The Effects of Technological Innovations on Employment: Evidence From Manufacturing Sector of Pakistan

The objective of this research paper is to study the effects of technological innovations on employment. Time series data for the period of (1990- 2009) was collected from World Development Indicators, IMF, Pakistan Economic Survey and State Bank of Pakistan databases. Technological innovation, Exports, Gross Domestic Product, and total Investment were taken as independent variable while Employment was taken as dependent variable. We used statistical techniques such as Co-Integration Test, Auto Regressive Distributed Lag Model, Bound Test, Error Correction Model (ECM), and Unit Root Test to test stationarity and determine short run and long run relationship between variables.Our findings show that technological innovations have significant impact on manufacturing sector growth and as such Government should focus on introduction of latest technology in this sector to improve its productivity and increase employment.