: instability and idleness emerging from the co-evolution of the production and innovation processes |
|||||||||||||||||
Patrick Llerena, Corentin Lobet and Andre' Lorentz |
|||||||||||||||||
Keywords | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
Production Theory; Firm Theory; Agent-based model; Idleness; Innovation; Fund-flow
|
|||||||||||||||||
JEL Classifications | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
D21, D24, D83, J24, L25, O31, O33
|
|||||||||||||||||
Abstract | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
We propose a disaggregated representation of production using an
agent-based fund-flow model that emphasizes inefficiencies, such as
factor idleness and production instability, and allows us to explore
their emergence through simulations. The model incorporates
productivity dynamics (learning and depreciation) and is extended with
time-saving process innovations. Specifically, we assume workers
possess inherent creativity that flourishes during idle periods. The
firm, rather than laying off idle workers, is assumed to harness this
potential by involving them in the innovation process. Results show
that a firm's organizational and managerial decisions, the temporal
structure of the production system, the degree of workers' learning
and forgetting, and the pace of innovation are critical factors
influencing production efficiency in both the short and long term. The
co-evolution of production and innovation processes emerges in our
model through the two-sided effects of idleness: the loss of skills
through forgetting and the deflection of time from the production of
goods to the production of ideas giving birth to idleness-driven
innovations. In doing so, it allows us to question the status of
labour as an adjustment variable in a productive organisation. The
paper concludes by discussing potential solutions to this issue and
suggesting avenues for future research.
|
Downloads
|
![]() ![]() |
|
![]()
|
![]() |