Population Size, Market Size, and Digital Technology Innovation

Abstract

The digital economy has become an important driving force for global economic development, and competition among countries around the world in the field of the digital economy is becoming increasingly fierce. Given that digital technology and digital economy have obvious economies of scale effects, population size and market size are of special importance for digital technology innovation. Based on the panel data of OECD and BRICS countries from 1996 to 2020, this paper empirically examines the impact of population size and market size on digital technology innovation using the fixed effect model. The results show that: market size will have a significant positive impact on digital technology innovation; different ages of population size will have different impacts on digital technology innovation, the population size of 20-44 years old will have a promotional effect on technological innovation, and the population size of more than 45 years old will inhibit technological innovation. Heterogeneity analysis shows that there are significant differences in the impact of population size and market size on digital technology innovation in countries with different levels of economic development, and the size of the young population aged 20-44 has a facilitating effect on digital technology innovation in low-income countries, and the market size has a facilitating effect on digital technology innovation in high-income countries. Therefore, population size and market size are the key carriers of digital technology breeding, low-income countries need to increase the advantage of market size, and high-income countries should increase the fertility rate while maintaining the market size, so as to promote the continuous innovation and development of digital technology.