Multi-region Economic Growth And Technical Innovation Diffusion:Policy Simulation System Development And Its Application

With environmental problems in terms of global climate change revealing especially in recent year, and even more seriously is that global economic growth is facing the severe challenges. Thus, proactive initiatives have been taken to promote technology innovation and diffusion to optimize and upgrade the industrial structure, and implement energy conservation and emission reduction, which have become the focus of attention in countries around the globe. In this context, based on the Geo-computation technology, making in-depth discussions on the impact of technology innovation and diffusion on regional economic growth and the transfer of carbon emissions would be of great theoretical and practical significance regarding the field of Geo-computation.Using the method of Geo-computation, this paper designs and develops the policy simulation system in terms of multi-region economic growth and technical innovation diffusion, and then applys the system to explore the evolution of regional industrial structure (ERIS) and emissions embodied in trade (EET). Our main innovative points are as follows:Firstly, based on the theory of evolutionary economics as well as through introducing the method of agent-based simulation (ABS), evolutionary analysis are used to combine and integrate firm behavior in terms of technology innovation and diffusion at the micro-scale and the ERIS as well as EET at the macro-scale, this paper conducts a new analytical framework used to further explore the impact of large sets of heterogeneous firms’behavior on the ERIS and EET, which performs two purposes:First, it tries to explain and demonstrate the ERIS is driven by the lots of heterogeneous firms’behavior in the development of industrial structure, thus providing decision-making basis for stakeholders to clarify dynamic mechanism in terms of ERIS and promote regional economic development. Second, it also tries to reveal the underlying mechanisms in terms of EET by analyzing the impact of technology innovation and diffusion on the national transfer of carbon emissions, thus providing an important policy basis for policy-makers to reduce the effects of trade. Secondly, on the methods, from the perspective of software engineering, we develop and design the policy simulation system in terms of multi-region economic growth and technical innovation diffusion based on the system requirement analysis, system logic design, system design detail and system implementation, and the conduct the related policy simulation analysis, which would be of important for stakeholders to formulated the related policy.Specifically, this article builds macro-industrial evolution model and the transfer model of carbon emissions with endogenous innovative mechanisms and micro-enterprise basis to explore the process of industrial evolution and the transfer of carbon emissions across the regions promoted by technological innovation and diffusion. In general, the bottom-up approach is adopted in our model structure, which is divided into two levels, including the regional economic structure evolution at the macro level and the firms" behavior changes at the micro level driven by technological innovation and diffusion. Moreover, macroeconomic fluctuation, regional economic growth and the transfer of carbon emissions are driven by changes of enterprises’behavior. Furthermore, based on the development pattern of technology innovation proposed by Schumpeter, the paper divides technological innovation into product innovation and process innovation in our model, and then kinds of firms’innovation behaviors are described in detail like how these behaviors promote the cross-sectors and cross-regional flow of product factors and resources and lead to the changes in the macro-economic structure as well as transfer of carbon emissions.In addition, by using the simulation system designed in the above sections, the paper conducts relevant policy analysis. Firstly, this article performs the non-numerical simulation analysis on the impact of technology innovation and diffusion on national industrial structure and the transfer of carbon emissions, particularly for the effects of firms’technology innovation types, the scale of product innovation and the scale of process innovation on output concentration ratio, employment concentration ratio, concentration ratio of emissions embodied in exports and emissions embodied in imports as well as the optimization and upgrading of the industrial structure within regions or countries. Secondly, based on the simulation system, the paper further explores the related policy scenario analysis regarding the influence of technology innovation and diffusion on the ERIS and EET. The major findings are as follows.Under the process innovation scenario, the output shares of primary industry and tertiary industry in most countries presented a downward trend, and then their shares of employment also have fallen. However, enterprise only carry out the product innovation, the output shares of primary industry and tertiary industry are rising, and the output share of secondary industry show the declining trend. In addition, the combined effects of the process innovation and product innovation significantly are conducive for the developing countries to give great impetus to transformation and upgrading of industrial structure. For the developed countries, particularly for manufacturing industry and heavy industry in secondary industry, the combined effects significantly decrease the output share of secondary industry in the whole national economy, and may increase its share of employment to some extent.Furthermore, notably, however, compared to the process innovation, the combined effects of the process innovation and product innovation are more beneficial to promote national industrial structure moving towards the expected direction (i.e. increase the output share of secondary industry and tertiary industry in the whole national economy). Moreover, under the product innovation scenario, for these regions and countries, the increment of growth and the corresponding growth rate in the transfer of carbon emissions both decline in a certain extent. Actually, as for most countries, the combined effects of the process innovation and product innovation have a certain effect on reducing the impact of trade on carbon emissions. Specific to see, on one hand, through improving production process flow and increasing energy efficiency, the combined effects would significantly reduce each sector’s CO2 emissions per unit of output in one region. On the other hand, it also can improve the level of production technology to accelerate the optimization and upgrade of the industry structure, which further changes regional industrial structure from relatively inefficient and energy-hungry industries to relatively high efficient and low-carbon industries to improve exports and imports product structure of the industrial trade. Therefore, the combined effect of the process innovation and product innovation can effectively reduce the transfer of carbon emissions in all countries and regions. In terms of policy, carry out technology innovation, particularly for introducing the process innovation and product innovation should be an effective method to reduce the transfer of carbon emissions resulted from the regional trade on the responsibilities for CO2 emissions reduction, which deserves paying much more attention.Moreover, by comparing the simulated results and the actual data from Energy Information Administration (E1A) in USA, the hybrid innovation pattern is much fitter for the trend of global economic developments. Therefore, this article further explore the influence of the hybrid innovation pattern on the ERIS and EET. The results showed that the drops in the output and employment share of primary industry in most countries are both evident, and the output and employment share of primary industry and tertiary industry tend to rise. Certainly, the extent of increased varies in different regions, taking USA for example, with the rapid adjustment of industrial structure, the employment share of primary industry in the whole economy has been on the rise to a certain extent. Meanwhile, research also shows that the hybrid innovation pattern should is helpful for adjusting industrial structure moving towards enhancing the share of secondary industry and tertiary industry and promoting national economic development. Furthermore, from the perspective of the transfer of carbon emissions, while regional economic development is driven by the hybrid innovation pattern, the volume of the transfer of carbon emissions continue to increase, which means that the trend in terms of the geographic separation of consumers and the pollution emitted during the production of consumable items may be increasing significantly. Additionally, specifically, for China, USA, Russia and EU, the emissions embodied in exports reveal a trend of gradual decrease, and the emissions embodied in imports keep rising. However, as for Japan and India, the former tend to increase and the latter declines significantly.In terms of the impacts of geo-economics, with the development of regional economic evolution, American’s geopolitical dominance may have been further strengthened, while through establishing the Asian Infrastructure Investment Bank (AIIB) and putting forward new economic policy, China’s financial industry would been obtained to some extent. Notably, however, facing complex and fierce competition from the financial industry of US and EU, China should pay more attention. Moreover, as for Japan, from the economic interests, its position should be different from that of US and EU in the process of global economic integration.Finally, the conclusion and discussion of this paper is given. On the basis of the whole article’s conclusion, some improvement suggestions are presented at the end of our paper, such as the difference of structural changes in the regional final demand, models on how to build firm’s behavior rules, further compare and analyze the differences between the simulated data and the actual data as well as explore in detail the impact of technology innovation and diffusion on each sector’s changes in the transfer of carbon emissions throughout various regions.